Mahindra Weighs Restructuring to Form Independent Units

10 Oct 2025 CW Team

The discussions, still at a preliminary stage, aim to assess the feasibility of transforming Mahindra & Mahindra’s (M&M) core businesses into standalone divisions. Both the automotive and farm equipment segments have recorded strong growth over the past five years, cementing Mahindra’s leadership in SUVs and tractors.

“The focus is to be future-ready and make all businesses independent. That helps unlock business potential and enables scale,” a senior executive close to the development told the publication. M&M declined to comment on the report.

Analysts estimate that the automotive division accounts for nearly two-thirds of M&M’s current market capitalisation, which stands at over Rs 3.4 trillion. A potential demerger could, they said, improve capital allocation efficiency and enhance market valuation.

Between FY21 and FY25, M&M’s automotive segment share of total revenue rose from 35 per cent to 57 per cent, while its EBIT contribution climbed from 13 per cent to 42 per cent. Meanwhile, the farm equipment division’s share of revenue fell from 33 per cent to 22 per cent, and its EBIT contribution declined from 74 per cent to 27 per cent.

Over the same period, SUV sales more than doubled to 550,000 units, while tractor sales rose to 424,000 units, reflecting Mahindra’s dominance across mobility and agriculture.

The move follows Tata Motors’ recent separation of its passenger and commercial vehicle units, a restructuring viewed positively by markets. Analysts see Mahindra’s potential reorganisation as a value-creation initiative aimed at improving investor visibility, strategic flexibility, and capital discipline.

If implemented, the restructuring could allow Mahindra to unlock the full potential of its diverse operations and better position itself in India’s fast-evolving automotive and agri-equipment sectors.

The Mahindra Group is evaluating a major restructuring plan that could see its tractor, passenger vehicle (including EVs), and truck operations spun off into independent entities, according to a report by The Economic Times. The discussions, still at a preliminary stage, aim to assess the feasibility of transforming Mahindra & Mahindra’s (M&M) core businesses into standalone divisions. Both the automotive and farm equipment segments have recorded strong growth over the past five years, cementing Mahindra’s leadership in SUVs and tractors. “The focus is to be future-ready and make all businesses independent. That helps unlock business potential and enables scale,” a senior executive close to the development told the publication. M&M declined to comment on the report. Analysts estimate that the automotive division accounts for nearly two-thirds of M&M’s current market capitalisation, which stands at over Rs 3.4 trillion. A potential demerger could, they said, improve capital allocation efficiency and enhance market valuation. Between FY21 and FY25, M&M’s automotive segment share of total revenue rose from 35 per cent to 57 per cent, while its EBIT contribution climbed from 13 per cent to 42 per cent. Meanwhile, the farm equipment division’s share of revenue fell from 33 per cent to 22 per cent, and its EBIT contribution declined from 74 per cent to 27 per cent. Over the same period, SUV sales more than doubled to 550,000 units, while tractor sales rose to 424,000 units, reflecting Mahindra’s dominance across mobility and agriculture. The move follows Tata Motors’ recent separation of its passenger and commercial vehicle units, a restructuring viewed positively by markets. Analysts see Mahindra’s potential reorganisation as a value-creation initiative aimed at improving investor visibility, strategic flexibility, and capital discipline. If implemented, the restructuring could allow Mahindra to unlock the full potential of its diverse operations and better position itself in India’s fast-evolving automotive and agri-equipment sectors.

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