M&M - Will this Juggernaut Continue ? Let's look at growth engines from their Annual Report FY 22
7 Key Takeaways !!! Thread🧵Let's go...
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Disclaimer: Personal blog and not a reco. Kindly consult your financial advisor before any investment decisions
7 Key Takeaways !!! Thread🧵Let's go...
Don't Forget to ReTweet !
Disclaimer: Personal blog and not a reco. Kindly consult your financial advisor before any investment decisions
(1/N) - Reigniting value creation:
The company’s financial performance had taken a hit in the last few years because of the losses in the international subsidiaries resulting in the ROE of the consolidated entity going down to 4.4% in F21. THEY EXITED These BUSINESSES.
The company’s financial performance had taken a hit in the last few years because of the losses in the international subsidiaries resulting in the ROE of the consolidated entity going down to 4.4% in F21. THEY EXITED These BUSINESSES.
Now ROE in FY-22 is around 14%. ROE for last 3 consecutive quarter ~18%
(2/N) PV & Utility Vehicle revamp:
Mahindra’s passenger vehicle has undergone a significant transformation in the last few years. Intense focus on innovation/R&D. Launch of new products like XUV 700, Thar, Balero at competitive price points.
Mahindra’s passenger vehicle has undergone a significant transformation in the last few years. Intense focus on innovation/R&D. Launch of new products like XUV 700, Thar, Balero at competitive price points.
Increasing the share of SUVs in the PV segment too has helped M&M increase its market share in PV from 5.8% to 7.4%.
(3/N) 3. Leverage SUV culture: To further strengthen its SUV legacy the company plans on launching 13 new products in SUV by 2027.
(4/N) Sales Promotions:
Though Mahindra continues to be the second largest commercial vehicle company in India with a domestic market share of 25.1%, in Medium High Commercial Vehicle (MHCV) company has a meagre market share of 2%.
Though Mahindra continues to be the second largest commercial vehicle company in India with a domestic market share of 25.1%, in Medium High Commercial Vehicle (MHCV) company has a meagre market share of 2%.
To gain confidence in this segment they are turning to promotions like ‘Get more mileage or give the truck back’, ‘Get back on the road in 48 hours or get 1000/day’ and ’36 hours turnaround at our dealership or you get Rs.3000 per day'.
(5/N)
Headwinds in Tractors/Farm Equipment ?
In F22 company recorded the highest ever total tractor volume of 3.5L+ units. While there was degrowth in the domestic sales by 2% vs the industry degrowth of 6.4% the company grew its volume with the help of increasing exports.
Headwinds in Tractors/Farm Equipment ?
In F22 company recorded the highest ever total tractor volume of 3.5L+ units. While there was degrowth in the domestic sales by 2% vs the industry degrowth of 6.4% the company grew its volume with the help of increasing exports.
For the tractor segment, the company does warn of strong cyclicality where 3-4 years of growth will be followed by a slowdown.
(6/N)
6. Synergies & Focussed Pivoting: Mahindra has also forayed into farming as a service business branded as ‘Krishe’. ‘Krish-e’ aims to increase farmers' income by providing a range of services centred around mechanization and advisory.
6. Synergies & Focussed Pivoting: Mahindra has also forayed into farming as a service business branded as ‘Krishe’. ‘Krish-e’ aims to increase farmers' income by providing a range of services centred around mechanization and advisory.
This digital venture will help the farm equipment business of Mahindra as the Krish-e centres which are present in 16 states host a range of farm equipment which are made available to farmers on a rental basis.
These centres also try to trigger changes in farmer behaviour by on-ground advisory and rental solutions deployed on the demonstration plots which help in winning farmers’ trust in mechanization in agriculture.
(7/N) 7. Electrification of Portfolio: : Out of the 13 SUVs which Mahindra is going to launch in the next 5 years, 8 of them are going to be electric. They expect these EV SUVs to contribute 20% of their total volume.
In the short term in EV, their immediate focus is on last-mile delivery since the market is ripe for scaling up, as a result, they have been aggressive only in the three-wheelers space resulting in a market share of 73.4% in the electric three-wheeler market.
To further strengthen their electric three-wheeler segment, they have partnered with different e-commerce and
logistics companies like Flipkart, Amazon, Mahindra logistics etc for the expansion of their carbon-free fleet of delivery vehicles.
logistics companies like Flipkart, Amazon, Mahindra logistics etc for the expansion of their carbon-free fleet of delivery vehicles.
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