The shares of the prominent automobile manufacturer gained up to 3 percent after the company entered into a share purchase agreement to acquire a 59 percent stake in SML Isuzu.
Price Movement
With a market capitalization of Rs 3.60 lakh crore, the shares of Mahindra & Mahindra Ltd were trading at Rs 2,901.80 per share, increasing around 1.37 percent as compared to the previous closing price of Rs 2,862.20 apiece.
Reason for Rise
The shares of Mahindra & Mahindra Ltd have seen bullish movement after signing agreements to acquire 63,62,306 shares (43.96 percent) of SML Isuzu from Sumitomo Corporation and 21,70,747 shares (15 percent) from Isuzu Motors at Rs 650 per share. The total deal, worth approximately Rs 554.64 crore, is subject to statutory and regulatory approvals, significantly increasing the company’s stake in SML.
The acquisition aims to strengthen M&M’s position in the >3.5T commercial vehicle segment, where it currently holds a 3 percent market share. This move is expected to double its share to 6 percent, with targets of reaching 10–12 percent by FY31 and over 20 percent by FY36, building on recent growth momentum.
Additionally, the company will make an open offer to acquire up to 37,62,628 equity shares (26 percent stake) of SML from eligible public shareholders at Rs 1,554.60 per share. This move, under SEBI’s Takeover Regulations, is subject to necessary statutory and regulatory approvals, further strengthening the company’s control over SML.
Moreover, SML holds a leading 16 percent market share in the ILCV Buses segment and offers strong potential to unlock value through synergies in cost, network, brand, manufacturing, talent, and products. Combining SML’s strengths with our expertise in technology, design, innovation, and sourcing will create a powerful, competitive partnership.
Management Comments
Dr. Anish Shah, Group CEO & MD of the Mahindra Group, said, “The acquisition of SML Isuzu marks a significant milestone in Mahindra Group’s vision of delivering 5x growth in our emerging businesses. This acquisition is aligned with our capital allocation strategy for investing in high-potential growth areas, which have a strong right to win and have demonstrated operational excellence.”
Financial Growth
Looking forward to the company’s financial performance, revenue magnified by 17 percent from Rs 35,299 crore in Q3FY24 to Rs 41,470 crore in Q3FY25, Further, during the same time frame, net profit jumped by 22 percent from Rs 2,977 crore to Rs 3,624 crore.
Market Leadership
Mahindra strengthened its market leadership with a 23 percent SUV and 51.9 percent LCV (<3.5T) market share in Auto, and 44.2 percent in the Farm segment in Q3 FY25. Auto PAT grew 20 percent to Rs 1,438 crore, Farm PAT rose 11 percent to Rs 996 crore. Margins improved with strong execution and operating leverage despite international challenges.
Company Profile
Mahindra & Mahindra Ltd is one of India’s most diversified automobile companies, with a presence across 2-wheelers, 3-wheelers, passenger and commercial vehicles, tractors, and earthmovers. Through its subsidiaries and group companies, it also operates in financial services, auto components, hospitality, infrastructure, IT, defence, energy, and more.
Written by Abhishek Singh
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