Mahindra & Mahindra’s March quarter (Q4FY26) shows why it’s one of the most consistent growth stories in India’s auto sector. It beat Street expectations on revenue and profit. Better-than-expected realizations in SUVs – its primary segment, and a sharp rise in other income were the key drivers. The stock has gained over 4% since the earnings announcement on Tuesday.

Standalone revenue rose 26% year-on-year to ₹39,550 crore, aided by continued industry-beating growth in SUVs with the segment now contributing nearly 80% of revenues. Successful launches, such as the XEV 9e and BE 6, added to the sustained demand for Scorpio, Thar Roxx, Bolero, and XUV 3XO, leading to over 660,000 SUVs sold during FY26.

M&M is India’s second-largest passenger vehicle manufacturer by volume and the market leader by value, with a 25.3% share of the industry’s revenue.

M&M’s auto Ebit margin excluding EVs stood at a healthy 10.9%, supported by price hikes undertaken amid commodity inflation. But the bigger surprise came from other income, which rose more than tenfold to ₹590 crore due to ₹500 crore of PLI accruals linked to EV models. Thus, net profit jumped 53% to ₹3,740 crore.

The EV business, historically a margin drag, is now showing early signs of operating leverage. “We rank number one in revenue market share in electric SUV and have a penetration of 9.6% in M&M portfolio, much higher than the industry average,” said Rajesh Jejurikar, ED and CEO (auto and farm sector). The EV business Ebit margin of 5.1% in Q4FY26 is a notable improvement for a segment still in investment mode. The management expects EV penetration to rise to 13-21% over the next five years.

For farm equipment, the signals are mixed. Domestic market share improved to 44% for the full year, but a slowdown to mid-single-digit growth is expected on the high base of FY26 amid the prediction of weak monsoons in FY27.

While international farm operations continue to face headwinds across the US, Brazil, and Turkey, M&M has accelerated rationalization efforts through exits in Finland, Japan, and Turkey, potentially clearing the path for better profitability over the medium term.

Still, capacity expansion plans, a deep SUV pipeline, and improving EV economics continue to support management’s confidence in delivering a 15-20% earnings-per-share CAGR over the next five years, despite ongoing macro uncertainty. But at 22x FY27 consensus earnings, the stock is no longer cheap.

Mahindra & Mahindra’s March quarter (Q4FY26) shows why it’s one of the most consistent growth stories in India’s auto sector. It beat Street expectations on revenue and profit. Better-than-expected realizations in SUVs – its primary segment, and a sharp rise in other income were the key drivers. The stock has gained over 4% since the earnings announcement on Tuesday.

Standalone revenue rose 26% year-on-year to ₹39,550 crore, aided by continued industry-beating growth in SUVs with the segment now contributing nearly 80% of revenues. Successful launches, such as the XEV 9e and BE 6, added to the sustained demand for Scorpio, Thar Roxx, Bolero, and XUV 3XO, leading to over 660,000 SUVs sold during FY26.

M&M is India’s second-largest passenger vehicle manufacturer by volume and the market leader by value, with a 25.3% share of the industry’s revenue.

M&M’s auto Ebit margin excluding EVs stood at a healthy 10.9%, supported by price hikes undertaken amid commodity inflation. But the bigger surprise came from other income, which rose more than tenfold to ₹590 crore due to ₹500 crore of PLI accruals linked to EV models. Thus, net profit jumped 53% to ₹3,740 crore.

The EV business, historically a margin drag, is now showing early signs of operating leverage. “We rank number one in revenue market share in electric SUV and have a penetration of 9.6% in M&M portfolio, much higher than the industry average,” said Rajesh Jejurikar, ED and CEO (auto and farm sector). The EV business Ebit margin of 5.1% in Q4FY26 is a notable improvement for a segment still in investment mode. The management expects EV penetration to rise to 13-21% over the next five years.

For farm equipment, the signals are mixed. Domestic market share improved to 44% for the full year, but a slowdown to mid-single-digit growth is expected on the high base of FY26 amid the prediction of weak monsoons in FY27.

While international farm operations continue to face headwinds across the US, Brazil, and Turkey, M&M has accelerated rationalization efforts through exits in Finland, Japan, and Turkey, potentially clearing the path for better profitability over the medium term.

Still, capacity expansion plans, a deep SUV pipeline, and improving EV economics continue to support management’s confidence in delivering a 15-20% earnings-per-share CAGR over the next five years, despite ongoing macro uncertainty. But at 22x FY27 consensus earnings, the stock is no longer cheap.