M&M's Japan arm to exit agri machinery biz; decision on Mar 2, 2026

Mahindra & Mahindra's Japan-based associate, Mitsubishi Mahindra Agricultural Machinery, is withdrawing from the agricultural machinery business. The decision was made due to continued losses, with a phased cessation planned by H1 FY27.

Mahindra & Mahindra Limited on Monday informed the stock exchanges that its Japan-based associate, Mitsubishi Mahindra Agricultural Machinery Co., Ltd. (MAM), has approved withdrawal from its agricultural machinery business.

The decision was approved by MAM's board on March 2, 2026. The withdrawal will cover research and development, production, and domestic as well as overseas sales of agricultural machinery. The company plans to cease production and sales in a phased manner by the first half of fiscal year 2027.

However, MAM said it will continue its spare parts supply business and product warranty services for existing customers.

"With respect to businesses other than the continuing business, MAM plans to dissolve and proceed with liquidation procedures in accordance with the applicable law," M&M said in its regulatory filing.

Rationale for Withdrawal

Explaining the rationale, the company said MAM has continued to incur losses despite multiple structural measures aimed at restoring profitability. After assessing the long-term viability and financial sustainability of the business, it concluded that sustaining operations in a stable manner would be challenging going forward.

Financial Impact on M&M

As per disclosures, MAM reported revenue from operations of Rs 2,094 crore for the year ended March 31, 2025. After elimination of intercompany transactions with the Mahindra Group, it contributed Rs 1,786 crore, or 1.13 per cent, to the consolidated turnover of M&M.

MAM's net worth stood at Rs 17.74 crore as on March 31, 2025. After intercompany adjustments, it contributed Rs 11.83 crore, or 0.02 per cent, to the consolidated net worth of the company, excluding non-controlling interest.

The associate reported a loss after tax of Rs 227.42 crore for FY25. After adjustments, it contributed Rs 151.61 crore, or 1.17 per cent, to the consolidated profit after tax of M&M, excluding non-controlling interest.

Future Steps and Stakeholder Considerations

On completion of the liquidation procedure, the promoter group would not be required to incur annual losses or fund the business further.

The company added that it will proceed with the withdrawal while giving due consideration to minimise inconvenience to stakeholders, including business partners, who will be contacted individually. Employees not engaged in the continuing business will be provided maximum possible re-employment support. (ANI)

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