Mahindra Group is betting on a dual-brand strategy to scale up its presence in the commercial vehicle space and challenge incumbents, choosing to run SML Mahindra Ltd and its Mahindra Truck and Bus Division as separate entities with distinct strengths, while leveraging synergies across sourcing, engineering and network to drive growth, plug portfolio gaps and improve profitability, said a senior company official.

"Both brands have their own strengths, and they will continue. They stand for quite different things in the market. Mostly, they don't cannibalise each other; they have an independent network, and hence they are continuing," Vinod Sahay, Chairman - SML Mahindra & Mahindra Advanced Technologies and President - Aerospace, Trucks & Buses, said during an earnings call.

"Going forward, we will continue to evaluate which brand can play a higher role in which segment, but that is something which we will go very slowly as we speak. The strategy is clear that when it comes to customers, they would continue to have the choice between the two brands," he added.

The dual-brand approach forms the core of Mahindra's strategy to expand in the medium and heavy CV space, where it currently has a limited presence. The group is targeting a significant scale-up, with ambitions to become a top-three player over time.

"The main thesis behind this acquisition was growth. We are two challenger brands which have come together, and ultimately the aim is to become a top-three player," said Amarjyoti Barua, President & Group CFO, Mahindra Group.

Barua added that while profitability will improve through integration, the primary focus remains on expanding market share. "So clearly profitability will improve on a combined basis because of everything that we have mentioned, but can't lose sight of the fact that the main reason for bringing these two companies together was growth," he said.

SML Mahindra has also ruled out any immediate structural changes such as delisting or merger with Mahindra Truck and Bus Division, signalling a measured approach to integration.

"As far as your question related to delisting of SML is concerned, the clear answer to that is no… at this moment we are working on long-term strategy… just give us some more time and at the right time we will come back and share with you more on that," Sahay said.

Network Expansion

The first phase of SML, Mahindra integration is focused on strengthening the service network, a critical factor in CV buying decisions, according to the management.

Independently, both brands have around 300 touchpoints each, taking the combined network to about 600. The company has already identified 150 service outlets for cross-support, of which 70 are operational and the remaining are expected to go live this quarter. This will take each brand's effective service reach to around 450 touchpoints, said Sahay.

However, SML Mahindra is treading cautiously on the dealership side to avoid disrupting existing investments and overlapping networks. "We will be treading carefully because there are many cities… where we have network of both the dealerships and we do not want to disturb that," Sahay said.

However, in underserved markets, the companies may appoint common dealers to expand reach more efficiently. "There is obvious case that we will appoint a common dealer… because both brands put together is providing higher potential," Sahay said.

Synergies across sourcing, engineering, manufacturing

According to Sahay, the integration of two brands is being driven primarily through backend synergies, including sourcing, engineering and manufacturing efficiencies.

The two companies are also exploring a cross-badging strategy to plug product gaps, enabling faster portfolio expansion without significant incremental investment.

"We are working towards the strategy of cross-badging, the products which SML does not have, which Mahindra has or vice versa can be made via cross-badging strategy and that is what we are working towards and that is also part of the integrated product strategy," Sahay said.

The company is also leveraging combined scale to reduce costs in sourcing and development, particularly in areas such as advanced driver assistance systems (ADAS), which will become mandatory in the CV segment in a phased manner over 2026 and 2027.

"That itself is a combined project… which has led to significant saving both in the piece price… and a substantial reduction in the development cost," he said.

Engineering synergies are another key lever, with SML gaining access to Mahindra's R&D capabilities, including its mobility research platforms and talent pool.

"Engineering related synergies are huge… SML has limited capabilities in key areas like engine development or ADAS… with Mahindra access… we are opening that… to be able to come up with the development faster," Sahay said.

In addition, manufacturing and sourcing integration is also expected to improve cost efficiency and reduce capital intensity over time. "We are already seeing some early benefits on sourcing front… there are manufacturing related synergies which can bring down the cost as well as the capex outlay," he added.

Mahindra & Mahindra Ltd completed acquisition of the controlling 58.96% stake in SML Isuzu Ltd for a total consideration of Rs 555 crore in 2025. The company said the acquisition was part of its plan to strengthen its position in the >3.5-tonne commercial vehicle segment, where it currently holds just a 3% market share, compared with a dominant 54.2% in the sub-3.5 tonne LCV space. With the integration of SML's portfolio and network, M&M aims to immediately double its overall CV market share to 6%, and expand it to 10–12% by FY31 and over 20% by FY36.