Mahindra Group denies demerger report, says no plan to split auto and tractor businesses

Mahindra Group on Thursday clarified that there are no plans for a demerger of the company's auto and tractor businesses after news reports surfaced, which fuelled these speculations.

Amid reports suggesting a significant restructuring, the company has decided to clarify to the stock exchanges that there is no plan for a demerger of the auto and tractor businesses, the auto giant stated in a Bombay Stock Exchange (BSE) filing.

Mahindra Group maintained its long-standing position. “The Company has clarified this in the past and maintains that it sees much greater value from synergies by keeping these businesses within the M&M (Mahindra and Mahindra) entity.”

Background of the speculations

The official clarification comes after several news reports had previously claimed that Mahindra Group was planning to separate its core businesses — tractors, passenger vehicles (including EVs), and trucks — into independent entities.

Mahindra Group concluded its statement by affirming its commitment to regulatory requirements, adding that “the Company has complied with and continues to comply with the relevant disclosure norms under the Listing Regulations.”

Mahindra's performance

M&M, the automotive and farm equipment flagship of Mahindra Group, reported a standalone net profit of ₹3,450 crore in the quarter ended June, which is a 32% jump compared to ₹2,612 crore reported in the same period last year.

The consolidated revenue from operations came in at ₹34,143 crore in the quarter ended June, compared to ₹27,133 crore in the year-ago quarter, reflecting a 26% YoY growth.

M&M shares were trading at ₹3,442.10 apiece on BSE at 3:14 PM, around 0.5 per cent up from its previous day closing. The shares of the company have fallen more than 7% in the past one month, but gained over 7% in the past one year. Its P/E ratio currently stands at over 28.10.