New Delhi: A surge in tractor sales boosted the July-September earnings for Mahindra and Mahindra Ltd (M&M), which saw a slowdown in demand for its sports utility vehicles (SUVs) as consumers delayed purchases in anticipation of goods and services tax (GST) cuts.

Mahindra's consolidated net profit rose 13% to ₹3,955 crore, while revenue increased 22% to ₹46,106 crore in the three months through September. The revenue growth was led by a 32% surge in sales of tractors to 123,000 units during the period, while SUV sales rose 13% to 261,703 units.

Encouraged by robust sales, the company's management raised its tractor industry growth forecast amid rural momentum from good monsoons and GST cuts.

"Earlier, we were expecting single-digit growth in the industry. Now, we are expecting low double-digit growth in sales," Rajesh Jejurikar, executive director & chief executive officer (CEO) (auto and farm sector), Mahindra and Mahindra, said at a press conference on Tuesday.

"Overall, the economy is seeing a strong momentum. Our businesses are operating in segments constituting 70% of the country's GDP and all of them saw good growth during the quarter," Anish Shah, group CEO and managing director at Mahindra and Mahindra, said.

In the tractor industry, the company saw its market share climb to 44.1% in the first six months of the current financial year, from 43.3% at the end of FY25.

Mahindra joins other carmakers like Maruti Suzuki India Ltd and Hyundai Motor India in reporting high growth in their earnings. While Maruti saw a 7% year-on-year (y-o-y) growth in its profit for the July-September period to ₹3,293 crore, Hyundai reported a profit of ₹1,572 crore, 14% more than a year earlier, led by higher exports.

Mahindra's management highlighted that fewer launches in the current financial year has allowed the company to stabilize and boost earnings. Moreover, it expects the momentum in sales of both tractors and SUVs to sustain in the October-December quarter.

In October, Mahindra saw the highest-ever sales of SUVs at 71,624 units, as GST cuts that came into effect on 22 September are prompting consumers to upgrade vehicles.

"The cash flows from the harvest season due to good monsoon are coming into the market now. There are some auspicious days in November too which will drive sales," Jejurikar said.

The company said that its measures on rare earth magnets such as looking for technological substitutes and alternative supply chains have meant that its production will continue unhindered till the year-end. Till the end of October, Mahindra delivered more than 30,000 electric vehicles to its customers with EVs facing no challenges yet in production.

Jejurikar said that the company's supply chain teams have enured a steady supply of chips even as the crisis at Nexperia sent several global manufacturers into a tizzy. Chinese-owned Dutch company Nexperia has not been able to serve customers due to a dispute between China and the Netherlands due to latter's forced takeover of the company. While the Dutch unit makes the chips, they are sent to China for final preparation and assembly before being sent to customers. China has stopped such exports till it finds a solution to the ownership situation in Netherlands.

Analysts at Asit Mehta Investment Interrmediates said that the robust volumes of the company ensured revenue was in line with expectations, but noted that margins increased ensuring that profitability remained ahead of expectations.

"Ebitda margin expanded 21 bps y-o-y to 14.5%, aided by operating leverage and cost efficiencies. Net profit outperformance was due to increase in income from investments," analysts said in their post-results note.

Mahindra's management for the first time publicly called upon policymakers and industry to back electric vehicles.

In a first such public statement, Mahindra's leadership said that it believes that the right technology to back for the long term is EVs, which will help make India a manufacturing hub, calling hybrid vehicles "an interim solution".

The statement comes at a time when the country's premier automobile lobby Society of Indian Automobile Manufacturers (Siam) is discussing response to the latest draft of corporate average fuel efficiency III (CAFE III) norms, which has divided automakers.

Mahindra and Mahindra's shares settled nearly 1% higher at ₹3,581.55 apiece on the BSE on Tuesday.