Exports surged 16% to 4,153 units during the month as against 3,565 in July last year, it added.
Sales of passenger vehicles, including Scorpio, XUV500, Xylo, Bolero and Verito, also went up 20% to 17,356 units, from 14,456 units in the same month last year.
Commercial vehicle sales rose 8% to 13,168 units in July as against 12,148 units in the year-ago period, M&M said.
M&M Chief Executive (auto division) Pravin Shah said: "The advent of good monsoon so far has brought in positive sentiment for the economy and that is somewhat reflected in our performance."
"At Mahindra our growth is being driven by various product launches of the last financial year which have been in sync with customers' requirements," he said.
The company is hopeful of a positive outlook for the rest of the financial year, he added.