Bharatendu Kapoor, senior vice president- Sales, Farm Division, Mahindra & Mahindra is confident that the company will grow better than the industry in the next quarter. Speaking to CNBC-TV18, Kapoor says the tractor manufacturer will hold on to its 42 percent market share in the segment.
On the road ahead, Kapoor says a rise in raw material cost has led to a Rs 4000 hike in prices since January and the company is seeing some signs of revival in Karnataka.
Also read: M&M sells 75,000 units of XUV500 in 2 yearsBelow is the edited transcript of Kapoor’s interview to CNBC-TV18.
Q: Take us through the sales number for last month, was it in-line with industry or did you manage to exceed industry growth?
A: We are happy with our performance for December and year till date. The industry has grown by about 13 percent and we have grown by about 19 percent. We have sold 16,257 tractors in the domestic market and we are happy because we are a bit better than the industry.
Q: For the nine months FY14 so far, the domestic tractor sales have risen by a whopping 24 percent, are you likely to close this entire fiscal year with 24-25 percent growth?
A: Industry has also grown by 20 percent and our growth is about 24 percent. We expect that in Q4, the growth will be little moderated. It will be around 10-12 percent. So, overall for the year we are looking at industry growth of 15-17 percent and our growth should be better than the industry growth.
Q: What would your market share now go up to, it is already inched up close to 36 percent, do you have any internal targets for the next two quarters or so?
A: I would not like to talk about the targets but all I want to share with you is that we are at 42 percent market share at present, which is fairly significantly a large market share and we would like to hold on to this market share.
Q: Could you tell us what the margins are in the domestic tractor business?
A: I would not like to comment on the margins but tractor industry is a fairly good margin industry with respect to the automotive industry but in terms of percentage I would like to hold on to my comments.
Q: Any plans to raise tractor prices?
A: We did increase our prices in the month of April and then followed by another increase in the month of July on select models. Our last increase happened in the month of October by Rs 3,500. Since the material cost has gone up and in the month of January we have increased our prices by Rs 4,000 on an average on tractors.
Q: We understand that the south as well as the western regions are reviving very strongly and both of them are quite critical for Mahindra & Mahindra (M&M) because you all have quite a bit of a market share, are you expecting growth to pick up in south and Western more than what it has been?
A: Yes, we see the growth happening in Andhra Pradesh and Maharashtra markets, which were quite down last year. There was a negative growth. So, Andhra and Maharashtra have definitely revived. There are signs of revival in Karnataka. We are still worried about Tamil Nadu market, which has still not come back to our expectations. However, we see that January onwards, there are some positive signs and this market also should start reviving now.
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