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Mahindra & Mahindra (M&M) has posted a robust financial performance for the first quarter of FY27, even as severe commodity price inflation put pressure on its core operating segments.
During the earnings press conference on Thursday, Group CEO & Managing Director Anish Shah told ANI that the company navigated an extraordinary 400 to 500 basis points of commodity inflation, resulting in a core margin compression of approximately 150 basis points across both the Auto and Farm tractor sectors. However, proactive internal cost-optimisation measures and strategic actions successfully cushioned the impact. Shah noted, "So, if we consider commodity prices, the PBIT compression in both cases--for Auto and Farm--is roughly around 150 basis points or so, while cost reduction was able to, and some of the actions that are taken, were able to partially offset them." During the briefing, Shah highlighted that M&M navigated through an extraordinary 400-500 basis points of commodity inflation. Despite this pressure, the group leveraged internal cost optimisation to partially cushion margins, while group performance accelerated across subsidiaries including Financial Services, Tech Mahindra, and Real Estate. M&M is also deploying 19 proprietary AI models across 15 transformation projects to improve efficiencies in product development, loan processing, and shop floor operations. Elaborating further on operational performance, Rajesh Jejurikar, Executive Director & CEO (Auto & Farm Sectors), stated that core tractor margins operated reliably within the expected 17-19 per cent band at 19.2 per cent. Consolidated farm revenue delivered a 14.2 per cent margin with a Profit After Tax (PAT) of Rs 1,781 crore, buoyed by accelerating mechanisation, strong Rabi cash flows, and monsoon recovery. On the auto front, core Auto PBIT margin stood at 8.9 per cent, with electric SUVs accounting for 12 per cent of total volumes. M&M is expanding SUV capacity to 68,000 per month by September 2026 and targeting a 2x total capacity scale-up. M&M's official earnings presentation, during the quarterly presser, stated that the group reported a strong quarterly financial performance, with consolidated Profit After Tax (PAT) surging 34 per cent year-on-year to Rs 5,455 crore for Q1 FY27, up from Rs 4,083 crore in Q1 FY26. Total consolidated revenue rose 28 per cent to Rs 58,188 crore, while Return on Equity (ROE) expanded to an annualised 23 per cent. (ANI)
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