Mahindra & Mahindra lines up Rs 37,000 crore capex in next 3 years

CHENNAI: Auto to software conglomerate Mahindra & Mahindra has announced a combined capex of Rs 37,000 crore to be spent over the next three years – from FY25 to FY27. Of this, the company plans to spend Rs 14,000 crore on petrol and diesel vehicles while another Rs 12,000 crore have been lined up for the group’s EV business MEAL (Mahindra Electric Automobile Ltd).
The group’s farm and services businesses get a cash deployment of Rs 5,000 crore each. Another Rs 1,000 crore has been lined up for investments in other subsidiaries. This is excluding cell localisation spend, company officials said.
Much of this will be spent to bring in both new products as well as refreshes. In auto, the capex spend will be Rs 8,500 crore on ICE SUVs and Rs 4000 crore on commercial vehicles while another Rs 1500 crore will be spent on sustenance. The company has announced nine new ICE (internal combustion engine) products, seven new battery electric products and seven new light commercial vehicles by 2030. The ICE launches include three ‘mid cycle enhancements’ including the recently launched XUV3XO & six new SUVs. The seven LCV include five ICE & two EVs in sub-3.5 tonne category.
M&M and its auto division expect to generate sufficient operating cash to satisfy the capital investment needs therefore M&M and British International Investment (BII) have “mutually agreed to extend the timeframe for the final tranche of BII’s planned investment of Rs 725 crore in MEAL and will jointly assess whether additional investment is required by 31 December, 2024,” said Anish Shah, CEO & MD, Mahindra Group. BII has already invested Rs 1,200 crore and Temasek has invested another Rs 300 crore so far in MEAL. “Temasek will invest the balance Rs 900 crore as per agreed timelines,” he added.
The company’s standalone PAT for FY24 was up 48% at Rs 10,718 crore while consolidated PAT for the year is up 25% at Rs 11269 crore. This performance has been despite “stress in rural/farm industry and Tech Mahindra PAT down 52%” said Shah.
The company’s auto division currently has 2,20,000 bookings including 50,000 open bookings for XUV 3XO, 59,000 bookings for Thar, 16000 for XUV700, 10,000 for Bolero and 86,000 for Scorpio N.
Overall, it is clocking 48,000 new bookings per month and 42,000 billings, said Rajesh Jejurikar, ED & CEO, AFS, M&M. The company is also expanding capacity to improve delivery time. “Overall SUV capacity will go from 49,000 units in FY24 to 64,000 units in FY25 and 72,000 units in FY26,” he added. The FY25 exit capacity includes an increase in SUV capacity (THAR 5D, XUV3XO/4OO) by 5000 units and 10,000 units of EV capacity. “There will be an additional 8,000 units of EV capacity by FY26 end,” he added.