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Sep 04, 2013, 01.34 PM IST | Source: PTI

Mahindra and Mahindra to invest Rs 10,000 crore on capex

On the sidelines of the annual convention of SIAM, Mahindra and Mahindra President (Automotive and Farm Equipment) said that the company planned to invest Rs 10,000 crore over three years on capital expansion.

Mahindra and Mahindra today said it will invest Rs 10,000 crore in the next three years on capex and launching new products.

The company is scouting for locations, including options outside its Chakan plant in Maharashtra, to set up its new plant to manufacture new products and will take final decision within this fiscal.

Also read: 3% SUV tax hit sales, see revival in diwali, dussehra: M&M

"In the next three years we are investing Rs 10,000 crore out of which Rs 7,500 crore are for capex on automotive and farm equipment and another Rs 2,500 crore investment will be on group companies,"  Pawan Goenka, President (Automotive and Farm Equipment), Mahindra and Mahindra told reporters on the sidelines of the annual convention of Society of Indian Automobile Manufacturers (SIAM).

As part of overall capex, the company is developing two-three new platforms for brand new products which will hit the market around FY 2016.

"These new products will be rolled out from completely new plant. Location for which will decided within this fiscal," Goneka said.

The company is still in discussion with the Maharashtra government. Earlier, the company had decided to put on hold all investment at its Chakan plant due to VAT refund issues with Maharashtra Government.

Elaborating on new products, he said: "Out of the two platforms, one will be led by Mahindra and Mahindra and its Korean subsidiary Sangyong will also have a vehicle on the platform. The other platform will be led by Sangyong and Mahindra and Mahindra will have a vehicle on the platform."

The company is also working on six new engines out of which three be from Mahindra and Mahindra and three from Sangyong. Mahindra and Mahindra is also working on smaller engines with higher power, Goneka said.

When asked about the sales expectations in the coming festive season, Goneka said: "The company expects sales to be better than July and August this year but less than last festive season as market is in difficult situation." He, however, ruled out any price hike saying the company has not been impacted much (by rupee depreciation) due to high localised components.

In August, Mahindra & Mahindra reported 17.32 percent decline in its total sales at 37,897 units while in July, sales declined by 21.17 percent at 37,096 units.

Watch Pawan Goenka speaking on capex plans.

M&M stock price

On October 01, 2014, Mahindra and Mahindra closed at Rs 1390.55, up Rs 28.25, or 2.07 percent. The 52-week high of the share was Rs 1421.00 and the 52-week low was Rs 833.90.


The company's trailing 12-month (TTM) EPS was at Rs 59.61 per share as per the quarter ended June 2014. The stock's price-to-earnings (P/E) ratio was 23.33. The latest book value of the company is Rs 270.60 per share. At current value, the price-to-book value of the company is 5.14.

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