Mahindra & Mahindra Ltd 500520
Q4 2013 Earnings Call Transcript

Transcript Call Date 05/30/2013

Bharat Doshi - Executive Director & Group CFO: Good evening friends. It's a pleasure to meet you on this occasion of the annual results as well as the quarterly results, which were approved by the M&M Board earlier this afternoon.

I don't want to get into specifics of the results, because Parthasarathy here, whom you all know, is going to make the presentation and after that we will have Dr. Pawan Goenka on the Auto & Farm sector supported by his team.

We have the relevant Presidents and business heads of various businesses of the Group present here, so if anyone has questions beyond Auto & Farm sector also feel free to ask and the right person will give you the reply. After that there will be still time because after the presentations are over and there will be question and answer, there will be time to interact with senior management of the company. So, Partha, would you like to start on the results?

V.S. Parthasarathy - Group CIO, EVP – Group M&A, Finance and Accounts: Yes, just a minute. Now we can go live, right? With the technical glitch out of the way, let me extend a very warm welcome to all of you for the analyst meet for the year F 2013 and Q4. Let me start today by talking about three things. The three-speed economies, how did we fare and the financial in a little more detail.

First, the three-speed economies as coined by Christine Lagarde. What (he) talks about is that after a long struggle, U.S. is on the path to recovery and growth. Another developed economy, Japan, is trying to get to growth path through inflation mechanism. On the other hand, Europe is contracting. There is lot of talk about Europe – euro as a currency going to go away. We hope not, but there is a lot of uncertainty in that field.

The third part of the angle is the emerging markets, which itself is growing at varied speeds, and the currency and the GDP growths are varying in all these economy. India is slated to go between 5.6% to 6.7% in the next year and China around 7% kind of growth. So, varying levels of speed at which these economies are going. Within that, our story continues of lack of policy action and therefore lot of investment slowdown which we saw.

Luckily, with the some policy action that we saw in the recent past, there has been a lot of optimism and some financial market at least has seen positive momentum. However, more action is required in this front. So, it is almost like I soap opera, where we say there is action, inaction, reaction and waiting policy action. In the year, F 2014, we will all wait and watch this area to see how things span.

Coming to this, this proves to be a double-edged sword for us. On one hand, the export to the developed market becomes a little bit more problematic. However, on the other hand, the inter cooperation within the region, intra region cooperation becomes a very prominent action. Currency cooperation and MFN, FTS is becoming the talk of the day and this will give us benefits even as the export becomes a little bit challenging. Also, because of the various liquidity benefits that we are getting, we will – because of U.S., Europe all quantitative easing taking place, money will be available at much cheaper rates to Indian good corporates and investment to India may see the upswing.

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