Tax relief and RBI rate cut to drive growth in the ₹10-25 lakh car segment: M&M

Mahindra & Mahindra recorded a 19% increase in year-on-year earnings to Rs 2,964 crore in the October-December quarter of FY25, driven by high SUV demand. The corporation continued to dominate the SUV industry, with a 23% share.

The tax relief in the union budget FY26 and the RBI's repo rate decrease are expected to stimulate demand for cars priced between Rs 10 lakh and Rs 25 lakh, according to a top Mahindra & Mahindra official.

On February 7, the RBI decreased the repo rate by 25 basis points to 6.25%. "Demand for products priced between Rs 10 and 25 lakh in the country would be extremely high. And our objective is to compete in the Rs 7-25 lakh range," says Rajesh Jejurikar, Executive Director-Auto & Farm Division at Mahindra & Mahindra.

According to Dr Anish, Mahindra & Mahindra's Group CEO, tax cuts will stimulate demand among the middle class. "We believe the fundamentals for the Indian economy are powerful, and we've seen some blips in the short run. The relief in terms of taxation for the middle class puts more money in their hands, which will create a demand stimulus and translate to greater capex from the private sector, which has also been lacking in some way." Similarly, the rate cut will assist in creating a little more demand stimulus. So, both are excellent economic moves," argues Shah.

Mahindra & Mahindra reported a 19% increase in year-on-year profit to Rs 2,964 crore. In comparison, income from operations increased by 20% YoY to Rs 30,538 crore in the October-December quarter of FY25, owing to robust SUV (sports utility vehicle) demand. The corporation continued to dominate the SUV industry, with a 23% share.