Mahindra & Mahindra Ltd (M&M) Q2 FY27 Results Analysis: PAT Jumps 25%, EBITDA Margin Compresses 397 bps

Cofacto Research Published November 05, 2026 5 min read

Positive

Mahindra & Mahindra Ltd's Q2 FY27 numbers came in strong, with revenue of Rs. 57,514.98 Cr (+25.34% YoY) and PAT growth of +24.90% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quick Details

Results date	November 05, 2026
Revenue (Q2)	Rs. 57,514.98 Cr (+25.34% YoY)
PAT (Q2)	Rs. 4,587.88 Cr (+24.90% YoY)
EBITDA margin	18.59% (-189 bps YoY)
EPS (Q2)	Rs. 41.04 (+24.74% YoY)

Quarter Snapshot

Revenue grew 25.34% YoY with owners' PAT up 24.90%, led by Automotive (+38.96%) and Financial Services (result +58.51%), while the mid-to-high-teens SUV growth guidance remains on track. The key offsets are a ~397 bps YoY materials-cost deterioration compressing EBITDA margin to 18.59%, a farm segment in decline (revenue −6.39%, September tractors −23%) that puts the ~5% tractor guidance at risk, and negative H1 operating cash flow of Rs.(673.12) Cr driven by the financial-services receivables build. Sequential margin recovery in auto (7.71% to 8.82%) supports management's claim that margins have passed their low point, with the October festive season and H2 tractor volumes the next catalysts.

Q2 FY27 Expectations vs Results

Driver	What happened	Verdict
"Auto revenue ahead on wholesales"	Consol auto revenue +38.96% YoY; standalone +36.13%	Played out
"Auto PBIT margin flat at best; a repeat of Q1 compression cannot be ruled out"	Consol auto margin 8.82%: +110 bps QoQ (better than feared) but below 9.50% YoY; standalone 7.70% vs 9.15%	Partially
"Farm volumes behind, festive catch-up deferred into Q3"	Farm consol revenue −6.39% YoY; Sep tractors −23%	Played out
"Tractor ~5% guide likely to be formalized lower"	Guide is a call matter; filing silent; data supports moderation	Partially / open for the call
"Dealer inventory build; wholesale ahead of retail"	Sep production 121,722 vs sales 113,705; inventories Rs.24,125.26 Cr vs Rs.22,044.11 Cr at Mar-26	Played out
"Steel/rubber worsened, aluminium eased"	Net materials ratio up ~397 bps YoY; margins still below year-ago	Played out
"CAFE-3 clarity delivered in-window (notified Sep 30, 2026)"	Not addressed in the filing (ELV Rules note only) — per pre-call note (web-sourced, dated	Not observable in filing

Read our full results preview.

Management Guidance vs Delivery

What management said	What happened	Verdict
SUV growth (M&M, not industry) mid-to-high teens, FY27	Jul–Sep UV wholesales +20%/+50%/+14%; consol auto revenue +38.96% YoY	On Track
Tractor industry ~5% (mid-single digit), FY27	Farm consol revenue −6.39% YoY; Sep domestic tractors −23% — H2-weighted; at risk	Too Early
Total auto capacity 82k/month by F27 H2 exit	Not directly disclosed in the filing; Sep production 121,722 units	Too Early
Capex Rs.20,000–25,000 Cr (auto & farm, FY27–28)	H1 payments for PPE & intangibles Rs.7,364.70 Cr (consol)	On Track
"Margins will improve from the current low point" (Q1 FY27 call)	Consol auto margin 8.82% vs 7.71% QoQ; standalone auto 7.70% vs 7.13%; farm 14.37% vs 14.26% — sequential improvement, but still below year-ago — sequential direction only	Confirmed
"The festive season is going to be a big one for us" (Q1 FY27 call)	Sep tractors −23% on festive shift to October; farm revenue −6.39% YoY — Q3 will evidence	Too Early
SUV mid-to-high-teens growth guidance durability (Q4 FY26 call)	Three consecutive months of UV wholesale growth; auto revenue +38.96% YoY	Confirmed to date
Growth Gems "still underappreciated" (prior calls)	Consol IBCS result Rs.349.18 Cr, weak QoQ (Q1 carried one-offs per prior notes)	Too Early

Key Numbers, Quarter by Quarter

Metric	Jul 2026	Aug 2026	Sep 2026
Total vehicles	1,03,860	1,07,648	1,14,874
YoY %	+26	+42	+15
SUV/UV	60,048	59,257	64,092
YoY %	+20	+50	+14
Tractors	34,420	29,507	50,208
YoY %	+20	+5	−23

Key Investment Insights

Key Positives

Consolidated revenue grew 25.34% YoY to Rs.57,514.98 Cr; Automotive segment revenue +38.96% YoY to Rs.37,756.35 Cr
Owners' PAT grew 24.90% YoY to Rs.4,587.88 Cr; H1 owners' PAT +29.47% YoY
UV wholesales grew +20%/+50%/+14% in Jul/Aug/Sep, keeping the mid-to-high-teens SUV growth guidance on track
Consolidated auto segment margin improved sequentially to 8.82% from 7.71% in Q1; standalone auto margin 7.70% vs 7.13%
Financial Services segment result grew 58.51% YoY; MMFSL PAT Rs.881.52 Cr (+55%), disbursements +22%, AUM +15%, GS3 3.42%
Effective tax rate normalized to 29.84% from 34.57% a year ago; earnings are tax-paid with cash-tax rate at 28.73%
Ex-FS debt-equity improved to 0.03x from 0.05x YoY; inventory turnover improved to 6.55x from 4.83x; cash of Rs.8,165.74 Cr plus Rs.29,233.95 Cr current investments
H1 capex of Rs.7,364.70 Cr keeps the Rs.20,000–25,000 Cr FY27–28 capex program on a comfortable run-rate

Risk Factors

Net materials ratio deteriorated ~397 bps YoY to 60.79% of revenue and worsened sequentially from 59.02%, compressing EBITDA margin to 18.59% from 20.48%
Farm Equipment revenue declined 6.39% YoY with September tractors down 23%, putting the ~5% tractor industry guidance at risk pending October festive catch-up
H1 operating cash flow was negative at Rs.(673.12) Cr vs PAT of Rs.11,164.33 Cr, driven by a Rs.13,482.32 Cr financial-services receivables build
Standalone auto margin fell to 7.70% from 9.15% a year ago and standalone farm margin to 16.76% from 19.71%
QoQ owners' PAT fell 15.89% on tax-rate normalization (21.38% to 29.84%) and a tougher Q1 base
ELV Rules 2025 EPR obligations effective April 1, 2025 cannot yet be reliably estimated by the Group — an open, unquantified regulatory item