Overview

Mahindra & Mahindra (NSE: M&M) commenced its journey in 1945 with it getting into the steel business, and over time, the company expanded to 22 key industries. A need for change in the agricultural practices pushed it to foray into that sector right before the agriculture revolution began in India. The company became one of the key torch-bearers of the IT revolution in its country. The company's focus now lies in developing alternate energy sources because the company believe energy conservation will play a huge role in ensuring a better future – for not just its country and communities, but the entire world.¹

Business Segment

The company have multiple business segments

Aerospace

Airplanes speed up mobility, ensuring help is received when it’s most required. The company's planes act as air ambulances, supporting in rescuing animals and putting out wildfires, apart from serving as aircraft for adventure. The company also make airframe parts and assemblies for reputed aircraft platforms. So, the next airplane you board may have Mahindra parts in it.²

Aftermarket

Why shouldn't a used vehicle guarantee the quality of a new one? Mahindra Aftermarket represents its pioneering efforts to professionalise the pre-owned car and car service industry. The company's range of offerings, from financing and exchange platforms, maintenance and repair, and other services meet nearly every automotive need.

Agri Industry

The company empower farmers with the most relevant technology and agricultural know-how, and link them to the market, so they get better returns. The company's agricultural inputs, advisory services, and output procurement businesses equip them to deliver continued Farm Prosperity, while its Farm-to-Fork model ensures stringent quality checks throughout the supply chain.

Automotive

The company wanted to make the commute from point A to B, smoother. So, the company introduced to India its first utility vehicle. The company's desire to keep identifying ways to enhance the automotive experience, pushed it to foray into electric vehicles, pickups, and commercial vehicles. Today, Mahindra & Mahindra is preferred for delivering on durability, reliability, environment-friendliness, and fuel-efficiency.

Boats

The best way to explore open seas and water bodies is through its watercrafts. As India’s first boat builder in the organised sector, the company offer a bespoke fleet of state-of-the-art personal and commercial crafts that effortlessly combine modern luxury with stellar performance. Having created a new standard for watercrafts, we’ve now established an ISO 9001:2008 certified by TUV Austria facility to manufacture its sizeable fleet.

Clean Energy

The company see tremendous opportunity for producing clean energy by harnessing the abundant sunshine India receives. Mahindra Susten, its solar energy business is already a leader in the Solar EPC space, offering extensive expertise in Solar PV EPC; both Utility Scale and Distributed, Build Solutions, Operations and Maintenance and other Innovative offerings.

Construction Equipment

The company's foray into this industry comes on the back of seven decades of experience in making tough, rugged and durable utility vehicles, and tractors. Manufactured at its state-of-the-art facility at Chakan, Pune, the Mahindra EarthMasterTM embodies its promise of providing world-class construction equipment and services, backed by its famed and extensive dealer-network.

Consulting

With the aim to positively impact its partners, the company offer world-class consulting services in three key verticals: information security and risk management, engineering consulting, and business process management. The company also work to better protect the information assets, strengthen physical security and reduce risk for organisation, while offering BPM and advisory services.

Defence

The company aim to protect those who protect it. The company's gamut of defence offerings encompasses land systems, naval systems, defence electronics and security consulting. Aligned to the Government of India’s defence policy, making its forces self-sufficient is a key pillar for it. To this end, we’re aggressively scaling up its capabilities to meet the requirements of a nation on the rise.

Farm Equipment

Farm prosperity remains at the heart of all its agri-related endeavours. The company's tough and durable tractors and implements raise productivity in farms across all continents on earth. The world's largest selling tractor brand by volume, and India's no.1 tractor maker for over three decades, Mahindra & Mahindra is the only tractor company to have won the Deming Prize and Japan Quality Medal.

Hospitality

The company entered the Hospitality industry in 1996 to offer Indian families fun-filled and affordable vacations in some of the most exotic locations in the country. Two decades later, Mahindra & Mahindra is amongst the largest vacation ownership brands in the world. With over 46 resorts in India and abroad, the company aim to keep this number growing and extend this experience to more families.

Information Technology

Mahindra & Mahindra has a leading presence in the fast-paced information technology (IT) industry. With global expertise and seamless cross-platform functionality, the company create IT solutions that empower companies to focus on, and enhance their core businesses. Leveraging nearly three decades of experience, the company offer innovative solutions that integrate technology with business for several Fortune 100 and 500 companies. The company's services are delivered by a triage of companies: Tech Mahindra, Bristlecone and Mahindra Comviva, with each of these companies being a leader in their respective areas.

Insurance Broking

The company understand the importance of securing the future. So, the company forayed into the business of insurance, offering direct insurance and reinsurance broking services to corporate, retail and individual clients. From standard policies to special solutions, from children’s plans to retirement plans and more, the company hope to fulfil its customer needs through its bouquet of solutions.

Logistics

As one of India’s largest 3PL solutions providers, the company operate in two distinct business segments, Supply Chain Management (SCM) and corporate People Transport Solutions (PTS). The company service 400+ customers across Automotive, Engineering, Consumer Goods, Pharmaceuticals, Ecommerce, Bulk sectors for SCM and IT, ITES, Manufacturing, Banking, Financial Services and Insurance (BFSI), Consulting businesses for the PTS business.

Power Backup

The company know that power cuts eating into profits and inefficient DG sets cause losses. So, the company got into the gensets business to save businesses unnecessarily losses. As a result, Mahindra & Mahindra is today the leading manufacturing brand of diesel & gas generator sets across India.

Real Estate & Infrastructure

The company entered India’s real estate in 1994, aiming at re-defining sustainable urbanization. With its green residential spaces and smart infrastructure, the company work towards providing high-quality affordable housing to Indians.

Retail

On one hand, its e-commerce platform M2All brings together the varied portfolio of all its products together, on one platform. On the other, the company aim to bring to its customers the convenience of doorstep delivery of groceries too – fresh, organic produce, straight from the farm.

Rural Housing Finance

The company aim to transform rural lives by helping people arrange funds for constructing, renovating, and extending their houses. Set-up in 2007, Mahindra & Mahindra has today become the largest home finance company serving rural India. In 2014, the company were awarded the ‘Most Admired Service Provider in Financial Sector’ at the Banking, Financial Services & Insurance Awards.

Steel

Founded in 1945 as a Steel trading company, the company continue to blaze new trails in the Steel business, with a presence in specialty steel making, steel processing and trading. Mahindra Sanyo Steel (earlier known as MUSCO), a tripartite venture between Mahindra, Sanyo and Mitsui, Japan, are India’s leading maker of alloy and specialty steels. Mahindra Intertrade is India’s largest non-captive steel processor in the organized sector, catering to the needs of a variety of customers in the automotive, non-automotive and power industries.

Trucks & Buses

Indian highways are notorious for their rough terrain, unpredictable weather, and unpaved paths. So, the company build its trucks and buses in India, for India. Combined with European safety standards and state-of-the-art M-Power engines, its trucks and buses come in many shapes and sizes, but with an unchanging promise: the goods will be delivered.

Two Wheelers

From bringing back the iconic JAWA, to introducing the all-electric GenZe, Mahindra & Mahindra is working to enhance the two-wheeler experience for its customers. Since the inception of this industry in 2008, Mahindra & Mahindra has built a range of two-wheelers that offer distinctive styling, solid performance, great mileage and superior ride quality on tough Indian roads.

Vehicle & Equipment Finance

By offering Vehicle and Asset Finance to rural Indians, the company continue to empower millions of customers across the country. The company finance the purchase of new and pre-owned tractors, commercial vehicles, construction equipment and two wheelers, and also provide specialised assistance for hassle-free documentation and quick disbursal of loan amounts.

Global Presence

Mahindra & Mahindra has a business presence in 100+ countries with 49% revenue from outside india³

57 manufacturing facilities around the world

USA: R&D Facilities for Electric Mobility with GenZe, along with Automotive & Farm Technologies, Digitalisation, AI and IoT

UK: R&D Facilities for Digitalisation, Smart Cities and Electric Racing Technology

SPAIN: R&D Facilities for Electric Racing Technology

FRANCE: R&D Facilities for 2-Wheelers Technology

FINLAND: R&D Facilities for Harvester Technologies with Sampo-Rosenlew

TURKEY: R&D Facilities for Farm Mechanisation with Hisarlar & Erkunt

SOUTH KOREA: R&D Facilities for Automotive Technology with SsangYong

ITALY: R&D Facilities for Automotive Engineering & Design and Advanced EV Technologies with Pininfarina

INDIA: Automotive Engineering & Design, Connected Cars & Electric Vehicle Technology, Aerospace & Defence, Digitalisation, AI and IoT

AUSTRALIA: R&D Facilities for Aeroplanes

JAPAN: R&D Facilities for Rice Value Chain with Mitsubishi

Plant Locations in india

The company’s manufacturing facilities are located at Kandivali, Nashik, Igatpuri, Nagpur, Chakan, Zaheerabad, Jaipur, Rudrapur, Haridwar, Mohali and Pithampur.

Financials

12 June 2020 Mahindra & Mahindra Limited announced the financial results for the quarter and year ended 31st March 2020 of the Company and the consolidated Mahindra Group.⁴

Operating profits (PBT before EI) were Rs. 5,402 crores for F2020, down 23% from the previous year. These were affected due to the lower industry volumes in both automotive and tractor segments, transition to BS VI and the abrupt lockdown due to the COVID situation. Operating Margins were maintained at 14.2% even in this challenging environment. The Company generated operating cash of Rs. 3,946 crores. Market share for tractors increased 1% and auto LCV less than 3.5 ton share increased 1.2%, while auto PV share decreased by 0.8%. PAT after EI was primarily impacted due to write down of investment in Ssangyong and some other international subsidiaries. As announced earlier Mahindra Board had decided not to infuse any fresh capital into Ssangyong and is re-examining the business outlook of other International subsidiaries, in view of the current environment, to decide on future capital allocation.

Automotive industry performance for Q4 F2020 was a reversal in trend compared with from Q3 F2020, when some green shoots were seen in the economy and the consumer sentiment. In Q4 F2020, the Indian automotive industry (excluding 2W) posted a decline of 28.6%. This decline was driven by the continued slowdown in economy, the transition to BSVI from 1st April 2020 and concerns over the COVID-19 outbreak and ensuing lockdown for seven days in March 2020. The Commercial Vehicle (CV) industry posted a reduction of 48.3%, with the Heavy Commercial Vehicle (HCV) goods industry posting a decline of 66.4%. Even in such challenging circumstances the Company grew its market share in the less than 3.5 ton CV by 3.5% to 48.1% as compared to the corresponding quarter previous year.

In Q4 F2020, the domestic tractor industry witnessed a decline of 9% with sales of 1,46,313 tractors, against 1,60,836 tractors sold during Q4 F2019. After the continued slowdown in Q1 and Q2 F2020, the tractor industry started showing some green shoots from December 2019 onwards, with good growth in January & February of 5% and 21% respectively. Industry growth in December 2019 to February 2020 was a result of good Rabi outlook, supported by increased government spend in rural, along with better liquidity conditions in the market leading to improved sentiments in agri and rural economy. Similar momentum was expected in March 2020. However, the industry was adversely impacted in March because of the nationwide lockdown due to COVID-19 outbreak. The Company increased its market share in the domestic tractor market to 39.1% in Q4 F2020 a growth of 3.7% over corresponding quarter previous year and continued to maintain its operating margin.

A full summation of Gross Revenue and other income of all the group companies taken together for the year ended 31 st March 2020 is Rs. 137,334 crores (USD 19.4 billion)

Outlook:

The lockdowns to contain the spread of the coronavirus have curtailed both supply and demand. Added to this, a combination of lower incomes and heightened uncertainty has added to the drag on consumer spending and business investment.

To mitigate the economic impact of Coronavirus the Indian government has announced a Rs 20 trillion package comprising fiscal, monetary and regulatory measures, which should help put a floor under growth. The package enables more credit, guarantees and forbearances along with a medium-term reforms push. Importantly, the government has also begun allowing a gradual but cautious reopening of the economy, which should help business and economic activity improve going forward. As restrictions ease, and the economy at large, adapts to operating and living in a post-Covid era, it is expected that there will be a gradual recovery in the second half of the fiscal.

Even as restrictions are gradually lifted in phases, there will be a ramp up in production, supply chain and distribution from June onwards, which will aid economic activity. While the overall services and manufacturing sectors are likely to see a slower recovery, the agriculture/farm equipment sector will be relatively less impacted, aided by several positive factors such as record Rabi production, higher Government procurement, timely announcement of higher MSPs and outlook of a normal monsoon. One can expect a quicker recovery in rural India, as is evidend from tractor sales of the company in the month of May. The urban segment may take longer to come back to normalcy. Having said that, while the outlook is heavily contingent upon the intensity, duration and spread of the pandemic, a smooth normalisation and efficacy of policy measures will be the key to any recovery in F2021.

M&M Q3 profit jumps 40% to Rs 530 crore, beat estimates ⁵

February 05, 2021; Automobile and tractor company Mahindra & Mahindra (including Mahindra Vehicle Manufacturers) on February 5 reported a massive 39.6 percent year-on-year growth in profit at Rs 530 crore for the quarter ended December 2020.

The company had an exceptional loss of Rs 1,213.98 crore for the December quarter, representing impairment provisions for certain long-term assets and other exposures. The profit before exceptional loss stood at Rs 1,745 crore for the quarter.

Revenue from operations grew by 16 percent year-on-year to Rs 14,056.5 crore in Q3FY21, with strong tractor volumes.

The company sold 97,420 tractors in the domestic market in Q3FY21, registering a 20 percent growth over the corresponding period on robust rural story but automotive business sales fell 7 percent to 1,15,272 vehicles as some significant challenges do exist, especially on the supply side and commodity prices, M&M said.

Numbers were better than analysts' expectations. Profit (before exceptional loss) estimated at Rs 1,538 crore on revenue of Rs 13,754 crore for December quarter 2020, according to the average of estimates of analysts polled by CNBC-TV18.

At the operating level, its earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 33.4 percent to Rs 2,385.6 crore and margin expanded 220 bps to 17 percent compared to the corresponding quarter, driven by cost optimisation and operating leverage, which both were also above CNBC-TV18 poll estimates of Rs 2,263 crore and 16.4 percent respectively.

Revenue from its automotive business grew by 12 percent year-on-year to Rs 8,311 crore with its EBIT rising 13.4 percent and margin expanding 10 bps YoY, for the quarter ended December 2020.

Tractor business registered a 23.5 percent year-on-year growth in revenue at Rs 5,281 crore with its EBIT climbing 49 percent and margin rising 390 bps YoY.

"Growth momentum for the tractor industry was supported by positive sentiment in rural parts of the country, specifically the agri economy which is driven by  Very good monsoon (ii) Healthy reservoir levels (iii) record kharif production (iv) good rabi sowing (v) Continued high central government spending in agriculture and rural development," said the company.

On the back of these positive factors, it is expected that tractor demand will remain robust during the coming quarter as well, it said.

References

1. ^ https://www.mahindra.com/about-mahindra-company
2. ^ https://www.mahindra.com/mahindra-services-and-businesses
3. ^ https://www.bseindia.com/bseplus/AnnualReport/500520/5005200319.pdf
4. ^ https://www.mahindra.com/resources/investor-reports/FY20/Earnings%20Update/M-M-Q4FY20-and-full-year-Results-pack.pdf
5. ^ https://www.moneycontrol.com/news/business/earnings/mm-q3-profit-jumps-40-to-rs-530-crore-beat-estimates-6457341.html