MAHINDRA & MAHINDRA LTD. | Integrated Annual Report 2021-22

For F23, while your Company will take all steps to mitigate risks from the COVID-19 crisis, the increase in prices of certain commodities is likely to have an adverse impact on material cost in the rst half of the nancial year. However, the Company does expect prices of commodities to soften in the second half of the year with supply side constraints easing, limiting the impact. Your Company will continue to work on mitigating the inationary impacts through cost re-engineering and value engineering activities. Capacity Your Company has built adequatemanufacturing capacity for the immediate future and is in the process of investing in additional capacity as part of its mid to long-term strategy for its FarmEquipment Sector. Swaraj Division has invested in creating additional manufacturing capacity by settingup a newmanufacturingplant inMohali. Similarly, the Company expects that the market for farm equipment will only expand in the future. The Company is setting up a dedicated new plant at Pithampur where it plans to produce rice transplanters, potato planters and harvesters. The Company is investing Rs. 200 crores with its suppliers to set up this plant in the region. The Company is working closely with its key suppliers to minimise any supply constraints through proactive capacity planning and longer-term contracts. At the same time, opportunities for global sourcing are also being actively pursued. OUTLOOK - AUTOMOTIVE AND FARM SECTORS Both the Automotive and Farm Sectors strive to sustain protable growth, maintain leadership position in the domestic market and at the same time, explore global opportunities for growth. Simultaneously, your Company continues its focus on achieving cost leadership through focussed cost optimisation, productivity improvements, value engineering, supply chain management, and exploiting synergies between various group businesses. Automotive Business In F22, rst half was inuenced by pandemic but posted growth on low base in F21. H2-F22 has seen good recovery in economic condition but supply was restricted by shortage of semiconductors. Sharp increase in commodity prices has led around 9% average price increase in last one year. Fuel prices also touched 3 digit mark on account of Russia-Ukraine war. These had impact on cost of ownership for 2Wand PVwhile commercial vehicles margins impacted on low freight rates. As per the Automotive Mission Plan 2026 (AMP 2026) the mid to long-term outlook for the Indian auto industry is positive. Hon'ble Prime Minister unveiled Indian Auto Industry Vision @ 100 mentioning Auto Industry is the engine of economic growth. COMPANY OVERVIEW BOARD’S REPORT MANAGEMENT DISCUSSION AND ANALYSIS CORPORATE GOVERNANCE BUSINESS RESPONSIBILITY REPORT STANDALONE ACCOUNTS CONSOLIDATED ACCOUNTS 122