Anish Shah, Group CEO & MD, Mahindra Group, says what is helping the company stay ahead of the industry is a function of the products that they have tried to develop products which are not only the best in their segment but compete with maybe even a couple of segments above that. They are very distinctive and that is the reason Mahindra sees a very high level of demand across multiple products that we have launched over the last few years.

Shah says from where it is right now, they are again looking at a 4X or 5X growth after having done that already.

The impression all of us have is that the auto industry is going through a slowdown. There are problems, there are discounts, but you are growing when others are slowing down. Why is that? It is a good problem to have, but why is that?

Anish Shah: I would give all the credit to our associates. There has been a lot of hard work gone in. The vision and the reboot that you talked about was for us to really go back to our DNA, what Mahindra stood for, being bold, delivering products that have outstanding quality and that is what you see now, having agility and moving fast in terms of what we do and what really gives us comfort about the results this quarter is that it is all our businesses coming together and performing well.

Our services businesses, in fact, had more profit than our tractor business, which is doing exceedingly well, again, in a tough industry. But all our businesses are now starting to fire on all cylinders and that is something that we are very proud of.

You have increased your guidance and talking about new launches. This is confidence. But you are going ahead with your commitment to go ahead with new launches and increasing your guidance when industry per se is struggling a bit. Inventory levels are high. There is a lot of talk that the second half will not be as exciting as what the first half was.

Anish Shah: It is a function of the products that we have because we have tried to develop products that are not only best in their segment but compete with maybe even a couple of segments above that. The quality of the products is something that stands out. They are very distinctive and that is the reason why we see a very high level of demand across multiple products that we have launched over the last few years. That is helping us stay ahead of industry.

How much of your growth is a function of the price cut which you took? You did take a 7-8% price cut and even though it was a planned price cut, I am sure it helped you significantly. Is that one of the factors which helped you on aggregate sales?

Anish Shah: That was only on one particular product, which was the XUV700 and that in a sense was passing on the lower costs we had and we had been signalling that for about six months. They were slightly lower costs from a commodity standpoint. And we had been paying a lot more for semiconductors through the crisis for a couple of years and as that eased out, those lower costs also were passed on to the customer. And yes, that has helped and in hindsight was a very good decision, that was good for the consumers and increased the volume significantly and overall, from a financial standpoint was good for us as well.

Industry data, which came post Diwali – both wholesale data and the retail data from FADA – is very impressive. Can I say that this entire view which a lot of investors and a lot of market men have about high inventory levels needs to be changed?

Anish Shah: For us, at least, we have not seen high inventory levels. In fact, for many of our products, we still have a little bit of a backlog. We prefer not to be in a backlog, but we have increased capacity significantly and are trying to catch up on that. So, for us, it is a good problem to be in, in a sense, and we really do not have excess inventory.

Mahindra & Mahindra has benefited immensely because of premiumisation in the auto industry. The blitzkrieg of SUV launches has been the differentiating factor. But at this juncture, when the market share of SUVs is greater than 50%, can the momentum really stall a bit? Do you worry about the base effect that could kick in?

Anish Shah: The auto industry overall still has not grown very well over the last few years. The penetration in India is far lower than many countries around the world. So, there is significant room to grow in the auto industry overall. SUVs as a percent of overall auto will likely still grow. And yes, at some point, that will plateau because it really cannot grow beyond a certain point.

But for us, there is huge potential. We still are at only a 22% market share. Actually, we have gone up from 13% revenue market share and we still have a lot more room to grow. We have got the right set of products and with our electric launches coming up, we are very excited about what the future holds for us.

There are times when a company reboots itself and for Mahindra & Mahindra I guess. post COVID this entire premiumisation benefit which came in because of SUV dominance has been an extraordinary feat. Now, the company moves into the next exciting phase of launch, which is EV launches. In the next 12 months, we will hear a lot of news from Mahindra & Mahindra. Everything would be centred around EVs. What should one focus on as a shareholder now because of these planned EV launches?

Anish Shah: EV is an exciting new product and the products that we have developed will stand up to the best in the world and that is something that you will see in a very short time. We already have outlined the teaser for our launch, which is on the 26th and 27th of November. And we feel that this product or the set of products that we have for electric will really redefine the way people look at electric vehicles.

In terms of what one would expect as a shareholder is continued operating focus, that is something we have been doing. We tell all our teams to keep our heads down, focus on what we have to do, keep the discipline, and continue to think big and deliver on our commitments.

When FY25 started, there was a lot of excitement in terms of where the consumer demand was moving. Nobody anticipated this sluggishness which has kicked in for the sector in the last two or three months. But as we move from the first half to the second half of this year, are we in for a positive surprise? Is the worst over for the industry, and for Mahindra & Mahindra, there could be a marked recovery going forward?

Anish Shah: Diwali was very good for everyone in the industry and that definitely is a positive sign. In the rural sector, our tractors business grew 30% in October and we have increased the guidance for the overall industry growth for this year as well. We are starting to see some green shoots there and that is something that will help the industry.

I can see a lot of exciting renewable companies have gone public and they are commanding a lot of interest and market share. You have a big growth gem – as you like to describe it – Susten. What are the plans there? Some of the recent listings are commanding a market cap of Rs 50,000-100,000 crore. What is your plan to unlock valuation in Susten?

Anish Shah: We have set up an InvIT, which is India's largest renewables InvIT and that is a listed entity. Susten is growing exceedingly well. We had a plan to add one gigawatt every year for the next five years, which would have taken the business up 5x. But instead, what we are seeing is a much faster growth. In the last quarter alone, we added almost a gigawatt and the business is now re-looking at its plans to say, can we grow at 10x and not 5x? In terms of listing for Susten, at this point, we are not thinking about it. Our focus is really to build strong businesses. If it makes sense to list at some point in future, we will look at it.

The media is always speculating which is the next partnership or stake sale that is coming in. Are there any plans on the anvil? When I say plans on the anvil, as in serious negotiations which have started where you would like to look at a technology tie-up or a stake sale like you did in your EV business and any of your growth gem businesses?

Anish Shah: That is one area where we continue to have lots of discussions on opportunities across all our sectors and we have got a certain set of guidelines we have laid out and a very high bar in terms of when we would get into any such partnership, because it has to make sense for our shareholders and if we can meet that bar on any of them at that point, we will talk about it.

What is the next leg of unlocking, which shareholders should really look forward to? The comeback in SUV, migration into EVs, tractors comeback, we know about it. But knowing Anish Shah I am sure you are thinking beyond what we know.

Anish Shah: We have talked about our growth gems and 5X growth and we are seeing them very much on track. These are businesses which have great potential and have great positions in the marketplace as well, a very strong right to win, and not just renewables which we spoke about, but if we look at growth gems across the board, from logistics, real estate, hospitality, classic legends, our aerospace business, these are all businesses that are at this point growing very significantly, so is our electric three-wheeler business which has grown a lot, this is one where we had a stake sale to IFC and the India-Japan Fund.

From where it is right now, we are again looking at a 4X or 5X growth after having done that already.

IT, financials, and then tourism – three more listed entities. Out of the three businesses, as the CEO of Mahindra & Mahindra, where are you excited about?

Anish Shah: I would say all three because our IT services business and our financial services business both have underperformed the market in the past. In Mahindra Finance, we laid out a turnaround plan two years ago. We are well on track. A lot of good work has happened. Asset quality is very strong and this is a business that is extremely well positioned in its marketplace and will do very well as we are seeing from the numbers now. Tech Mahindra started its turnaround plan a few months ago and again is on a good track. The hospitality business has huge potential in India and this is a business where the customers tell us that they have great experiences when they come to our resorts. We have hundred resorts in India today and this is one where we are looking at expanding it 5X from where we stand.

Is Mahindra & Mahindra in a growth phase? Is Mahindra & Mahindra in an expansion phase? Is Mahindra & Mahindra in an investment phase? Can I say that these three words which I used all hold true for Mahindra & Mahindra for the next three years?

Anish Shah: We have seen that over the last three years and yes, this is a path that we are going on the next three years as well.

There is one space you will agree with me that you are disappointed in. Do you want to guess what I am referring to?
Anish Shah: No, I shall let you elaborate on that.

Cricket. What is happening there? You are a cricket fan.

Anish Shah: Yes, of course, that is a disappointment. But again, I am an optimist and a huge believer in the India team. So, I am sure there shall be a very strong bounce back on that front.