Press Release

Mumbai, 29th May 2006: The Board of Directors of Mahindra and Mahindra Limited
today announced the results of both the company and the consolidated Mahindra Group
for the quarter ended 31st March 2006 and the audited results for the year ended 31st
March 2006.

The Gross sales and Operating income for the year ended 31st March 2006 of
Consolidated Mahindra Group is Rs. 13595.3 crores (US $ 3.04 billions) as
against Rs. 10464.1 crores (US $ 2.39 billions) for the previous year. The Group net
sales and operating income grew by 31% to Rs.12335.4 crores (US $ 2.76 billions)
in the current year from Rs. 9394.3 crores (US $ 2.14 billions) in F2005. The profit
before exceptional items and tax for the current year is Rs. 1539.1 crores (US $ 344
millions) as compared to Rs. 979.2 crores (US $ 223 millions) in the previous year – a
growth of 57%. This is due to the excellent performance of the parent company and
group companies like Tech Mahindra, Mahindra Finance, Mahindra Holidays, Mahindra
Gesco, Mahindra South Africa, MUSCO and others. The consolidated group Profit after
Tax after including the share in profits of Associates for F2006 is Rs.1404.01 crores
(US $ 314 millions) as against Rs.724.1 crores (US $ 165 millions) earned last year – a
growth of 94%.

The Gross sales and Income from Operations of Mahindra & Mahindra Ltd. for the
year ended 31st March 2006 is Rs.9347.6 crores as compared to Rs.7695.6 crores in
F2005. The net sales and operating income during F2006 at Rs.8222.7 crores
represents - a growth of 23% over Rs.6660.6 crores in the previous year. Profit
before exceptional items and taxation for the year is Rs. 889.5 crores – an increase of
27% over Rs.700.6 crores last year. The improvement in profits is due to strong sales
performance especially by the company’s Farm Equipment Sector and continued focus
on operating and financing costs. The company’s Net Profit for the year after providing
for current and deferred taxation is Rs.857.1 crores – an increase of 67% over Rs.
512.7 crores in F2005.

The net sales and income from operations of Mahindra & Mahindra Limited during Q4 F
2006 is Rs. 2288.8 crores as against Rs. 1910.7 crores during the corresponding period
last year - a growth of 20%. Profit before exceptional items and tax for the quarter is
Rs. 241.0 crores as compared to Rs. 199.8 crores in Q4 last year – an increase of
21%. The Net Profit for the quarter after considering exceptional items and providing
for both current and deferred taxes is Rs.321.2 crores as against 152.7 crores in Q4
previous year – an increase of 110%.

The Directors have recommended a dividend at 75% on the enhanced share capital and
also a Special Dividend of 25% aggregating to Rs.10 per share. The special
dividend is being recommended in light of the very successful listing of the
MMFSL equity shares on the stock exchange. The dividend, together with the tax
thereon, will absorb a sum of Rs. 278.19 crores (previous year Rs.171.96 crores
comprising of a dividend of 100% and a special dividend of 30%) and will be paid to

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those shareholders whose names stand registered in the books of the Company as on
the book closure date.

Automotive Sector: In F2006, the company continued to dominate the utility vehicles
segment with the market share of 47.6%. The company sold 114694 utility vehicles in
F2006 as against 111138 nos. sold last year. The company’s domestic utility vehicles
sale grew by 3% during the year against an industry growth of 6%. Scorpio continued
to drive volume growth in F2006 with a sale of 31661 nos. – a growth of 18% over the
previous year. In LCVs segment (load carrying capacity upto 4MT) the industry
witnessed a decline of 7% in F2006. The sale of LCVs carrying Mahindra brand name
during the year was 6777 nos. as against 7887 sold in the previous year.

The large three-wheeler segment which had witnessed rapid growth since 2001,
declined for the first time in F2006. The company sold 18,112 large three-wheelers
against 22,943 in F2005, a decline of 21% in line with a segment decline of 20%.
However the company continues its strong performance with a market share of 41.6%.

During Q4 of F2006 the company sold 33654 utility vehicles against 32183 nos. sold in
Q4 last year – a growth of 4.6%. In Q4 the company also launched the new Scorpio
with 43 additional customer centric features. The product has been received well in the
market and is expected to drive demand in the premium utility vehicles segment.

Exports were a major thrust area during the year with the company’s vehicles being sold
across the globe in Europe, Middle-East, South America, South-East Asia and Africa.
There was a quantum jump in export volumes from 3046 vehicles last year to 5534
vehicles in the current year – a growth of 82%.

Farm Equipment Sector: The tractor industry witnessed a growth of 18.4% during
the current year with sales (including Exports) of 292957 nos. against 247353 nos. sold
last year. The company’s sales of tractors grew by 30% from 65390 tractors sold last
year to 85029 during the current year. The company’s full year domestic market share
grew to 29.7% from 26.5% last year, thus consolidating its leadership position in the
market for the 23rd consecutive year. During Q4 the company sold 21640 tractors – a
growth of 23.1% over 17578 nos. sold in the same period last year. The company
continued its focus on maintaining a lean and healthy pipeline and believes that its
dealer stock and outstandings are the lowest in the industry. The company’s tractor
exports during the year grew by 29.6% to 6981 nos. as against 5385 nos. exported last
year.

The company continued to grow its engine business by selling 14692 engines against
6672 engines sold last year – a growth of 120%.

Outlook: The increasing industrial production, buoyant exports and a more than 8%
GDP growth in F2006 have all contributed to a very positive business sentiment. The
IMD has forecast a near normal monsoon for the forthcoming season. These augur well
for the businesses of the group. However the rising interest cost, exchange rate
volatility and crude oil prices will need careful monitoring. The Group looks forward to
the new financial year with measured optimism.

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Note : Rupee has been converted to US Dollar at the year end exchange rate of the
respective year.
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