ANISH SHAH, the managing director and chief executive officer of Mahindra Group, is encouraging the 78-year-old conglomerate to be bold—a trait he believes has helped it succeed in the past. "The Scorpio was a bold move in 2002. The Satyam acquisition was a bold move. Setting up Mahindra Finance, Mahindra Lifespaces, Mahindra Holidays, the XUV500, the acquisition of Punjab Tractors — all these were bold and entrepreneurial moves," says Shah.

While the conglomerate is driving growth in auto and farm businesses led by new products and overseas sales, Shah doesn't mince words when it comes to two of the group's biggest services businesses—Tech Mahindra and Mahindra Finance. "Over the last few years, both have underperformed peers," he says. It was important to acknowledge that there's a lot more potential in these businesses, says Shah, adding that Tech Mahindra needs to continue expansion beyond telecom and aim for large deals to create momentum. "We need to look at a very strong delivery structure because we have a margin gap with our peers and have to find a way to close that," he says.

Mahindra & Mahindra, which clocked a revenue of ₹1.21 lakh crore in FY23, classifies its interests into three broad categories—auto, farm and services. Core businesses include auto, farm, finance and Tech Mahindra. Growth gems are logistics, holidays, real estate firm Lifespaces, solar unit Susten, steelmaker Accelo and Classic Legends, the owner of the Jawa motorcycle brand, among others.

The group gives top priority to profitability for which Shah pays special attention to capital allocation. "It is about ensuring that the capital is generating returns we had committed and being able to make quick decisions if things are not going as expected," he says. This was behind the conglomerate's decision to exit 15 businesses, including South Korean automaker Ssangyong with $4 billion revenue, and shows in the company's 19.9% return on equity (RoE) in FY23, higher than the committed level of 18%. "When we said we will get to 18%, a lot of stakeholders, including investors, analysts and media, said you're crazy. We gave a target of three to five years. We got there in one-and-a-half years," Shah says, adding that RoE in first quarter of FY24 was 24%. Mahindra & Mahindra's profits rose 56% to ₹10,282 crore in FY23; revenues jumped 34%.

In automobiles, the company intends to double capacity to 49,000 units by the end of this fiscal to cater to the growing demand for its SUVs. It has announced launching five electric SUVs in a span of 18 months starting December 2024. This is apart from the electric version of its popular off-road vehicle Thar. "We saw a lot of demand for the concept vehicle that we showcased," says Shah. He, however, believes that charging time needs to come down for electric vehicle (EV) sales to pick up. "That technology needs to improve. The government has done everything it can from a subsidy point of view. The charging time will play the biggest role," says Shah. Mahindra's new EVs will have a charging time of 30 minutes as against 45-50 minutes at present, says Shah. "Even at 30 minutes, you can't justify the cost of land in Mumbai or most large cities, because a charger can serve only 48 cars in a day even if everything is perfect," says Shah. If charging time comes down to 10 minutes, petrol pumps will start offering EV charging, he adds. The automaker is looking at EVs accounting for 20-30% of its sales by 2027. It is likely to get there faster if the charging time comes down. In order to gear up for the future, the group has tapped investors for its four-wheeler passenger EV unit, Mahindra Electric Automobile Ltd. (MEAL). In August, Singapore's sovereign wealth fund Temasek pumped ₹1,200 crore into the company, valuing it at ₹80,580 crore. Last year, British International Investment invested ₹1,925 crore. Shah says the aim was to get feedback and validation from marquee investors. "They are experienced in markets around the world and can help our business grow faster. It has not been a significant dilution. We have diluted a maximum of 4.5-6%. It's a win for everyone," he says, adding that MEAL may look at an initial public offering in the next five to seven years. For now, its primary focus is to have multiple suppliers for batteries and motors. It has partnerships with German carmaker Volkswagen and China's BYD.

In the farms business, Mahindra Group seeks to be a global player and has acquired tractor companies in Japan, Turkey and Finland. "In Brazil, we are going on our own. We've gone from 0 to 5% market share very quickly. We're now doubling capacity there in tractors. The next target is to get to 10% market share. If there is something meaningful for us to acquire at a reasonable price, we will look at that," says Shah.

The acquisition of Mitsubishi Tractors helped the company roll out its latest Oja series. It now plans to export these to ASEAN markets. "It's about having the right product for each market because farming is a localised business," says Shah. "Why should an Indian company be subservient to global players? Let us go and acquire global brands. We will actually create more value for you and we've done that well," he says.

To get there, Shah wants group CEOs to be technology leaders. This means leveraging Tech Mahindra a lot more. "We have done a number of projects with Tech Mahindra to bring in latest technologies in businesses, whether it is Metaverse, 5G, generative AI or blockchain," says Shah. The conglomerate is also leveraging technology and data to improve the asset quality of Mahindra Finance, its non-banking financial company. The group invested ₹417 crore in Mumbai-based RBL Bank earlier this year. "For us this is an option play," says Shah.

Mahindra Group's growth gems have also delivered robust performance with many hitting a billion-dollar valuation. "If we look from FY20 to FY23, valuation growth in these businesses has been enormous. Many have grown three-four times. Lifespaces has grown from $120 million to close to $1 billion m-cap presently. Electric three-wheeler business went from $50 million valuation to $730 million after an external party came in and added value," says Shah.

On leadership, the Mahindra Group CEO says he will not win any popularity contest but will likely come fairly high on value-based decisions. "I have always believed that you've got to do what is right. And if you fall into the trap of being popular, you're not going to make decisions that are required," says Shah.

The MD & CEO of one of India's biggest conglomerates stays up late at night finishing work. His work-life mantra is working hard on weekdays and spending time with family on weekends. "From a time allocation stand-point, weekends are where I usually like more balance. I haven't been able to maintain that balance very well."

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