Factors that will significantly impact demand for automobiles in FY 2024-25 are: Policies by the Government to boost consumption. Aggressive Government push for infrastructure-led growth. Increase in cost of ownership due to increase in commodity and fuel prices. The Government budget on infrastructure and rural development is likely to benefit commercial demand. Further, the demand for mechanisation is also growing on account of likely increase in labour cost owing to a shortage of agricultural labour. Several enabling factors supporting industry growth like increasing cropping intensity, diversification, institutional credit, consolidation of farm holdings by FPOs, etc. have shown a positive trend in the last few years. Increase in leasing of land from 10% in early 2000s to 17% in FY 2018-19 and the Government subsidy for mechanisation will increase mechanisation coverage amongst small farmers. An increasing trend of more farmers taking technical advice in agriculture, also reflects the growth of progressive farmers. High international commodity prices and logistic disruptions may aggravate input costs leading to inflation. Quantitatively, the southwest monsoon seasonal rainfall over the country as a whole is likely to be 106% of the long period average (LPA) with a model error of ± 4%. Thus, above-normal rainfall is most likely over the country as a whole during the monsoon season (June to September, 2024). Coupled with timely arrival of southwest monsoon in Kerala and northeastern states, this has improved the on-ground sentiments of farmers. Land preparation activities for Kharif crops are expected to begin on time, which are likely to boost tractor demand in coming months. TRACTOR AND FARM EQUIPMENT BUSINESS The mid to long term outlook for the Indian tractor industry is positive. The industry is expected to see an upswing this year with the expectations of above normal monsoon. Positivity in farm sentiments were evident with higher summer acreage recorded this year. Also, the hike in MSP by 6% YoY will further incentivise farmers. Kharif sowing is expected to begin on time, which is likely to boost tractor demand in the coming months. STRATEGY AUTOMOTIVE SECTOR Your Company has been firing on all cylinders, moving from strength to strength this year. We reinforced our place as the #1 SUV player by revenue-share in the Indian market and are now the #2 Passenger Vehicle manufacturer by revenue. Mahindra LCVs and electric 3-wheelers dominate their respective segments with #1 market share and our Trucks and Buses business grew 15X faster than the industry. External investors continue to show faith in our EV vision. The Last Mile Mobility business entered into agreements to raise Rs. 1,000 crores at a valuation of over Rs. 6,000 crores from two external investors, International Finance Corporation and India-Japan Fund (a fund managed by National Investment and Infrastructure Fund Limited). We added another marquee investor, Temasek, in Mahindra Electric Automobile Limited (MEAL) for an investment of Rs. 1,200 crores (in addition to the previous investment from British International Investment Plc) at a valuation of up to Rs. 80,580 crores. We made heads turn at our Cape Town event where we revealed the future Lifestyle Global Pickup and the stunning Thar.e concept. Bringing these concepts to life is the diverse and talented workforce at Mahindra Research Valley, our flagship R&D and innovation centre. MRV continues making strides in cutting-edge areas such as EVs, Software Defined Vehicle, Digital Platforms and more with 612 patents granted. MAHINDRA & MAHINDRA LTD. Integrated Annual Report 2023-24 160
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