Mahindra Group denies demerger report, says no plan to split auto and tractor businesses

Mahindra Group said on Thursday that it has no plans to split the company’s automobile and tractor businesses after news emerged fueling speculation.

Amid reports suggesting a significant restructuring, the company has decided to disclose to the stock exchanges that there are no plans to split its automobile and tractor businesses, the automobile giant said in its Bombay Stock Exchange (BSE) filing.

Mahindra Group maintained its long-standing position. “The company has made this clear in the past and argues that it sees much more value from the synergies by keeping these businesses within M&M (Mahindra and Mahindra).”

Background of speculations

The official announcement comes after several reports earlier claimed that Mahindra Group is planning to split its core businesses – tractors, passenger vehicles (including EVs) and trucks – into standalone entities.

Mahindra Group concluded its statement by confirming its commitment to regulatory requirements and added that “the Company has complied and continues to comply with relevant disclosure norms under the Listing Regulations.”

Mahindra’s performance

Mahindra Group’s automotive and farm equipment flagship M&M reports standalone net profit ₹3,450 crore in the quarter ended June, which is a 32% increase compared to the same month in the previous year. ₹2,612 crore was reported in the same period last year.

Consolidated revenue was generated from operations ₹34,143 crore in the quarter ended June ₹27,133 crore in the previous year quarter, reflecting a year-on-year growth of 26%.

M&M shares are traded at the following times: ₹3,442.10 per capita at 3:14 pm on BSE, up nearly 0.5 percent from the previous day’s close. The company’s shares fell more than 7 percent in the last month, but gained more than 7 percent in the last year. The P/E ratio currently stands above 28.10.