Driving Synergy: How SML Isuzu Will Accelerate Mahindra’s CV Ambitions

•    Mahindra targets 10–12% market share in >3.5T commercial vehicles within five years.
•    SML Isuzu acquisition to boost presence in LCVs, ILCVs, and bus segments.
•    Combined CV business to cross ₹5,000 crore in revenue and enter top four rankings.
•    Strategic focus on electric buses, cost synergies, and network expansion.

Mahindra & Mahindra has signaled its renewed ambition in the commercial vehicle (CV) space with a calculated move: the acquisition of a 58.96% stake in SML Isuzu Ltd. for Rs 555 crore, along with a mandatory open offer for an additional 26% stake. With this, the auto major aims to triple its market share in the CV segment above 3.5 tonnes—from just over 3% to 10–12% by FY31—and firmly establish itself among the top four players in the trucks and buses category.

But this isn’t just another acquisition. For Mahindra, this deal is the culmination of a five-year turnaround story and the beginning of a new phase it calls "delivering scale."

“This is a business that we really like, and we feel can do a lot,” said Anish Shah, MD & CEO of Mahindra & Mahindra. “We got the opportunity of an acquisition which we feel will position us very well—an acquisition which we feel is an appealing one and a very strong strategic fit.”

The acquisition deal was finalised at Rs. 650 per share, with the open offer price calculated at Rs . 1,554.60 per share, following SEBI’s regulatory pricing formula. “The valuation is one where we feel that this is a fair deal overall and one that positions the business well to grow,” Shah explained. “It makes sense now. If it hadn’t, we wouldn’t have gone ahead.” 

A Play for Leadership in LCVs and Buses

At the heart of this transaction lies strategic alignment. SML Isuzu brings a formidable presence in the LCV bus segment, commanding a 16% market share. Mahindra’s existing footprint adds to this, bringing the combined share to 21% in what both companies believe is a stable, growing subsegment driven by public mobility and urbanisation trends.

“The market share that [SML] has in that segment is close to 16%. When we add the Mahindra market share to that, that takes that share to 21%,” said Rajesh Jejurikar, Executive Director – Auto & Farm Sectors.

Jejurikar also clarified that Mahindra’s overall share in trucks and buses above 3.5 tonnes stands at 3.2% today, down from 4.8% in FY19, following COVID-related disruptions and BS6-related supply challenges. “We lost share through a two-year period… but over the last two years, we’ve been working to get share back and have already gained 0.6 to 0.7%,” he said. The company is now aiming for 10–12% share over the next five years—driven largely by LCV and ILCV segments, with measured expansion in MHCVs, where Mahindra currently has only a 2% share.

A Rs 5,000 Crore Platform for Scale

The Mahindra Trucks and Buses Division (MTBD) and SML Isuzu bring a combined revenue of over ₹5,000 crore, a broad product portfolio, and a growing reputation in high-efficiency trucks and reliable bus platforms. The Furio, Blazo, and Cruzio platforms on Mahindra’s side complement SML’s in-house bus body capabilities, frugal manufacturing culture, and local supplier base.

“SML Isuzu has a very strong product portfolio. They’ve already made significant investments over the last four years… It’s a well-run, frugally designed factory,” Jejurikar noted. “Most investments, if at all, will be needed only as we ramp up capacity.”

The electric bus segment is another area in which Mahindra gains access. SML Isuzu is at an advanced stage of development for EVs in the staff, school, and executive coach categories. “We believe that with our expertise on electric through multiple segments, we can strengthen that proposition and probably improve costs,” said Jejurikar.

Synergies Without Disruption

While the businesses will operate independently as listed entities, the plan is to run them operationally as one. “No entity rationalization is planned at this stage,” confirmed Amarjyoti Barua, CFO – Mahindra Group. “This deal isn’t about taking costs out. It’s all about growth.”

Still, synergies abound. Shared platforms, supplier bases, common engine and aggregate usage, and especially network expansion, are immediate focus areas. Both brands have over 100 dealerships and around 200 service touchpoints. That’s where we’ll begin—by strengthening after-sales and customer reach,” said Vinod Sahay, President – Trucks, Buses and Construction Equipment.

Sahay, who has a strong industry background and now leads the integration, highlighted how MTBD’s strength in fuel-efficient trucks and SML’s CNG and bus capabilities are complementary. “If you do the arithmetic, that actually takes us from a 6% to 10–12% share in five years,” he said.

A Business That Has Earned Its Right to Grow

Importantly, Shah framed the deal as a reward for MTBD’s performance over the past five years. “You’re correct that we had it under a scanner five years ago,” Shah told the media. “We had outlined what the business needs to do from a turnaround standpoint. If the business met that, then it could take the next step. If it did not, we would look at an exit. The business has met and exceeded expectations, which allows us to take this step.”

Now, with a renewed structure, leadership, and strategic alignment, Mahindra is betting on its CV business not just to survive, but to scale, differentiate, and lead.