Mahindra & Mahindra's rural business portfolio may be impacted by low monsoons this year, that's the word coming in from Group CFO and CIO VS Parthasarathy from the sidelines of the 9th edition of the CII CFO summit.
Furthermore, he believes India is on the right track on ease of doing business and says things are slowly improving.
Below is the edited transcript of the interview.
Q: How is India faring on ease of doing business?
Ease of doing business has always been one of the hallmarks in whatever industry that we have been in. It is slowly improving, it is slowly getting better that is how I would like to put it. There are some steps taken, I would like to welcome many more steps in order to do that. We are seeing that clarity is coming in most of the things.
However, you also must take into account the other part which is now new Companies Act comes.
New Companies Act is bringing in complexity in the sense that nothing is given right now. There are no precedence, so that brings in a little bit but that is good for the long-term vision. So, I see that has an evolution process, some things have becoming easier some things are getting easier and we are in the right path.
Q: Mahindra has two of the core companies that are really impacted by the growth of the economy or auto as well as financial services. In both of those are you beginning to see growth? First if we could talk about auto?
A: In both these things I will very quickly say the rural is starting to come off in terms of block but the monsoon is taking its negative impact so I think in balance it is still paused and poised. We will wait for the festive season to see how far and how fast it takes off. However, I have no doubts sooner than later it will take off.
Q: Given how the monsoons have panned out so far and whatever you know are you expecting a bumper season this festive season or do you think it will be more subdued?
A: As a CFO I always hope for the best but prepared in all cases.
Q: Tech Mahindra has also got payments bank license. What is the plan there? Are you exploring tie-ups right now by when will you finalise them?
A: The tie-ups are already in place. Tech Mahindra along with Mahindra Finance, one with rural reach and the other with technology have come together. So, we have all we need and we are set to go.
Q: You won’t be looking at further tie-up with any banks?
A: That is something Tech Mahindra management and the Tech Mahindra leadership should come in and not me. However, they have got between the jugalbandi of Tech Mahindra and Mahindra Finance. They are at ad aptly represented I suppose in that space.
Q: What are the capex plans for the group this year? Will they be higher than the last year?
A: We have talked about a capex of about Rs 10,000 crore for the next three years – capex plus investment that is what Mahindra & Mahindra has spoken. We don’t change capex plans based on how one season behaves. This is long-term commitments and we are committed to Make in India, digitalising India and being in India and prospering.
Q: How much of that Rs 10,000 crore you have already raised in this fiscal?
A: We don’t need to raise; there is enough profits and cash flows that is there. We can manage most of the money in-house. However, when we need to do it, we have got AAA rating from four agencies so we should be able to raise it in jiffy.
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