11 Jun , 2026 By : Debdeep Gupta
Shares of Mahindra & Mahindra (M&M) declined in early trade on Thursday after a report highlighted potential production disruptions arising from labour shortages at key suppliers.
The stock fell as much as 1.67 percent to an intraday low in early trade at around 9:18 am on the NSE. It later pared some losses and was trading at Rs 2,923.20, down 0.99 percent, at 9:36 am.
Investor sentiment appeared to be weighed down by a report in The Economic Times, which said M&M mark could face up to a 15 percent reduction in SUV production during June due to labour shortages affecting some of its critical vendors.
The report cited people familiar with the matter as saying that a major supplier is facing a 20-25 percent supply shortfall because of a shortage of contract workers. The disruption is reportedly impacting production linked to popular models such as the XUV 7XO and Thar. Mahindra has an installed production capacity of around 57,000 petrol and diesel vehicles per month.
The Economic Times said the issue reflects a broader labour crunch across manufacturing hubs in western India. Industry executives attributed the shortage to higher wage rates in states such as Haryana and Uttar Pradesh, along with welfare schemes and increasing self-employment opportunities that have reduced migration to industrial centres.
"Labour shortage is no longer a Maharashtra-specific issue - it is a pan-India manufacturing challenge," Rajesh Soni, CEO of Neolite ZKW Lightings, told ET.
Sudhir Mehta, founder and chairman of EKA Mobility, told ET that automotive clusters around Pune and Aurangabad are facing a mismatch between labour demand and supply. "This has created constraints in the availability of semi-skilled and unskilled workers for activities such as welding and shop-floor operations," he was quoted as saying.
The report noted that the timing is challenging for Mahindra as demand for its SUVs remains strong. The company reported SUV sales growth of 19 percent in FY26, with momentum continuing into the current fiscal year.
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