SML Mahindra is targeting the launch of an electric bus by the fourth quarter of financial year 2026-27 or early in the following fiscal year, with the vehicle initially intended for staff and school transportation. The company is also developing an electric truck, although it has not announced a launch timeline.
Vinod Sahay, executive chairman of SML Mahindra and a member of the Mahindra Group executive board, disclosed the plans at the launch of the BLAZO i-TRK heavy commercial vehicle range on Thursday evening. He also said the company expects its operating margins to recover by the fourth quarter of the current financial year through further price increases and cost-control measures.
SML Mahindra recorded an EBITDA margin of about 10.5 per cent in the quarter ended June 30, 2026, down from 12.4 per cent in the same quarter a year earlier. Revenue from operations increased 13.2 per cent to about ₹958 crore from ₹846 crore in the year-ago period, supported by seasonal bus demand and higher light commercial vehicle volumes.
Sahay attributed the margin pressure to higher raw-material and employee costs, along with transition-related expenses. The company is facing cumulative material-cost inflation of about 5 to 6 per cent. Price increases introduced in April and July together amounted to about 5 per cent, but Sahay said it would take several months for the increases to be fully reflected in market operating prices.
“Total material cost pressure is around 5 to 6 per cent, whereas price increases taken in two tranches this year in April and July so far total around 5 per cent,” Sahay said. He added that the company expected to mitigate the cost pressure through further market-driven price increases and cost-control measures by the fourth quarter. Future price increases, he said, would remain calibrated and market-driven.
The company is also preparing for the proposed acquisition of Mahindra & Mahindra’s Truck and Bus Division. In July, Mahindra & Mahindra’s board approved the sale of the division to its listed subsidiary SML Mahindra for ₹525 crore through a slump-sale transaction. The integration is expected to be completed by January.
Sahay said there was no plan to physically integrate M&M’s existing truck and bus assembly lines into SML Mahindra. Mahindra-branded trucks and buses will continue to be manufactured by M&M under a contract-manufacturing arrangement, which the company said would maintain supply continuity and operational stability.
SML Mahindra plans to present a three-year capital-expenditure plan for the consolidated business next year. The combined entity is targeting revenue of ₹12,500 crore by FY31. It also aims to increase its 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.
