The Mumbai-based conglomerate has guided for a 15-40% organic revenue growth annually across its businesses between FY26 and FY30. Mahindra reported consolidated revenues from operation of ₹1.59 trillion in FY25, 15% higher than the preceding year. Consolidated profit for the year rose at a similar pace to ₹12,929 crore.
While experts said that the targets were achievable, they warned that several risks remain, starting with the inherent complexity of delivering growth across diverse businesses that range from cars and tractors to software and real estate. The group also faces intense competition in key businesses such as sport utility vehicles (SUV) and electric vehicles (EV), information technology (IT) services, and real estate, they said.
Managing capital allocation for these businesses would also be a key challenge for the company’s leadership, considering the significant investments that businesses like making cars and building real estate require, experts said. Finally, the businesses remain exposed to macroeconomic volatility across the world – poor rainfall in India could dent demand for tractors and cars, while a slowdown in the US economy could hurt the IT services industry.
But what has excited analysts is the clear road map given by the conglomerate, which makes it simpler for investors to track progress across the five-year period.
“The investor day was notable for its specific, high-growth targets across all businesses, providing clear milestones for investors to track,” analysts at Antique Stock Broking Ltd said in a note on Friday.
Other brokerages to respond favourably to the five-year plan include Motilal Oswal, JM Financial, Yes Securities, and Nirmal Bang. Nuvama and Elara Capital maintained a buy rating on the company’s stock, but kept their price targets unchanged.
Shares of Mahindra & Mahindra Ltd closed 0.9% higher at ₹3,749 on the BSE on Friday, compared to a 0.47% fall in the benchmark Sensex. The stock has gained over 21% since the beginning of the year, compared to an 8.57% rise in the benchmark index.
The plan
Mahindra on Thursday clearly defined multi-fold revenue growth across its businesses by 2030. This makes it one of the few conglomerates that put a specific number to their mid-term growth targets across individual businesses. Another notable example is Larsen & Toubro, which is at the fag-end of its five-year plan, and will be unveiling its new five-year plan in early FY27.
Mahindra’s plan hinges on its core businesses of automobiles and farm equipment, which draw strength from market leadership in their respective segments. The company makes more money selling SUVs in India than any other company, even if its volumes are lower than some peers, due to the premium price tags on its models like XUV700 and XEV 9E. Its two tractor brands – Mahindra and Swaraj – account for more than half the tractors sold in the country, and make it the largest tractor maker globally.
Future growth in these segments partly depends on exports.
The sectors are also cyclical, posing execution risk to the target to grow automotive revenue eight-fold and tripling farm revenue by FY30 over the base of FY20. A dip in the Indian economy or poor monsoons could impact the company’s ability to deliver on these targets, the analysts said.
Mahindra’s smaller businesses, which it calls growth gems, are also poised to grow rapidly after years of nurturing, the company said. These include Last Mile Mobility, Trucks and Buses, Lifespaces, Susten, Club Mahindra, Aerospace, Accelo, Logistics and Classic Legends.
“Some of MM’s growth gems are on a strong growth trajectory,” noted analysts at Motilal Oswal on Friday. The high-growth businesses include last mile mobility, truck and bus business, aerostructures, Mahindra Holidays and Mahindra Lifespaces, they said.
“Depending on the progress of these growth gems, MM would look to unlock value in some of these segments in a couple of years,” they wrote.
The next five years form the last leg of the conglomerate’s turnaround strategy that started under the leadership of group chief executive and managing director Anish Shah, who took the reins in April 2021. The plan started with Mahindra exiting all of its non-performing businesses, like SsangYong in South Korea and an aerospace company in Australia. Simultaneously, the company stabilized its core business, including making sport utility vehicles, rural lending through Mahindra Finance, and selling IT services through Tech Mahindra.
With all the ingredients in place, the group is now guiding for rapid growth over the coming five years.
“The Mahindra Group has laid out a compelling growth narrative, and, if executed even moderately well, positions it for a fundamental re-rating,” the Antique analysts said.
A combination of the company’s core strength in SUVs and tractors and the emerging scale of its growth gems businesses make it a strong proxy for India’s economic growth, the analysts said.
The conglomerate has presence across most sectors with significant contribution to the Indian gross domestic product – consumer, lifestyle, e-commerce, agriculture, capital goods, financial services, logistics, mobility, renewable energy and IT services, as per an investor presentation. The only key industries missing from Mahindra’s portfolio include healthcare, infrastructure, and telecommunications.
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