India’s passenger vehicle market reached a record 4.7 million units in FY26, growing 8 percent year-on-year.
SUVs accounted for more than 60 percent of industry volumes, compared with less than 30 percent a decade ago.
Among the biggest beneficiaries of this shift have been Mahindra & Mahindra and Tata Motors. Both companies delivered record passenger vehicle numbers, but their strategies and financial profiles differ.
Mahindra’s FY26: Strong execution across the board
FY26 was a strong year for Mahindra’s automotive business.
Key highlights
- SUV volumes rose 19 percent.
- Revenue market share increased by 260 basis points to 25.3 percent.
- Auto segment PAT climbed 33 percent.
- Standalone margins expanded by 80 basis points to 10.9 percent.
- Group PAT rose 35 percent.
- ROE crossed 20 percent, above management’s target of 18 percent.
Despite supply chain disruptions, Mahindra reported 42 percent PAT growth in Q4 FY26.
Demand exceeds capacity
Management indicated that several models are constrained by production capacity rather than demand.
Monthly volumes
- XUV 7XO: Around 9,500 units.
- Bolero and Bolero Neo: 9,000-10,000 units.
Demand remains strong for:
- Scorpio-N.
- Thar.
- Thar Roxx.
- XUV 3XO.
According to management, capacity remains the key bottleneck.
EV business turned profitable
Mahindra’s EV business delivered better-than-expected results.
EV performance
- EV penetration in FY26: 9.6 percent.
- EV penetration crossed 10 percent in the last two months of the year.
- EV revenue market share reached 37.7 percent in Q4.
- Full-year EV PBIT stood at ₹287 crore.
Management said the EV business became profitable ahead of expectations.
Expansion plans
Mahindra is increasing production capacity.
Capacity roadmap
- ICE capacity to rise from 56,500 units to 60,000 units by September.
- Additional EV capacity of 14,000 units planned through FY28.
- New plant at Nagpur expected by mid-2028.
By FY31, the company plans:
- 10 new ICE SUVs.
- 6 battery electric vehicles.
Tata Motors’ passenger vehicle business recovered strongly
Tata Motors witnessed a slower first half, followed by a stronger second half.
FY26 performance
- Passenger vehicle volumes reached a record 6.42 lakh units.
- Volume growth stood at 15 percent.
- Market share exceeded 14 percent.
- Q4 volumes crossed 2 lakh units for the first time.
The company maintained the number two position in Vahan market share.
Popular models
- Nexon ranked among the top-selling models.
- Punch held the third position among passenger vehicles in H2 FY26.
EV and CNG portfolio remain strengths
Tata Motors continued to expand alternative fuel offerings.
EV business
- EV sales: 92,000 units.
- Growth: 43 percent year-on-year.
- EV market share: More than 40 percent.
CNG business
- CNG volumes crossed 1.7 lakh units.
- CNG accounted for 27 percent of the portfolio.
Combined EV and CNG penetration exceeded 40 percent of sales.
The company also received more than ₹1,000 crore under the PLI scheme during FY26.
Margins remained under pressure
Tata Motors reported:
- Q4 EBITDA margin of 9.4 percent.
- PBT before exceptional items of ₹1,100 crore.
Commodity inflation affected profitability.
Management said it absorbed cost increases through efficiency measures rather than raising prices.
FY27 growth plans
Tata Motors expects growth to remain ahead of the industry.
Planned launches
- Two new nameplates.
- Four facelifts.
- Launch of Sierra.ev next quarter.
Exports, which crossed 10,000 units in FY26, are expected to grow 70-100 percent in FY27.
Management said supply, not demand, remains the main constraint.
Mahindra vs Tata Motors
Mahindra
Strengths
- Higher margins.
- Strong SUV franchise.
- Profitable EV business.
- Capacity expansion underway.
- No JLR exposure.
Challenges
- Supply constraints.
- Need for continued capacity additions.
Tata Motors
Strengths
- Strong EV franchise.
- Large CNG portfolio.
- Healthy product pipeline.
- Export growth opportunities.
Challenges
- Margin pressures.
- Commodity cost inflation.
- Exposure to JLR and global market conditions.
Verdict
Based solely on the domestic passenger vehicle business, Mahindra & Mahindra appears stronger at present.
The company combines volume growth with margin expansion and has already achieved profitability in its EV operations.
Tata Motors continues to have a strong passenger vehicle business and a deep product portfolio. However, margin pressures and the broader challenges linked to JLR continue to influence the overall investment picture.
TL;DR
Both Mahindra and Tata Motors reported record passenger vehicle volumes in FY26. Mahindra currently enjoys stronger margins and a profitable EV business, while Tata Motors offers long-term opportunities through EVs, CNG vehicles and new launches.
AI summary
- Mahindra’s SUV volumes grew 19 percent in FY26.
- Mahindra’s EV business posted PBIT of ₹287 crore.
- Tata Motors sold 6.42 lakh passenger vehicles in FY26.
- Tata’s EV sales rose 43 percent to 92,000 units.
- Mahindra currently has stronger margins, while Tata offers longer-term EV opportunities.
