SML Mahindra has opened FY27 on a steady note, with management saying demand remains resilient in its key segments even as it monitors diesel prices, geopolitical uncertainty, and the trajectory of the commercial vehicle industry after the current peak season.

Chairman Vinod Sahay said the company was not seeing any immediate demand stress despite a mixed operating backdrop for the industry. “What we are seeing today is that, in spite of all the challenges that we have around us so far, we don't see any major concern as far as the demand situation is concerned,” he said.

Sahay said the commercial vehicle industry had delivered a split performance last year, with the first half largely flat and the second half improving sharply after GST-related changes. “For the first half, the industry was almost flat with just about a 2% increase. But in the second half, post the GST reform, the industry grew quite well, almost 22%,” he said.

He added that trucks, or the cargo segment, outpaced buses in growth, while SML Mahindra is currently in its strongest selling window for school buses. “Quarter 4 and Quarter 1 are the peak selling seasons for school buses, which is a strong play for SML Mahindra,” Sahay said.

Even so, the company is cautious about calling the full-year industry trajectory too early. Sahay said demand after the first quarter would depend on several factors, especially fuel costs and global developments. “How the industry will play out after Quarter 1 is dependent upon multiple factors, especially in view of the current geopolitical situation and the likely talks about diesel price increases,” he said. He added, “CVs are very sensitive to diesel price increases.”

On the cargo side, Sahay said the industry continues to be supported by replacement demand and expansion by fleet operators. “As of now, what we know for a fact is that when it comes to the cargo segment, the industry is sitting on a huge pent-up demand from the replacement cycle,” he said. He also pointed to improving sentiment among operators: “Many segments, many operators, and many of our customers are looking at fleet expansion.”

Group CFO Amarjyoti Barua said the company is not taking a wait-and-watch approach internally, despite external uncertainty. “Like everybody else in the group, SML Mahindra has also worked out multiple scenarios and has an action plan for every scenario, so we are not waiting for things to evolve. We have a very clear plan of action depending on how things evolve. Whether it is plus or minus, it should not matter we are prepared for it,” Barua said.

On market share fronts, SML Mahindra’s share in cargo vehicles grew 20 basis points year-on-year to 3.6% in FY26, and passenger vehicle share grew 80 basis points to 16%. The company sold 5,412 cargo vehicles in FY26, up 28% YoY, and 11,220 passenger vehicles, up 12% YoY. However, in the March quarter, the company saw a dip of 40 basis points in cargo share to 3.3%, caused by the timing of institutional order execution.

Sahay explained that the apparent weakness in the fourth quarter was linked to order phasing rather than a structural loss of momentum. At the same time, he highlighted stronger execution in buses during the peak season. “But the benefit of that you clearly saw is that in Q4, with three of the strategies for the bus segment, which is the peak selling season, we gained 170 basis points in just one quarter,” Sahay said.

Looking further out, SML said it remains committed to the market share ambition outlined when the deal with Mahindra & Mahindra Ltd was announced in April. “So, we are very much on track with our long-term aspiration,” Sahay said.

Mahindra & Mahindra Ltd acquired a controlling 58.96% stake in SML Isuzu in 2025 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.

Sahay also struck a bullish note on the long-term outlook for India’s commercial vehicle market, arguing that structural growth drivers remain intact. “India’s growth story is here to stay, and all of us know that. The CV industry is very directly linked to the GDP growth of India, especially manufacturing GDP and mining GDP, and we believe India will continue to grow,” he said.

He added that India remains one of the world’s most important commercial vehicle markets and one of the few still expanding. “The long-term outlook of the industry is very positive. India is one of the four large commercial vehicle markets across the world China, India, Western Europe, and North America. Among these four, China and India are the only ones which are growing, and India is hence a very large opportunity,” Sahay said.