Davos 2023: Mahindra Group's growth gems to touch billion-dollar mcap in 2-4 years, says MD & CEO Shah

Anish Shah, group's managing director and chief executive officer, told Moneycontrol that its 'growth gems' will be on course to be billion dollar entities on the stock market in the next two to four years.

Mahindra Group is looking at significant growth across multiple verticals this year. The Group's auto division Mahindra and Mahindra (M&M) posted robust growth last year given bestselling Sports Utility Vehicles like Thar, XUV7OO and the recently launched Scorpio-N.

Anish Shah, group's managing director and chief executive officer, told Moneycontrol that its 'growth gems' will be on course to be billion dollar entities on the stock market in the next two to four years.

Edited Excerpts:​

There is a lot of fragmentation in the world today, which is really the theme of Davos right now. So in various meetings with CEOs as well as in group sessions, the key themes that are emerging are:  The world is in a precarious position right now. Recession is something that is expected. And the question is, how bad it is going to be. So there is a note of cautiousness and a note of pessimism on that front as well.

India does stand out brightly. And a lot of folks are asking as to why is that the case? And I think we got some good answers to that. So the Indian economy is better poised at this place. And India also will stand to gain from the China plus one or Europe plus one (strategy), in terms of being the destination for the future. And that's where the optimism for India comes in.

So for us, 2021 was a year of capital allocation.2022 was the pivot to growth. And our businesses actually have been growing well, very well positioned right now. 2023 for us as a year of scale-up. We're looking at significant growth across the businesses, creating a stronger foundation for growth beyond 2023 as well. And I do feel that it should be a good year, we're optimistic at the start of the year.

So all the credit goes to our teams. We've got some fantastic leaders, and the leaders and their teams have rallied to come out of a difficult time. Beyond the challenges we had from loss-making entities, we had to face various supply chain constraints. We had to face various other challenges that COVID and the global economy brought up. And our leaders have just done a fantastic job. So to me, all the credit goes to them. And that's the reason why the positions are so well placed today.

Also watch Davos 2023: Expect 25% EV penetration in 5 years, focus is to meet demand in India - Mahindra group CEO Anish Shah

The way we look at it, we've succeeded in India, with the vehicles we have against all the global majors. And if you look at the numbers that we've achieved in terms of bookings in the last three (launches) that we've had (such as) 50,000 (units) in three days for the Thar, 50,000 (units) in three days, and three hours for the XUV7OO, one lakh (units) in 30 minutes for the Scorpio (N). And we've seen amazing response from consumers. If we can do that in India with all the global majors, why can we not do that in markets around the world? So we will have a strong global strategy. At this stage, we are focused on meeting the demand in India (for which) we are doubling our capacity. And once that's behind us, then we will look at global (markets) more aggressively.

Yes, we see EVs really taking off. In the next five years, we would expect about 25 percent penetration of EVs for our (total sales of) vehicles at least. And then beyond that the inflection (point) will depend on charging time, which will then drive infrastructure.

We see headroom for growth in all our businesses today. Auto is on a great momentum. And even with that momentum, there's just significant headroom for growth there.  Tractor business continues to do very well. Farm machinery is a huge growth area for us. Microfinance is on a very strong turnaround path, and a number of initiatives that have been put in place are starting to see results on that front. Tech Mahindra has done well on a number of areas. Margins is one area that we do need to address and the team is looking at that and finding ways to address it. Beyond that, our growth gems are on track to achieve a billion dollars in market cap in the next two to four years. So we've got a lot going for us at this point.

So we haven't set timelines right now.  A lot will depend on the markets at that time. The growth in this businesses. The one that I will highlight is (Mahindra) Susten, which is a solar business. We brought in a marquee global investor in Ontario Teachers, and with them we will grow the business fivefold in the next five years. And that puts the business on a very strong path for an IPO.

I would just say more of the same. We had excellent budgets over the last few years. They have been growth oriented budgets for the economy. And that's what we expect this time as well.