New Delhi, March 2 Mahindra & Mahindra said on Monday that it has decided to exit its Japanese agricultural machinery business as part of a portfolio rationalization following a strategic review.
The board of Mitsubishi Mahindra Agricultural Machinery Co Ltd (MAM), which operates in Japan, has approved withdrawing from the agricultural machinery business, the Mumbai-based company said in a regulatory filing.
MAM has also announced that the business that provides spare parts and product warranty services will continue to operate, it added.
With respect to businesses other than the continuing business, MAM plans to dissolve and proceed with liquidation procedures in accordance with the applicable law, it stated.
"Despite multiple measures aimed at restoring profitability, MAM has continued to incur losses. After a detailed assessment of the business' long-term viability and financial sustainability, MAM has determined that sustaining the business in a stable manner going forward would be challenging," it stated.
Once the liquidation procedure is complete, the promoter group will not have to incur the annual loss or fund these losses, it added.
The company plans to cease the production and sale of agricultural machinery by the first half of fiscal year 2027.
MAM will proceed with the business withdrawal while giving due consideration so as to minimize inconvenience to all stakeholders, including business partners, it stated.
Each business partner will be contacted individually in due course, it added.
"In addition, except for employees engaged in the continuing business, the company will provide maximum possible re-employment support to employees who are unavoidably required to leave as a result of this business withdrawal," it stated.
The revenue from operations of MAM for the year ended March 31, 2025 stood at Rs 2,094.17 crore, and after elimination of intercompany transactions with the Mahindra Group, MAM contributed Rs 1,786.03 crore or 1.13 per cent to the consolidated turnover.
M&M shares were trading 2.82 per cent down at Rs 3,303.90 apiece on BSE.
