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Mahindra and Mahindra Limited
Presented by:Ms Divya HandaGandharva GuptaJohn Jacob Pranav NagpurkarMs Rashmi ShreeSagar ThuthejaShazer Askari
Content
Market Overview Mahindra and Mahindra
History Product Line Marketing & Business Strategy Financial CSR Initiatives
Growth drivers for theIndian automotive industry
Contemporary products
Shorter life cycle
Growth in Income levels
Easier financing
Government Policies
New productlaunches
Indian Automotive Industry
Increasing consumer
demand
Cost Competitiveness
Overall economic growth
Lower duties & taxes
Export Competitiveness
Reduced cost to consumer
India emerging as a manufacturing hub
Players: Indian auto industry
Global OEM
Indian OEM
Indian Suppliers
Global Suppliers
Engineering &
Development Companies
Indian Auto
Industry
Global OEMGM Toyota Ford Hyundai HondaSkodaVolvoMercedes
Indian OEMTata MotorsMahindra & MahindraBajaj AutoTVS MotorsHero HondaBajaj TempoAshok LeylandGlobal SuppliersDelphiVisteonBoschDensoThyssen Krupp
Indian Automotive Industry The industry has grown at a CAGR of
14% p.a over the last 5 years With potential to emerge as one of the
largest in the world. Presently, India is 2nd largest two wheeler market in the world 4th largest commercial vehicle market in the
world 11th largest passenger car in the world and is
expected to be the 7th largest market by 2016 The industry has emerged as a key
contributor to the Indian economy
MILESTONES OF M&M
M&M established its business connections in the USA through Mahindra Wallace.
It started steel trading on behalf of European suppliers
M&M was converted into a public limited company on June 15,1955
Machine Tools division was started.
Contd... Mahindra Engineering & Chemical
Products Ltd. (MECP) was formed.
M&M became the market leader in the Indian tractor segment-1983
Mahindra British Telecom (MBT) was formed as a joint venture with British Telecommunication plc (BT), UK-1986
MISSION & VISION “We don’t have a group-wide mission
statement. Our core purpose is what makes all of us want to get up and come to work in the morning” -Anand Mahindra
Indians are second to none in the world. The founders of our nation and of our company passionately believed this. We will prove them right by believing in ourselves and by making M&M Ltd. known worldwide for the quality of its product and services.
CORE BUSINESS ACTIVITIES
Automotive Farm Equipment Trade & Financial Services Infrastructure Development Information Technology Systech Specialty Businesses
BUSINESS STRATEGIES
Restructuring of the company. E-business Initiatives Joint ventures. Foreign competition.
MARKETING STRATEGIES
USP – ruggedness and performance. Products that redefined the market. Network of dealers, sales offices, service
stations etc. Strong market base in the urban and
semi-urban areas.
Current Financial Health August Sales
Total sales grew by over 30% over the corresponding period last year.
Domestic sales grew by 34% but exports declined by 21%
Q1 FY2008 results M&M results:
Gross revenue grew by over 16%PAT grew by 14%
Group results:
Gross revenue grew by over 40% while PBT grew by over 11%
Sector Performance
Outgrew industry in UV sectorRegistered a growth of 23.6% vs. industry
8.9% Commands an UV market share of 50%
as compared to 43.7% in the same period previous year.
Scorpio volumes grew by 16%, Bolero volumes grew by 35%
Contd...
Large 3-wheeler segment industry volumes declined by 46%. M&M arrested slowdown to 37%, market share of 53%
Small 3-wheeler segment growth of 74% and market share of 18%
Exports grew by 83% over the corresponding period last year.
Important FinancialsParticulars FY 2006 FY 2007 % variance
Sales Income 9,347 11,363 21.56
Expenditure 8,380 10,100 20.5
Gross Profit 1089 1525 40
PAT 857 1068 24.65
GPM% 10.54 11.71 1.17
Money figures in Rs. crore
Important Financials
Mahindra scrip trading at Rs 715 per share EPS of 39.33 P/E ratio of 18.22 Market capitalization of Rs 17,431 crores Slow down expected on blue-chip auto
stocks due to increase on interest on auto loans and prices have gone up due to increase in raw material like steel, rubber, etc.
Key Investments
Production plant in Chennai Signed MOU with Renault-Nissan M&M holds 50% stake, the rest is shared
between Renault and Nissan. Earmarked $908 million for investment Expected to begin production in early 2009. Installed capacity of 400,000 units
Contd...
Acquisition of 67.9% stake in Jeco Holdings of Germany Jeco has production capacity of 100,000
tonnes of forged components across its 3 plants.
Jeco manufactures forgings for gear boxes, engines, axle parts, hubs, gears and piston heads.
CSR
“CSR has always been an integral part of M&M group’s vision and the corner stone of our core value of good corporate citizenship”
– Keshub Mahindra Education Environment Health
FUTURE PLANS
Plans to enter US market. Expand operations in Germany New plant Mahindra Axe Marketing JV with Nissan
CONCLUSION Performance.
Both domestically and overseas Ability to deliver as per consumer demands JV in non expertise segments
Potential in the market CAGR 19% Potential buyers (300 million+ middle class)
Past performance and potential in the market implies the expected growth of the company
References
www.mahindra.com www.wikipedia.com www.icfai.com www.indiatimes.com Strategy and Business (June 07) The Hindu Auto India
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