M&M Open To More Marquee Investors In E-Mobility Arm

Mobility Outlook Bureau
04 Aug 2023
05:49 PM
2 Min Read

With British International Investment and Temasek already on board, the company believes its electric arm, MEAL, is well poised to take the growth story forward.


Dr Anish Shah, MD and CEO, Mahindra & Mahindra, has said that the company is hesitant to dilute its stake in Mahindra Electric Automobile (MEAL). He made these comments at a press conference for the first quarter results in Mumbai on Friday.

Dr Shah said M&M has enough cash flow to fund the electric mobility arm. Temasek had recently decided to invest INR 1,200 crore in MEAL which had increased the valuation of the EV subsidiary by 15% from INR 70,070 crore to INR 80,580 crore.

British International Investment had earlier announced a binding agreement to invest up to INR 3,850 crore in MEAL. Dr Shah said these were marquee investors who would add value to the electric mobility arm going forward.

Going forward, another such big brand investor might come on board too. The investment earmarked for MEAL is INR 10,000 crore by 2027.

Whilst on electric, M&M is also open to teaming up with other OEMs. In August last year, it had announced a partnership with Volkswagen for sourcing electric parts in its new electric platform, INGLO. Dr Shah said the alliance could go beyond just the cells.

Over the last three years, M&M has introduced back-to-back blockbuster products which have led to waiting periods ranging from eight months to over 1.5 years depending on the model. The semiconductor shortage did not help the cause either.

Things have, however, improved lately, said Rajesh Jejurikar, Executive Director & CEO (Auto and Farm Sectors). According to him, chip supplies have improved and production has increased to 39,000 units a month with plans to ramp it up further to 49,000 units by the last quarter of this fiscal.

Consequently, less than 5,000 units of its SUVs and 2,000 units of its pickups have now been impacted by the short-term disruption in engine-related parts at the suppliers’ end and semiconductor constraints.

In the first quarter of this fiscal, M&M was able to produce over one lakh units of its SUVs, up from 42,570 units and 75,420 units in Q1 ’22 and Q1 ’23 respectively. Open bookings for its SUV range now stand at 281,000 with the Scorpio leading the way with 117,000. Jejurikar said the company was also looking at other fuel options like CNG and flex fuel beyond electric.

Buoyant Quarter

M&M, incidentally, announced its best ever sales in the auto division for the April-June quarter with 186,000 units. Consolidated revenues were up 19% YoY at INR 33,892 crore while profit after tax was INR 3,508 crore. The auto division reported growth of 27% in revenues to 16,999 crore in Q1FY24, while the farm division posted revenue growth of 9% YoY to INR 9,710 crore. This was despite a fall in volumes by 3% to 114,000 units.

Dr Shah said the auto and farm businesses delivered strong performance with the former strengthening its market leadership position and doubling operating profit. Farm, on the other hand, continues to increase market share quarter on quarter and deliver double-digit profit improvements.

Jejurikar said in SUVs, M&M continues to be the leader in revenue market share for the sixth consecutive quarter with volumes crossing the one lakh milestone. In the tractor business, the market share is 42.9%, the highest since Q2 F20. “Our E-3W business continued market leadership with 65.5% market share,” he added.

Manoj Bhat, Group Chief Financial Officer, said the consolidated results reflect the robust performance of the company’s multiple businesses. “We have also realised the benefits of value creation through our capital allocation actions. Our market leadership position in our automotive and farm businesses have helped us realise operating margin benefits,” he added.

Also Read

Mahindra Regains Its Mojo In SUVs, Eyes New Frontiers

Share This Page