SML Mahindra Q1 FY26 Results (NSE: SMLMAH)
Signal: Margin pressure
The read
Q1 revenue grew 13% YoY on higher passenger vehicle sales, but gross margin compression from elevated raw material costs and higher employee costs led to a 5% decline in net profit; finance cost reduction provided a partial offset.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹957.54 Cr | 13.2% | 6.7% |
| EBIT | ₹101.29 Cr | -5.4% | |
| Net profit | ₹63.62 Cr | -5.0% | |
| EPS | ₹43.96 | -5.0% | |
| EBIT margin | 10.58% |
P&L walk
Revenue growth driven by passenger vehicles but margins hit by higher raw material costs; finance cost decline partly offsets.
Key positives
- Revenue growth of 13.2% YoY driven by passenger vehicle segment (up 13% in June sales)
- Finance cost reduced 46% YoY, improving interest coverage
- EPS of ₹43.96 remains healthy despite profit decline
Key concerns
- Gross margin compressed 170bps YoY as raw material cost rose to 77.7% of revenue from 76.0%
- EBITDA margin fell 208bps to 10.58% despite revenue growth, indicating cost pressures
- Net profit declined 5% YoY due to margin erosion
- Regulatory uncertainty from End-of-Life Vehicles (ELV) rules could impose future obligations
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