SML Mahindra is preparing to launch its electric bus, Hiroi.ev - previously showcased at the Bharat Mobility Global Expo 2025 - during this financial year (FY27), marking its entry into the segment.

The company, which reported moderate sales growth in FY26, is seeking to participate in the electric bus market in India amid the government's increasing focus on cleaner mobility.

"Within this financial year, there are plans to launch the first electric bus and enter this segment," said Vinod Sahay, Chairman of SML Mahindra & Mahindra Advanced Technologies and President - Aerospace, Trucks & Buses, during a post-earnings call.

Sahay stated that electric bus adoption continues to be driven primarily by state transport undertakings (STUs), while private operators remain cautious due to cost considerations and charging infrastructure constraints. "Apart from buses linked to STU procurement, there is limited participation from private sector buyers," he said.

The electric bus segment accounted for 4.5% of total bus sales in FY26 and continues to face challenges such as high costs, extended payback periods, and limited charging infrastructure. The company may participate in electric bus tenders based on the commercial viability of each opportunity. "Each opportunity will be evaluated on the basis of commercial viability and expected returns, and decisions will be taken accordingly," he said.

SML Mahindra's entry into the electric bus segment will place it in competition with companies such as PMI Electro Mobility, JBM Auto, Olectra Greentech, and EKA Mobility. PMI Electro Mobility secured a tender for 10,900 electric buses under the PM E-Drive scheme, followed by EKA Mobility and Olectra Greentech.

The company's immediate focus remains on strengthening its position in the internal combustion engine (ICE) commercial vehicle market while preparing for a transition towards electric mobility. SML Mahindra's revenue from operations increased by 18.3% to Rs. 28.4 billion (US$ 301 million) in FY26, compared with Rs. 24 billion in FY25. Profit after tax (PAT) rose by 31.3% to Rs. 1.6 billion for the financial year ended March 31st.

Market position

The commercial vehicle manufacturer was acquired in August last year, with Mahindra & Mahindra acquiring a 58.96% stake in SML Isuzu for Rs. 5.55 billion. The company reiterated Mahindra & Mahindra's objective of being among the top three players in India's intermediate and light commercial vehicle (ILCV) trucks and buses segment, with a focus on heavy commercial vehicles (HCVs).

Sahay indicated that there is potential to increase market share to 6%, with a target of 10-12% by FY31 and over 20% by FY36, alongside a FY31 revenue target of Rs. 150 billion.

To support this objective, SML Mahindra is planning network integration with Mahindra & Mahindra, with combined touchpoints expected to increase to 600. Sahay stated that more than 150 cross-service points have been identified, of which 70 are operational, with the remaining expected to be operational by the end of the current quarter.

Impact of West Asia developments

The company indicated that ongoing geopolitical tensions in West Asia and the possibility of rising oil prices could affect demand in the commercial vehicle industry after the first quarter of FY2026-27. While demand remains stable during the current peak season for school buses, the segment continues to face potential risks.

"There are no immediate concerns regarding demand; however, industry performance after Q1 FY27 will depend on several factors, particularly geopolitical developments and potential diesel price increases," Sahay said.

The company reported no impact on vehicle production and has implemented measures such as a price increase effective April 15th, 2026, to address rising commodity costs and prepare for potential adverse scenarios.

The management stated that multiple scenarios have been assessed, with corresponding action plans in place. The company also reported cost increases across several raw materials, including steel, copper, and polymers, and stated that it is focused on maintaining production continuity.