Mahindra Group is reportedly evaluating a major restructuring plan that could see its core verticals—tractors, passenger vehicles (PVs), and commercial trucks—function as standalone entities. If implemented, this would mark one of the most significant corporate transformations in the group’s history, aimed at unlocking shareholder value, sharpening strategic focus, and preparing for future growth across diverse sectors.
Strategic Rationale Behind the Proposed Split
According to internal sources cited in recent reports, Mahindra & Mahindra (M&M) has initiated preliminary assessments to explore the feasibility of separating its fast-growing automotive, farm equipment, and truck divisions. The move is inspired by the performance divergence among these segments and the need for tailored capital allocation and independent growth strategies.
A senior executive stated, “The broader goal is to be future-ready and make all businesses independent. This will unlock business potential and ramp up scale.”
Mahindra’s Segment-Wise Revenue Contribution (FY21 vs FY25)
| Segment | FY21 Revenue Share | FY25 Revenue Share | Growth Driver |
|---|---|---|---|
| SUVs & Passenger Cars | 35% | 57% | Surge in Scorpio, Thar, XUV sales |
| Tractors | 33% | 22% | Monsoon-linked demand |
| Trucks & CVs | 12% | 14% | SML Isuzu integration |
| Others | 20% | 7% | Diversified holdings |
SUV Division: Mahindra’s Star Performer
The SUV segment has emerged as Mahindra’s crown jewel, with sales surging from 190,000 units in FY21 to over 550,000 units in FY25. Flagship models like the Scorpio, Thar, and XUV700 have captured significant market share, while the Born Electric platform is poised to lead Mahindra’s EV ambitions.
Analysts estimate that the automotive division alone contributes nearly two-thirds of M&M’s current market valuation of ₹3,400 per share. A demerger could allow this unit to pursue aggressive EV expansion, global partnerships, and premium branding.
Tractor Division: Market Leader with Rural Sensitivity
Mahindra’s tractor business, which has held market leadership since acquiring Punjab Tractors in 2007, remains a vital pillar. It commanded a 43.3% market share in FY25, up from 38.2% in FY21. However, its performance is closely tied to monsoon cycles, rural demand, and government subsidies.
A standalone tractor entity could focus on precision farming, agri-tech integration, and export expansion, while reducing exposure to urban volatility.
Truck and CV Division: Emerging Focus Area
Though relatively smaller, Mahindra’s truck and commercial vehicle segment is gaining traction. The recent acquisition of SML Isuzu is expected to serve as the nucleus for this vertical. A separate entity could streamline operations, target logistics and fleet markets, and compete more effectively with Tata Motors and Ashok Leyland.
Mahindra Group’s Consolidated Financials (FY21 vs FY25)
| Metric | FY21 | FY25 | CAGR (%) |
|---|---|---|---|
| Revenue from Operations | ₹72,679 crore | ₹1,55,645 crore | 16.5% |
| Net Profit | ₹1,812 crore | ₹12,929 crore | 48.3% |
| EBITDA Margin | 11.2% | 15.6% | — |
| ROCE | 8.5% | 14.3% | — |
Industry Context: Tata Motors’ Demerger as Precedent
Mahindra’s move mirrors Tata Motors’ recent demerger, which split its commercial and passenger vehicle businesses into separate listed entities. Analysts believe Mahindra’s restructuring could similarly unlock value, with the “sum of parts” potentially exceeding the combined valuation.
Potential Benefits of Mahindra’s Demerger Strategy
- Sharpened Capital Allocation: Each unit can pursue tailored investment strategies.
- Focused Leadership: Dedicated management teams for each vertical.
- Investor Clarity: Transparent performance metrics and valuation benchmarks.
- Strategic Partnerships: Easier to attract segment-specific investors and collaborators.
- Operational Agility: Faster decision-making and market responsiveness.
Disclaimer: This news content is based on verified reports, corporate disclosures, and financial data as of October 9, 2025. It is intended for editorial use and public awareness. The information does not constitute investment advice or corporate endorsement and adheres to ethical journalism standards.
