At the recent Analyst Meet, Executive Director & CEO (Auto and Farm Sector) Rajesh Jejurikar highlighted a 4% rise in Mahindra’s tractor sales in Q2FY25, with exports up by 27%.
Despite global challenges, including market declines in North America and high inflation in Turkey, Mahindra maintained a strong domestic market share, reaching 43.7% by October. The company’s farm segment saw a margin of 18.7% in Q2FY25, a positive outcome in a typically low-volume period, supported by a renewed rural demand. Mahindra has updated its tractor growth outlook to 6-7% for the year, with anticipated growth in H2FY25 estimated at 13-15%.
Continued Gains In SUVs, LCVs In Auto Segment
Mahindra’s auto business recorded a 36% growth in PBIT and a 15% rise in revenue, driven by strong SUV sales. In the light commercial vehicle (LCV) segment, the company saw a positive industry shift, particularly in October, linked to increased demand tied to agricultural activity and an uptick in market arrivals.
According to him, the recent launch of the Veero in the commercial vehicle space has received favorable feedback, marking Mahindra’s push into more “car-like” commercial vehicles with enhanced features, including infotainment systems, aimed at elevating customer expectations in the segment.
Advancements In Electrification, Last Mile Mobility
Jejurikar said that the company continues to lead in the rapidly electrifying last-mile mobility sector. It retained its top market share position in the electric three-wheeler segment, which saw 20% electrification last quarter. The recent introduction of the Zeo electric four-wheeler further strengthens Mahindra’s foothold in sustainable mobility, he noted.
Comment From CFO
Highlighting the Group’s cohesive financial performance in Q2FY25, Group CFO Amarjyoti Barua underscored its strategic focus on diversified profit contributions, with the Auto division achieving a 15% revenue growth, complemented by a strong 12% growth in the Services segment.
Margin Pressure Likely In Q3
Looking forward, Barua outlined expectations for sustained growth across Auto, Farm, and Services in the second half of FY25. While Auto is expected to maintain mid to high-teen volume growth, launch expenses in Q3 may cause some temporary margin pressure. Farm segment growth is anticipated to pick up, especially from domestic demand, with careful monitoring of international performance. Mahindra Finance is set to benefit from reduced credit costs, while Tech Mahindra is projected to continue its upward trajectory, he noted.
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