RISE TO CREATE VALUE 23 Strategic Imperatives The Farm segment at Mahindra aims to deliver substantial scale through focused strategic actions: Product Launches and Channel Expansion The farm division plans to launch new products and expand its distribution channels to strengthen its market position. Scaling Farm Machinery Exponentially Recognising the high potential of the farm machinery segment, the Farm Division intends to scale this segment manifold by F26 (versus F22). Growing International Business 1.6X by F26, focusing on key markets and leveraging Centers of Excellence in Turkey, Finland, and Japan. Pioneering Technology Leadership By investing in cutting-edge technologies and fostering strategic partnerships, we seek to maintain our leadership in farm technology and introduce innovative solutions to the market. Key Highlights Ÿ Revenue CAGR of 10.5% since F21. Ÿ Successful launch of OJA, Target and Naya Swaraj tractors; 3.4% MS gain in last 3 years. Ÿ Scaling up of IO operations: OJA US launch, SEA regional office, Europe entry in CY25. Ÿ Launched India's first intelligent harvester & >50K tractors with telematic kits deployed. Ÿ RoCE at 47% for F24. Achievements in F24 Ÿ Farm has been resilient in a declining industry and has gained market share of 40 bps to 41.6%. We have been able to retain the position of market leader for the 41 consecutive year. Ÿ Farm machinery has grown by 32% despite rural slowdown. The growth was driven by record performance in rotary tillers where we are #2 from being non existent just 3 years back. With pick up in rural economy the segment is expected to cross 30%+ growth rate. UNLOCKING FULL POTENTIAL Mahindra Finance and Tech Mahindra represent sizeable businesses with significant potential to unlock value. Both of these businesses have unique strengths which should allow them to be leaders in the segments they operate in. In the past couple of years, both businesses have underperformed versus peers due to various operational reasons. We have been executing a plan to achieve leadership position in these businesses which should unlock significant value. For Mahindra Finance, growth has been robust, however, asset quality had been uneven especially during the COVID years. The endeavour in the business is to lead in Stable and High Asset quality even as it achieves diversification into attractive segments of the financial services landscape. Mahindra Finance is also cultivating strategic partnerships to gain share in fee based products and services. The business is investing heavily in digitising its customer facing as well as internal processes as it continues to serve the increasingly tech savvy emerging India. Tech Mahindra has underperformed versus peers on margins even as the industry has been faced with headwinds from global slowdown. With Industry expected to see some recovery in the coming year, Tech Mahindra will focus on accelerating new age offerings and augment deep tech. As it works to strengthen its revenue streams, it has already embarked on a large scale transformation of its organisation and processes to significantly enhance its ability to deliver world class margins. 2 MAHINDRA FINANCE Mahindra Finance (MMFSL) has been making steady progress in its strategy, witnessing 40% increase in Market Cap since F21. The company's focus on asset quality has paid dividends. In F24, Mahindra Finance achieved steady improvement in its Gross Stage 3 assets achieving a record low 3.4% by year end even as it crossed 1 lakh Crore Assets Under Management. With the positive outlook for the Indian financial sector, driven by economic growth, increasing financial inclusion, and digital transformation, MMFSL is well-poised to unlock its full potential. st th Movement from 31 March, 2021 to 28 March, 2024
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