Mahindra & Mahindra increases capex outlay for FY22-24 to Rs 15,900 cr

Mahindra & Mahindra on Friday said it has revised upward the capital expenditure (capex) outlay for the three years cycle of FY22-FY24 to Rs 15,900 crore from Rs 15,075 crore.

An additional Rs 1,600 crore will go into the conventional ICE (Internal Combustion Engine) vehicles for the anticipated regulatory changes and capacity expansion, the company said.

Of the Rs 15,900 crore revised capex for FY22-FY24 cycle, an additional Rs 1,600 crore will go into the ICE vehicles for the anticipated regulatory changes and capacity expansion while an additional Rs 1,125 crore for the electric vehicle segment to produce vehicles with changing requirements, the automaker said in a presentation.

Another Rs 500 crore has been earmarked for auto and farm investments, said the Mumbai-based company which on Friday reported an 18 per cent jump in its consolidated profit at Rs 2,637 crore in the March 2023 quarter and highest-ever annual profit of Rs 10,282 crore in FY23.

The company continued to focus on value creation through capital allocation, partnerships and monetization, M&M said.

The company also said that the automotive business led the way last fiscal with 62 per cent growth, driven by strong execution of launches and an improvement in supply chain related issues.

M&M Executive Director & CEO (Auto and Farm Sector) Rajesh Jejurikar said the company remained excited about the market momentum in both the auto and farm equipment segments and about crossing the milestone of 1.1 million vehicles in FY23.

About the chip shortage, the company said it is going to be a "wait and watch" for the next few quarters.

Jejurikar said that the waiting period for the company's vehicle models was expected to come down substantially in the next six months with the capacity to be scaled up to 49,000 from 39,000 per month.

According to him, there was a production loss of up to 12,000 units during the March quarter due to the semiconductor shortage.

He said that there were no plans to launch any new product this year, which will be more about consolidation, and added the 5-door Thar will be launched in 2024, which earlier was being speculated for this year.

About the new emission norms, Jejurikar said that the company is "not working on the development of BS-VIII version immediately" as long as further clarification on the issue comes from the government.