The year 2011-12 was a very difficult and challenging one. There were problems during the year stemming from the state of sovereign debts of many advanced economies, turmoil in the Middle East, weakening global economic environment and India’s rising fiscal and current account deficits.
Addressing the 66th annual general meeting of Mahindra & Mahindra, Mr. Keshub Mahindra, the outgoing Chairman, said that in spite of the turbulence and uncertainties, the company business continued to grow. In the automotive sector, it registered a growth of nearly 29 per cent, while in the case of tractors, the growth was 10 per cent despite the sluggish conditions in the year gone by.
The company acquired majority holding in South Korean SsangYong Motor Company and opened its world class engineering and research and development centre, the Mahindra Research Valley (MRV), in Chennai. Spread over 125 acres, this facility was set up at an investment of Rs. 650 crores and presently has a workforce of 1,500 persons.
Gross revenues and other income of the company for the year, together with MVML, is Rs. 10,003.9 crores as against Rs. 7,400 crores during the corresponding period last year, showing a growth of 35.2 per cent. Net profit of the quarter is Rs. 778.5 crores (Rs. 618.3 crores), a growth of 25.9 per cent.
The company recorded total sales of 1,22,571 vehicles, as compared to 95,238 vehicles in the previous year, registering a growth of 28.70 per cent.
The company’s strong results have been attained through a disciplined strategy, cutting costs, curbing expenditures, and maintaining growth by meeting the ever-changing consumer demand.
However, Mr. Mahindra said, the economic uncertainties of the year under review aggravated further in the current year, with the Indian economy facing a persistent inflation, a volatile currency, lower GDP growth of below six per cent, high interest rates, the price of oil remaining high, and the threat by the rating agencies to downgrade the country’s rating.
The risks of a full-fledged crisis in Europe remain high, Greece is in a dire state, Spain is showing signs of recession and Italy is showing unacceptable figures of stability. China too is also showing signs of slowing down and oil markets are in a flux. At the same time, weak domestic macros – high inflation, large fiscal and current account deficits – continue to constrain policy actions critical to supporting growth.
According to Mr. Mahindra, though the future indeed looks challenging, there is hope that in the latter part of the current year, one might see a change leading to growth and containment of revenue and fiscal deficits. “I also expect that the Government will move to clarify the uncertainties in many sections of our economy and to bring back focus on providing a platform for the growth of our economy which is critical for bettering the quality of life of the people. All political parties should move with one objective of creating an environment in which the economic growth of the country continues.
“After having enjoyed the privilege of serving as a Director of your company for 64 years, and the honour of being Chairman of the Board for 48 years, I have decided to hand over the baton to the younger generation. I am deeply moved by the sentiments expressed by the Board and the management in requesting me to accept the position of Chairman Emeritus, which I do with humility. The Board has selected Mr. Anand Mahindra to be the next Chairman. As you all know, Anand is a leader of great acumen, moving in step with technological advances and, above all, passionate about preserving what is ‘core’ to the company – integrity, ethics and inclusiveness”, Mr. Mahindra added.