Mahindra May Split Tractors, SUVs And Trucks As Group Reportedly Mulls Major Business Overhaul

Mahindra Group is examining the possibility of splitting its core business verticals, which include tractors, passenger vehicles (PVs) and trucks, into separate companies, The Economic Times reported.

The conglomerate has reportedly initiated preliminary assessments to evaluate the feasibility and implications of such a restructuring. At present, these segments function under Mahindra & Mahindra (M&M), the flagship company of the group.

People familiar with the matter told ET that the group’s strategy has gradually evolved, with more emphasis on the automotive division, which is a deliberate move to reduce exposure to agriculture-linked fluctuations. The logic is to have a well-diversified portfolio.

While the farm equipment segment continues to rely heavily on monsoon patterns, rural demand and government support, the passenger vehicle and commercial segments are viewed as offering steadier growth prospects. A senior executive said that the broader goal is to be future-ready and make all businesses independent.

Industry analysts quoted by the report said that the differing performance levels among Mahindra’s divisions have reinforced the case for a separation. The automotive arm, they estimate, contributes nearly two-thirds of M&M’s current market valuation of over Rs 3,400 per share. A potential demerger, they added, could lead to sharper capital deployment, enable each business to pursue tailored strategies, and potentially result in higher market valuations.

Should the proposal advance, Mahindra’s tractor unit could emerge as a distinct entity. The division commanded a 43.3% market share in FY25, up from 38.2% in FY21.

The passenger vehicle division, anchored by brands such as Scorpio, Thar and the XUV range, as well as the upcoming Born Electric platform, could also be hived off. The relatively smaller truck and commercial vehicle business may become a focused standalone vertical.

There is also speculation that SML Isuzu, recently acquired by Mahindra, could serve as the cornerstone for its commercial vehicle operations.