Mahindra and Mahindra (M&M) on Monday said its associate firm Mitsubishi Mahindra Agricultural Machinery Co., Ltd. (MAM) and its subsidiaries will withdraw from the agricultural machinery business, citing continued losses despite multiple structural measures aimed at restoring profitability.
MAM’s board approved the decision on March 2 after a detailed assessment of the business’s long-term viability and financial sustainability. The company plans to withdraw R&D activities and cease the production and sale of agricultural machinery by the first half of fiscal year 2027.
However, MAM will continue to support its existing customers through the supply of spare parts and warranty services for its products.
Financial impact on M&M
For FY25, MAM reported revenue from operations of ₹2,094 crore. After elimination of inter-company transactions with the Mahindra Group, it contributed ₹1,786 crore, or 1.13%, to M&M’s consolidated turnover.
The company’s net worth stood at ₹(18) crore. After adjustments and elimination of inter-company balances, MAM contributed ₹(12) crore, or (0.02)%, to the consolidated net worth of M&M, excluding non-controlling interest.
MAM posted a net loss of ₹(227) crore for FY25. After eliminations, it contributed ₹(152) crore, or (1.17)%, to the consolidated profit after tax of M&M, excluding non-controlling interest.
On completion of the liquidation process, the promoter group will no longer need to incur the annual losses or fund the business.
Challenging business environment
Founded in 1914, MAM has been engaged in the agricultural machinery business with the objective of contributing to a stable food supply in Japan and overseas markets. Its products have been supported by farmers for decades.
Despite pursuing sustainable growth through structural reforms, development of new products and expansion into new markets, MAM said recent changes in the domestic and international industry environment, shifts in demand structure and constraints related to the production system have weighed on profitability.
After a comprehensive review of the long-term sustainability of the business, the company concluded that continuing operations in a stable and sustainable manner would be difficult.
Liquidation and stakeholder support
MAM plans to dissolve and proceed with ordinary liquidation procedures in accordance with applicable laws in Japan. Businesses other than the continuing operations will also be wound down under the relevant provisions of the Companies Act.
The company said it will take steps to minimise inconvenience to stakeholders, including business partners, who will be contacted individually. Except for employees engaged in continuing operations, MAM will provide maximum possible re-employment support to those unavoidably affected by the withdrawal.
The company expressed gratitude to customers, partners and related parties for their support over its long years of operations.
Loss-Making M&M Associate in Japan Plans Liquidation