Mahindra Leadership Sees ‘Growth Gems’ Outpacing Core Business With 3x Profit Jump

Mahindra & Mahindra is successfully pivoting its business model to insulate the group from the volatile cycles of the automotive and agricultural sectors, as its “Growth Gems” division reported a 3x jump in profit during the first quarter of fiscal 2027.

The diversified portfolio—which includes real estate, logistics, and aerostructures businesses among others is now growing faster than the company’s core manufacturing engines. While Mahindra's auto and farm sectors delivered resilient profit growth of 21% and 15% respectively, the "Growth Gems" outpaced the rest of the group with a 39% revenue surge.

Context Play

However, to understand the performance of Mahindra & Mahindra (M&M), it is essential to look beyond the high-growth percentages and examine the absolute scale and accounting composition of the group’s various divisions. While the "Growth Gems" are currently the stars of the balance sheet in terms of growth velocity, the core Auto and Farm businesses remain the heavy-duty engines of the enterprise.

The Auto business generated Rs 34,387 crore in consolidated revenue this quarter, while the Farm business brought in Rs 12,501 crore. Even a "resilient" 21% profit growth in Auto represents a massive absolute contribution to the total consolidated profit of Rs 5,455 crore. In comparison, Growth Gems are subset of the broader Consolidated Services segment, which reported a total revenue of Rs 12,899 crore (up 31%). Within the Growth Gems, Mahindra Logistics achieved its highest-ever quarterly performance with a revenue of Rs 2,003 crore, representing a 23% increase. Mahindra Lifespaces reported residential pre-sales of Rs 925 crore, which was a 2x growth.

Strategic Diversification

The surge in these secondary businesses is part of a deliberate long-term strategy to ensure the group’s "engines are firing on all cylinders" even when the automotive market faces headwinds. Group CFO Amarjyoti Barua noted that the Growth Gems must continue to outpace the rest of the group to ensure "our diversification gets better and better."

This buffer proved critical this quarter as the core auto and farm businesses had to navigate 400 to 500 basis points of commodity inflation, driven by a 30% spike in rubber prices and a 10% increase in steel. For instance, after several challenging years, Mahindra Logistics, the logistics arm reported its highest-ever quarterly performance, with revenue growing 23% to Rs 2,003 crore.

Mahindra & Mahindra Managing Director Anish Shah emphasized that the foundation built over the last three years is now yielding tangible results.
"Growth gems are driven essentially by real estate... by logistics, up 3x," Shah said. "Something we've been talking about for a while... we now see a 3x profit growth for growth gems, and that really brings multiple businesses, all our engines firing on all cylinders".