India seeing good progress in EV space with entry of global players, says M&M

Mahindra & Mahindra said that India is seeing "good progress" in the domestic electric vehicle space with the entry of new international players while maintaining that its offerings stack up quite well against the competitors, who are coming in.

At a post-earnings analyst meeting here, the company also said that while urban sentiment in terms of demand currently is weak, the fundamentals remain strong.

Earlier, the company posted a 24% year-on-year increase in its consolidated net profit to Rs 4,083 crore for the June quarter, driven by broad-based growth across business verticals. The company reported a net profit of Rs 3,283 crore for the April-June quarter of the last fiscal.

Total income from operations rose to Rs 45,529 crore in the June quarter against Rs 37,218 crore in the year-ago period, the Mumbai-based company said in a regulatory filing.

The company stated that auto and farm businesses continue to deliver on growth and margins with profits up by 20%.

"Of course, we have new players in the market share from a volume stand point. We believe that, our goals should be around the revenue market share because our products will be at much higher revenue price points … believe that more players will come in and that is fundamentally the right direction for the country. We are seeing very good progress with new players coming in," Mahindra & Mahindra (M&M) Group CEO & MD Anish Shah said in an apparent reference to global EV giant Tesla, which entered the domestic market earlier this month.

Tesla made its much-awaited debut with the launch of its Model Y at a price starting at Rs 59.89 lakh while opening its first experience centre in Mumbai BKC business district.

"We will start now seeing a rapid growth in EV penetration in the same system structure that we make, and that will be in the next few months. Overall, it depends on the markets and the process," Shah said.

Stating that the company has had this question of competition for a few decades now, M&M Executive Director & CEO (Auto and Farm Sector) Rajesh Jejurikar said, "What we've seen is that competition has always made us stronger. One difference we see this time is that usually, in the past, when competition came in, we had to improve our offerings, which we did, and we were able to combat competition well."

" This time, with the electric … our products actually stack up very well against our competitors coming in, so we are in a better position to start with."

Reiterating that the company is comfortably covered on the rare earth magnet issue, Jejurikar said there is no disruption in production.

"We have taken a series of actions. Some of it has been around, but we are covered comfortably at least for the coming quarter and the next quarter," he said.

"Urban (sentiment) continues to be weak. There are multiple reasons for that, but fundamentals are strong. So, on balance, I do believe that even everything that we have seen with regards to greater costs, greater liquidity and the overall sentiment being weaker will likely turn around even amongst, not just for rural but for urban," Shah said.