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M&M reported stable Q1FY27

ICICIdirect Research 31 Jul 2026 DISCLAIMER

News: M&M reported stable Q1FY27. On standalone basis, top-line for the quarter came in at ₹41,920 crore (up ~23% YoY) with automotive segment volumes growing ~23% YoY at 3.04 lakh units and tractor sales volume at 1.58 lakh units (up ~18% YoY). EBITDA in Q1FY27 came in at ₹5,111 crore with corresponding EBITDA margins at 12.2% (down ~190 bps QoQ). Resultant PAT for Q1FY27 stood at ₹3,685 crore (up ~7% YoY), supported by higher other income. The growth outlook is underpinned by significant capacity expansion, with SUV production set to increase from the current ~64,500 units/month to 68,000 units by H1FY27, 92,000 units by the end of FY28 and nearly 1.32 lakh units/month by FY31, effectively doubling capacity over FY26-31.

View: M&M delivered a stable performance amidst geopolitical crises led rise in commodity prices and supply chain challenges. M&M leads the SUV segment with a revenue market share of 25% in Q1FY27 (up 50 bps YoY). M&M also retains its market leadership in tractor space with market share as of Q1FY27 at 44.9%. Automotive segment EBIT margins were down 240 bps QoQ at 7.1% which includes eSUV contract manufacturing margins (core Auto EBIT at 8.9%), while Farm Equipment segment margins were also down by 90 bps at 18.5% (core tractor margins at 19.2%). While commodity inflation remains a near-term headwind, the company has demonstrated resilience by largely offsetting a 400–450 bps commodity cost impact in Auto through pricing and cost optimization, with management expecting Auto margins to improve sequentially. EV penetration has already reached 12% of M&M's SUV portfolio, ahead of the industry's ~9%, while the company remains EBITDA positive in EVs even without PLI incentives, providing confidence in long-term profitability. We continue to be long term positive on the company. In a separate development M&M Electric 3-W subsidiary has raised a sum of ~₹ 322 crore from long term international investors at a valuation of ~₹ 11,000 crore which is also sentimentally positive for the stock. 

Impact: Positive

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