Mahindra lines up major investments for next 3 yrs
Despite visible signs of economic slowdown in the country, diversified business conglomerate Mahindra & Mahindra has lined up major investments for the next three years. The Mumbai-based group is looking to invest over Rs 10,000 crore which will be funneled into a new automobile plant, R&D and a host of other expansion activities. In addition, the group has also earmarked Rs 500 crore for truck and buses business.
To infuse Rs 500-crore into trucking biz, plans new automobile plant as a part of its Rs 10,000-cr outlay
Hyderabad: Despite visible signs of economic slowdown in the country, diversified business conglomerate Mahindra & Mahindra has lined up major investments for the next three years. The Mumbai-based group is looking to invest over Rs 10,000 crore which will be funneled into a new automobile plant, R&D and a host of other expansion activities. In addition, the group has also earmarked Rs 500 crore for truck and buses business.
"We are bullish about our future and will continue on our path of investing in that future. We are planning Rs 10,000 crore investment in the next three years, including a new auto plant," Anand Mahindra, Chairman and Managing Director, M&M, had announced at the company's 67th annual general meeting (AGM).
The Mahindra group chief is confident that these mega investments will pay rich dividends in future. "Our past experience suggests this will pay dividends. In 2008, when the economy was slowing down, M&M was one of the few companies that continued to invest; and that investment is one of the major reasons why we significantly outperformed the industry over the last two financial years,” he explained.
Reiterating that Mahindra group would go ahead with its investments despite the difficult situation in the country, he said that the investments would not only go into capacity building, but also into research and development. "We will invest with an even greater focus on the frugality and efficiency of that investment. Mahindra Group well prepared to take on a challenging environment," he added.
Mahindra, who blamed rising fuel costs, weakening rupee and high inflationary pressures for sluggish economic growth, warned that the country would go back of the Hindu rate of growth if these issues were not tackled immediately. “Country is today facing a serious economic crisis. All these burning issues have to be tackled if we are to regain our growth trajectory," he said.
Though the falling rupee is a major macroeconomic concern, it has its bright side for Mahindra. “It works to the benefit of our IT business and exports, be they auto, tractors or 2 wheelers. Its advantages can be reaped by our holiday business, as more and more Indians choose to holiday in India rather than abroad. The falling rupee will attract NRI investment in our real estate business,” Mahindra maintained.
Meanwhile, Mahindra, as a part of its efforts to turn trucks and buses business into profitable venture, has decided to merge these operations with itself. At present, the company’s subsidiary Mahindra Trucks and Buses is carrying out these loss-making operations.
"Our company has placed a long-term bet on our truck and buses business. The company’s board has earmarked new investments for this business, besides giving free hand to turn around this business in three years,” said Pawan Goenka, president, automotive & farm equipment sector, Mahindra.
The company is investing Rs 500 crore into the business. Of this, Rs 200 crore will be utilized for strengthening the existing products, while the remaining amount will be used for entering into new segments such as intermediate and medium duty truck space.
(With inputs from PTI)