Mahindra & Mahindra Ltd’s April production was hit by shortfalls at two suppliers, with the disruption affecting both passenger vehicle and commercial vehicle output, a senior company official said. The automaker expects the situation to improve in May after resolving one supplier issue and creating alternate options for the other.

Speaking during the company’s post-earnings analyst call, Rajesh Jejurikar, Executive Director and CEO of Auto and Farm Sector, said April was affected by issues at two suppliers, which led to a shortfall against the company’s production plan. “We are hoping May will not be like April. April was a huge disappointment for us,” he said.

The supply issue came at a time when Mahindra is seeing strong demand across several SUV nameplates, including the XUV7X0, XUV 3XO, Thar, Scorpio-N and its electric SUV portfolio. The company has guided for mid-to-high-teens growth in SUVs in FY27, supported by capacity expansion and sustained demand.

Jejurikar said the April weakness should also be seen against a high base for Mahindra. In Q1FY26, the company grew 22%, while the rest of the industry declined 4.7%.

According to Jejurikar, April’s shortfall was not an overall capacity issue but was linked to specific supplier constraints. 

“It was 2 suppliers on which we had major shortages,” he said. “One is definitely out of it. The 2 we’ve created some options and is out of it,”

Separately, Mahindra said the memory-chip issue is not over and is unlikely to ease quickly, as global demand for artificial intelligence applications continues to tighten supplies.

“I don’t think there is going to be a behind that on that. You just have to stay ahead of that,” Jejurikar said in response to a question on memory chips.

He said demand for memory chips is being driven by large AI applications, and this is likely to keep the market tight for some time.

“That issue is not going to go away for a while because, as you all know, the memory chips are being driven into vast AI applications, and that is not going to slow down for some point of time,” he said.

Mahindra has been trying to secure supply by contracting early, buying larger quantities and building inventory. This strategy, however, comes with a cost impact.

“The DRAMs, we were anticipating this 3, 4 months back, and we have got aggressively into contracting and buying long quantities, whatever we could. There’s a huge inflationary impact in doing that, but we have focused on fortifying our supply so far,” Jejurikar said.

He added that the company will continue to build inventory even if it means buying at higher prices. “It’s really a question of building inventory or buying in the aftermarket, and we are aggressively buying in aftermarket to build inventory,” he said.

The comments underline the supply-chain pressures facing automakers even as demand remains healthy. While earlier disruptions were led by semiconductors and rare-earth materials, the current pressure points include memory chips, supplier-level manpower issues, fuel-linked supply concerns and commodity inflation.

Mahindra said gas availability, which had been difficult earlier, has stabilised in recent weeks and has not caused production disruption. However, manpower shortages at suppliers had emerged as a major issue, first due to gas-related disruption and later because of elections.

“Gas has been very difficult, but has not caused any disruption. We have been able to manage for us and our suppliers, availability of gas so far. Things have stabilized a lot in the last 2, 3 weeks,” Jejurikar said.

“The big disruptor for us was manpower. First because of gas and then because of elections. We are hoping that manpower starts coming back now that elections are over. This is not for us. This is for our suppliers,” he added.

For Mahindra, managing these supply-chain constraints will be critical as it ramps up SUV capacity during FY27. The company has said it will exit the first half of the year with 60,000 units of ICE SUV capacity and 8,000 units of EV capacity, before adding another 10,000 ICE units and 4,000 EV units by the end of the year for products planned in FY28.