SML Mahindra expects its operating margins to recover by the fourth quarter of FY27 and plans to launch an electric bus by the end of that quarter or early in the following financial year, the company’s executive chairman Vinod Sahay said on Thursday.
Speaking to reporters at the launch of the BLAZO i-TRK heavy commercial vehicle range, Sahay said the company was managing cumulative material-cost inflation of about 5–6 per cent through price increases and cost-control measures. Price increases implemented in April and July so far total about 5 per cent, but their full effect on market operating prices is expected to take several months.
“We expect to fully mitigate this cost pressure through further market-driven price hikes and cost-control measures by Q4, bringing margins back to normal levels,” Sahay said. He added that any additional price increases would be calibrated according to market conditions.
SML Mahindra’s EBITDA margin fell to about 10.5 per cent in the quarter ended June 30, 2026, from 12.4 per cent in the same quarter a year earlier. The company attributed the pressure to higher raw-material and employee costs, as well as transition-related expenses.
Revenue from operations rose 13.2 per cent to about ₹958 crore in the first quarter of FY27, compared with ₹846 crore in the year-ago period. The increase was supported by seasonal bus demand and growth in light commercial vehicle volumes.
The planned electric bus will primarily target staff and school transportation segments, according to Sahay. The company is also developing an electric truck, although it has not announced a launch timeline for that vehicle.
Sahay also provided details about the proposed acquisition of Mahindra & Mahindra’s Truck and Bus Division. The existing truck and bus assembly lines at M&M factories will not be physically integrated into SML Mahindra. Instead, Mahindra-branded trucks and buses will continue to be manufactured by M&M under a contract-manufacturing arrangement.
Mahindra & Mahindra’s board approved the sale of its truck and bus division to listed subsidiary SML Mahindra for ₹525 crore on a slump-sale basis in July. The transaction is intended to create a unified truck and bus business under SML Mahindra. Integration of the division is expected by January.
The company plans to announce a three-year capital-expenditure plan for the consolidated SML Mahindra and Truck and Bus Division business next year. It is targeting revenue of ₹12,500 crore by FY31, while seeking to increase its combined commercial-vehicle market share from about 6 per cent currently to 10–12 per cent by FY31 and more than 20 per cent by FY36.
