After Tata Motors, a Mahindra demerger?

Mumbai (9 October 2025): Mahindra & Mahindra Ltd. is evaluating a separation of its tractors, trucks and SUV businesses into independent entities, something on the lines of the Tata Motors demerger, The Economic Times reported on Thursday.

An M&M demerger, if it happens, can lead to significant value unlocking given how Mahindra’s tractor and automotive businesses have grown over the past five years. (Bloomberg)

These are early internal discussions, with initial reviews having begun to assess the feasibility of such a move and what it will entail, ET quoted its sources as saying.

M&M’s consolidated net profit rose from ₹1,812.49 crore in FY21 to ₹12,929.10 crore in FY25, on the back of revenue from operations that has more than doubled—from ₹72,679 crore in FY21 to ₹1,55,645 crore in FY25. And while the automotive and farm businesses had nearly equal contributions to the topline at 35% and 33%, respectively, in FY21, SUVs now account for 57% of M&M’s revenue as against 22% from tractors.

That’s because M&M has ridden, and driven, the SUV wave sweeping the world’s third largest car market by production volume.

M&M SUV sales have surged by nearly four times to 550,000 units in FY25 from 190,000 units in FY21. During the same time, tractor sales have increased 19.77% to 424,000 units.

The Tata Motors demerger can result in significant value unlocking for investors as the “sum of parts” could be higher than the combined. For every share of Tata Motors, shareholders will get one share in the new entity called TML Commercial Vehicles Ltd. The record date for the demerger is 14 October.