Mahindra Group on Thursday clarified that there is no plan for a demerger of the company's auto and tractor businesses after reports in media suggested otherwise.
In view of the speculations, the Company on its own considers it necessary to clarify to the Stock Exchanges that there is no plan for a demerger of the Auto and Tractor businesses, said the auto major. "The Company has clarified this in the past and maintains that it sees much greater value from synergies by keeping these businesses within the M&M entity."
Earlier today, there were multiple reports that said that Mahindra Group is evaluating the separation of its core businesses — tractors, passenger vehicles (including EVs), and trucks — into independent entities, in what could mark the conglomerate’s most significant restructuring in years.
"These are early internal discussions, with initial reviews having begun to assess the feasibility of such a move and what it will entail. Currently, these businesses operate as divisions under the group’s flagship, Mahindra & Mahindra (M&M). Over the past five years, both the automotive and farm equipment sector (FES) divisions have delivered strong growth," the reports had said earlier.
Mahindra & Mahindra was Company of the Year at The Economic Times Awards for Corporate Excellence last year.
Between FY21 and FY25, the automotive segment’s share of M&M’s revenue rose from 35% to 57%, while its EBIT contribution jumped from 13% to 42%, according to ETIG data. The FES division, by contrast, saw its revenue share drop from 33% to 22% and its EBIT contribution fall from 74% to 27%.
SUV sales more than doubled to 550,000 units in FY25 from 190,000 in FY21, while overall auto volumes climbed to 941,000 units. Tractor sales, though slower, still grew from 354,000 to 424,000 units during the same period.
This isn’t the first time demerger reports have emerged in Mahindra. Earlier also discussions were shelved due to concerns over the loss of shared synergies in sourcing, supply chain, and R&D, as well as fears that a smaller, standalone tractor company might become vulnerable to a takeover.
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In view of the speculations, the Company on its own considers it necessary to clarify to the Stock Exchanges that there is no plan for a demerger of the Auto and Tractor businesses, said the auto major. "The Company has clarified this in the past and maintains that it sees much greater value from synergies by keeping these businesses within the M&M entity."
Earlier today, there were multiple reports that said that Mahindra Group is evaluating the separation of its core businesses — tractors, passenger vehicles (including EVs), and trucks — into independent entities, in what could mark the conglomerate’s most significant restructuring in years.
"These are early internal discussions, with initial reviews having begun to assess the feasibility of such a move and what it will entail. Currently, these businesses operate as divisions under the group’s flagship, Mahindra & Mahindra (M&M). Over the past five years, both the automotive and farm equipment sector (FES) divisions have delivered strong growth," the reports had said earlier.
Mahindra & Mahindra was Company of the Year at The Economic Times Awards for Corporate Excellence last year.
Between FY21 and FY25, the automotive segment’s share of M&M’s revenue rose from 35% to 57%, while its EBIT contribution jumped from 13% to 42%, according to ETIG data. The FES division, by contrast, saw its revenue share drop from 33% to 22% and its EBIT contribution fall from 74% to 27%.
SUV sales more than doubled to 550,000 units in FY25 from 190,000 in FY21, while overall auto volumes climbed to 941,000 units. Tractor sales, though slower, still grew from 354,000 to 424,000 units during the same period.
This isn’t the first time demerger reports have emerged in Mahindra. Earlier also discussions were shelved due to concerns over the loss of shared synergies in sourcing, supply chain, and R&D, as well as fears that a smaller, standalone tractor company might become vulnerable to a takeover.
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