Mahindra and Mahindra

M&M chalks out capex plan of about Rs 800 crore

Source: IRIS Exclusive (12 June 2006)

Mahindra & Mahindra (M&M) plans to invest Rs. 700 - 800 crores per year in the next three years. The money will be invested in capacity enhancement, new product development and developing technological capabilities. The company has vision of achieving USD 1 billion sales. Although one of the key areas of concern happens to be rising fuel prices, the company is confident of sustaining growth, thanks to its diesel based offerings.

`We will continue to dominate India`s MUV segment`said Prabal Banerji, Vice President Mahindra & Mahindra Ltd. speaking at the India Equity Show organised by Myiris.com in association with ICICI Direct.

The Mahindra & Mahindra Ltd, flagship company of the USD 2.9 billion Mahindra Group, has posted net sales of Rs. 8000 crore on standalone basis. Prabal attributed the rise in PAT to the company`s extremely efficient tax planning. The company also boasts of cash surplus of Rs. 2100 crore.

Scorpio, which was launched four years back, still continues to be star performer of Mahindras. South Africa happens to be a strategic location from company`s future perspective as within six months of its launch, the new variant of Scorpio became a market leader there, says Banerji. Mahindra is the fourth largest automotive company is India whose exports have grown six times in last three years.

He added that the future growth drivers of this sector would be the GDP growth, emphasis on infrastructure, increase in disposable income and availability of low-cost finance. Though Tata Ace has slightly eroded the company’s market share, they remain optimistic. ``We welcome competition. Healthy competition is good and gives us opportunities to do better`` said Banerji, commenting on the success mantra of Mahindra since past 60 years in the segment.

As on 12 June,2006, stock trades at 19.37x FY06EPS of 28.76. 52wk high-719, 52 wk low-265.58. Latest div yield 2.33%.
 
Top