MIRA INFORM REPORT
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Report No. : |
304725 |
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Report Date : |
27.01.2015 |
IDENTIFICATION DETAILS
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Name : |
MAHINDRA HEAVY ENGINES PRIVATE LIMITED (w.e.f. 04.06.2013) |
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Formerly Known
As : |
MAHINDRA NAVISTAR ENGINES PRIVATE LIMITED (w.e.f. 24.03.2008) MIM ENGINES INDIA PRIVATE LIMITED |
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Registered
Office : |
Mahindra Towers, Dr. G.M Bhosale Marg, P.K. Kurne, Worli, Mumbai – 400001, Maharashtra |
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Country : |
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Financials (as
on) : |
31.03.2014 |
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Date of
Incorporation : |
09.04.2007 |
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Com. Reg. No.: |
11-169753 |
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Capital
Investment / Paid-up Capital : |
Rs.3280.000 Millions |
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CIN No.: [Company Identification
No.] |
U35914MH2007PTC169753 |
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TIN No.: |
Not Available |
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IEC No.: |
Not Available |
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TAN No.: [Tax Deduction &
Collection Account No.] |
Not Available |
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PAN No.: [Permanent Account No.] |
AAFCM0476N |
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Legal Form : |
Private Limited Liability Company |
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Line of Business
: |
Manufacturing of Engines. |
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No. of Employees
: |
Information denied by management |
RATING & COMMENTS
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MIRA’s Rating : |
A (65) |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a subsidiary of “Mahindra and Mahindra Limited”. It is an
established company having fine track. Trade relations are fair. Business is active. Payment terms are reported
as regular and as per commitments. In view of reputed parentage, the company can be considered for
business dealings at usual trade terms and conditions. |
NOTES:
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
EXTERNAL AGENCY RATING
|
Rating Agency Name |
ICRA |
|
Rating |
Long Term Ratings = AA |
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Rating Explanation |
High degree of safety and low credit risk |
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Date |
September 2014 |
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Rating Agency Name |
ICRA |
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Rating |
Short Term Ratings = A1+ |
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Rating Explanation |
Very strong degree of safety and lowest credit risk |
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Date |
September 2014 |
RBI DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available RBI Defaulters’ list.
EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of
31-03-2014.
INFORMATION PARTED BY (GENERAL DETAILS)
|
Name : |
Mr. Thomas Roy |
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Designation : |
Business Development Manager |
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Contact No.: |
91-9916102829 |
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Date : |
23.01.2015 |
LOCATIONS
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Registered Office : |
Mahindra Towers, Dr. G.M Bhosale Marg, P.K. Kurne, Worli, Mumbai – 400001, Maharashtra, India |
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Tel. No.: |
91-22-24905620 |
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Mobile No.: |
91-9916102829 (Mr. Thomas Roy) |
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Fax No.: |
91-22-21800833 |
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E-Mail : |
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Website : |
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Factory : |
Plot No #A-1/1, Chakan Industrial Area, Phase-IV, Village
Nigoje Chakan. |
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Tel. No.: |
91-21-35612800 |
DIRECTORS
As on 26.08.2014
|
Name : |
Mr. Pankaj Uttam Sonalkar |
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Designation : |
Managing Director |
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Address : |
Shevale Complex, S. No.22, Hissa No.21.1-2, Adj. Finolex Works Office,
Pimpri - 411018, Maharashtra, India |
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Date of Birth/Age : |
03.10.1961 |
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Qualification : |
M. Tech. Mechanical |
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Date of Appointment : |
12.02.2013 |
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DIN No.: |
02685465 |
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Name : |
Mr. Durgashankar Subramaniam |
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Designation : |
Director |
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Address : |
203, 2nd Floor, Ganga Towers, Atur Park,, Sion Trombay Road, Mumbai -
400071, Maharashtra, India |
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Date of Birth/Age : |
13.07.1959 |
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Date of Appointment : |
26.04.2013 |
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DIN No.: |
00044713 |
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Name : |
Mr. Rajan Wadhera |
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Designation : |
Director |
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Address : |
1203, Oberoi Gardens, 'C' Wing, Thakur Village, Kandivli (East),
Mumbai - 400101, Maharashtra, India |
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Date of Birth/Age : |
10.07.1956 |
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Date of Appointment : |
26.04.2013 |
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DIN No.: |
00416429 |
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Name : |
Mr. Bharat Moossaddee |
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Designation : |
Director |
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Address : |
M-14.17, DLF City-II, Off Akashneem Marg, Gurgaon - 122002, Haryana,
India |
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Date of Birth/Age : |
11.11.1962 |
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Date of Appointment : |
26.04.2013 |
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DIN No.: |
02166403 |
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Name : |
Mr. Nalin Mehta |
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Designation : |
Director |
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Address : |
1805/06 Beverly Hills, T-36, Shastri Nagar, Andheri (West), Mumbai -
400053, Maharashtra, India |
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Date of Birth/Age : |
08.09.1958 |
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Date of Appointment : |
09.05.2011 |
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DIN No.: |
02272736 |
KEY EXECUTIVES
|
Name : |
Mr. Saiganesh G. Gopalakrishnan Iyer |
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Designation : |
Chief Finance Officer |
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Address : |
B-604, Manikbaugh Orchid, Nehru Nagar, Pimpri, Pune - 411018,
Maharashtra, India |
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Date of Appointment : |
12.08.2014 |
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PAN No.: |
AACPI4726P |
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Name : |
Kiran Bade |
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Designation : |
Secretary |
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Address : |
Flat No. 204, Building No. 5, Accolade CHS Limited, Hajuri Road,Thane
(West), Thane - 400604, Maharashtra, India |
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Date of Birth/Age : |
09.02.1958 |
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Date of Appointment : |
31.03.2014 |
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PAN No.: |
AHYPB0384K |
MAJOR SHAREHOLDERS
As on 26.08.2014
|
Names of Shareholders |
|
No. of Shares |
|
Mahindra and Mahindra Limited, India |
|
400999999 |
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Mahindra and Mahindra Limited, India jointly with Narayan Shankar |
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1 |
|
Total |
|
401000000 |
Equity Share Break up (Percentage of Total Equity)
As on 26.08.2014
|
Category |
Percentage |
|
Bodies corporate |
100.00 |
|
Total |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturing of Engines. |
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Products : |
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Brand Names : |
-- |
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Agencies Held : |
-- |
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Exports : |
Not Divulged |
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Imports : |
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Products : |
Raw Material |
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Countries : |
Japan |
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Terms : |
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Selling : |
Cash and Credit (30 Days) |
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Purchasing : |
Cash and Credit (30 Days) |
PRODUCTION STATUS – NOT AVAILABLE
GENERAL INFORMATION
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Suppliers : |
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Customers : |
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No. of Employees : |
Information denied by management |
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Bankers : |
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Facilities : |
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Auditors : |
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Name : |
Deloitte Haskins and Sells Chartered Accountants |
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Address : |
Heritage, 3rd Floor, Near Gujarat Vidyapeet, Off Ashram Road, Ahmedabad - 380014, Gujarat, India |
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PAN No.: |
AABFA5846M |
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Memberships : |
-- |
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Collaborators : |
-- |
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Holding Company : |
CIN No.: L65990MH1945PLC004558 |
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Fellow Subsidiary : |
CIN No.: U74999MH2011PTC212468
CIN No.: U34100MH2005PTC153702
CIN No.: U27100MH2007PLC173636
CIN No.: U29130MH2004PTC168150
CIN No.: U30007MH1991PLC064368
CIN No.: U63000MH2007PLC173466
CIN No.: U34100MH2007PLC171151
CIN No.: U63040MH1994PLC079098
CIN No.: U72400MH1995PLC091404
CIN No.: U51900MH1978PLC020222
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Company having significant influence |
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CAPITAL STRUCTURE
As on 26.08.2014
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
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|
|
|
|
535000000 |
Equity Shares |
Rs.10/- each |
Rs.5350.000 Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
401000000 |
Equity Shares |
Rs.10/- each |
Rs.4010.000 Millions |
As on 31.03.2014
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
375000000 |
Equity Shares |
Rs.10/- each |
Rs.3750.000 Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
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|
|
|
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|
328000000 |
Equity Shares |
Rs.10/- each |
Rs.3280.000 Millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2014 |
31.03.2013 |
31.03.2012 |
|
I.
EQUITY
AND LIABILITIES |
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|
|
|
(1)Shareholders' Funds |
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|
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(a) Share Capital |
3,280.000 |
2,650.000 |
1,950.000 |
|
(b) Reserves & Surplus |
(2,561.462) |
(1,983.901) |
(1,364.682) |
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(c) Money
received against share warrants |
0.000 |
0.000 |
0.000 |
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|
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(2) Share Application money pending
allotment |
0.000 |
0.000 |
0.000 |
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Total
Shareholders’ Funds (1) + (2) |
718.538 |
666.099 |
585.318 |
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(3)
Non-Current Liabilities |
|
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(a) long-term borrowings |
754.162 |
1,057.912 |
1,294.714 |
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(b) Deferred tax liabilities (Net) |
0.000 |
0.000 |
0.000 |
|
(c) Other long term
liabilities |
0.000 |
0.000 |
0.000 |
|
(d) long-term
provisions |
14.505 |
14.250 |
13.004 |
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Total Non-current Liabilities
(3) |
768.667 |
1,072.162 |
1,307.718 |
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(4)
Current Liabilities |
|
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|
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(a) Short
term borrowings |
183.329 |
204.813 |
268.723 |
|
(b) Trade
payables |
298.093 |
195.772 |
297.565 |
|
(c) Other
current liabilities |
358.211 |
348.038 |
135.937 |
|
(d) Short-term
provisions |
53.916 |
35.465 |
27.238 |
|
Total Current
Liabilities (4) |
893.549 |
784.088 |
729.463 |
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|
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TOTAL |
2,380.754 |
2,522.349 |
2,622.499 |
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II.
ASSETS |
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(1) Non-current
assets |
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(a) Fixed
Assets |
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|
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(i)
Tangible assets |
1,269.987 |
1,334.356 |
1,213.005 |
|
(ii)
Intangible Assets |
171.702 |
290.016 |
406.317 |
|
(iii)
Capital work-in-progress |
127.284 |
25.031 |
0.000 |
|
(iv)
Intangible assets under development |
198.675 |
162.117 |
0.000 |
|
(b) Non-current Investments |
0.000 |
0.000 |
0.000 |
|
(c) Deferred tax assets (net) |
0.000 |
0.000 |
0.000 |
|
(d) Long-term Loan and Advances |
91.308 |
54.889 |
94.177 |
|
(e) Other Non-current
assets |
0.000 |
0.042 |
2.426 |
|
Total Non-Current
Assets |
1,858.956 |
1,866.451 |
1,715.925 |
|
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(2)
Current assets |
|
|
|
|
(a)
Current investments |
0.000 |
0.000 |
0.000 |
|
(b)
Inventories |
82.533 |
149.912 |
269.276 |
|
(c) Trade
receivables |
272.169 |
320.497 |
433.599 |
|
(d) Cash
and cash equivalents |
15.312 |
28.941 |
32.449 |
|
(e)
Short-term loans and advances |
151.784 |
156.548 |
171.250 |
|
(f) Other
current assets |
0.000 |
0.000 |
0.000 |
|
Total
Current Assets |
521.798 |
655.898 |
906.574 |
|
|
|
|
|
|
TOTAL |
2,380.754 |
2,522.349 |
2,622.499 |
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2014 |
31.03.2013 |
31.03.2012 |
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SALES |
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Income |
961.831 |
1,059.357 |
1,167.678 |
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Other Income |
NA |
NA |
NA |
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TOTAL (A) |
NA |
NA |
NA |
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EXPENSES |
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TOTAL (B) |
NA |
NA |
NA |
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PROFIT/(LOSS)
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
(216.153) |
(224.068) |
(283.380) |
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Less |
FINANCIAL
EXPENSES (D) |
155.602 |
199.856 |
173.431 |
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PROFIT/(LOSS)
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D)
(E) |
(371.755) |
(423.924) |
(456.811) |
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Less |
DEPRECIATION/
AMORTISATION (F) |
205.806 |
195.294 |
185.804 |
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PROFIT/(LOSS)
BEFORE TAX (E-F) (G) |
(577.561) |
(619.218) |
(642.615) |
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Less |
TAX (H) |
0.000 |
0.000 |
0.000 |
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PROFIT/(LOSS)
AFTER TAX (G-H) (I) |
(577.561) |
(619.218) |
(642.615) |
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Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
(1,983.901) |
(1,364.683) |
(717.068) |
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BALANCE CARRIED
TO THE B/S |
(2,561.462) |
(1,983.901) |
(1,359.683) |
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EARNINGS IN
FOREIGN CURRENCY |
|
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||
|
|
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Export Earnings |
96.311 |
101.963 |
138.321 |
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TOTAL EARNINGS |
96.311 |
101.963 |
138.321 |
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||
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Earnings /
(Loss) Per Share (Rs.) |
(1.76) |
NA |
NA |
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KEY RATIOS
|
PARTICULARS |
|
31.03.2014 |
31.03.2013 |
31.03.2012 |
|
Net Profit Margin (PAT/Sales) |
(%) |
(60.05) |
(58.45) |
(55.03) |
|
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Operating Profit Margin (PBDIT/Sales) |
(%) |
(22.47) |
(21.15) |
(24.27) |
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Return on Total Assets (PBT/Total Assets} |
(%) |
(28.11) |
(26.52) |
(24.50) |
|
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|
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|
Return on Investment (ROI) (PBT/Networth) |
|
(0.80) |
(0.93) |
(1.10) |
|
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|
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|
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|
Debt Equity Ratio (Total Debt /Networth) |
|
1.30 |
1.90 |
2.67 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
0.58 |
0.84 |
1.24 |
FINANCIAL ANALYSIS
[all figures are
in Rupees Millions]
DEBT EQUITY RATIO
|
Particular |
31.03.2012 |
31.03.2013 |
31.03.2014 |
|
|
Rs.
In Millions |
Rs.
In Millions |
Rs.
In Millions |
|
Share Capital |
1950.000 |
2650.000 |
3280.000 |
|
Reserves & Surplus |
(1364.682) |
(1983.901) |
(2561.462) |
|
Share Application money pending allotment |
0.000 |
0.000 |
0.000 |
|
Net
worth |
585.318 |
666.099 |
718.538 |
|
|
|
|
|
|
Long Term borrowings |
1294.714 |
1057.912 |
754.162 |
|
Short Term borrowings |
268.723 |
204.813 |
183.329 |
|
Total
borrowings |
1563.437 |
1262.725 |
937.491 |
|
Debt/Equity
ratio |
2.671 |
1.896 |
1.305 |
YEAR-ON-YEAR GROWTH
|
Year
on Year Growth |
31.03.2012 |
31.03.2013 |
31.03.2014 |
|
|
Rs.
In Millions |
Rs.
In Millions |
Rs.
In Millions |
|
Sales |
1,167.678 |
1,059.357 |
961.831 |
|
|
|
(9.277) |
(9.206) |
NET PROFIT MARGIN
|
Net
Profit Margin |
31.03.2012 |
31.03.2013 |
31.03.2014 |
|
|
Rs.
In Millions |
Rs.
In Millions |
Rs.
In Millions |
|
Sales
|
1,167.678 |
1,059.357 |
961.831 |
|
Profit |
(642.615) |
(619.218) |
(577.561) |
|
|
(55.03%) |
(58.45%) |
(60.05%) |
LOCAL AGENCY FURTHER INFORMATION
CURRENT MATURITIES
OF LONG TERM DEBT DETAILS
Rs.
In Millions
|
PARTICULARS |
31.03.2014 |
31.03.2013 |
31.03.2012 |
|
Current maturities of long term debt |
303.750 |
202.500 |
33.198 |
|
Total |
303.750 |
202.500 |
33.198 |
|
Sr. No. |
Check List by Info Agents |
Available in
Report (Yes / No) |
|
1] |
Year of Establishment |
Yes |
|
2] |
Locality of the firm |
Yes |
|
3] |
Constitutions of the firm |
Yes |
|
4] |
Premises details |
No |
|
5] |
Type of Business |
Yes |
|
6] |
Line of Business |
Yes |
|
7] |
Promoter's background |
Yes |
|
8] |
No. of employees |
No |
|
9] |
Name of person contacted |
Yes |
|
10] |
Designation of contact
person |
Yes |
|
11] |
Turnover of firm for last
three years |
Yes |
|
12] |
Profitability for last
three years |
Yes |
|
13] |
Reasons for variation
<> 20% |
----------- |
|
14] |
Estimation for coming
financial year |
No |
|
15] |
Capital in the business |
Yes |
|
16] |
Details of sister
concerns |
Yes |
|
17] |
Major suppliers |
No |
|
18] |
Major customers |
No |
|
19] |
Payments terms |
Yes |
|
20] |
Export / Import details
(if applicable) |
Yes |
|
21] |
Market information |
---------- |
|
22] |
Litigations that the firm
/ promoter involved in |
---------- |
|
23] |
Banking Details |
Yes |
|
24] |
Banking facility details |
Yes |
|
25] |
Conduct of the banking
account |
---------- |
|
26] |
Buyer visit details |
---------- |
|
27] |
Financials, if provided |
Yes |
|
28] |
Incorporation details, if
applicable |
Yes |
|
29] |
Last accounts filed at
ROC |
Yes |
|
30] |
Major Shareholders, if
available |
Yes |
|
31] |
Date of Birth of
Proprietor/Partner/Director, if available |
Yes |
|
32] |
PAN of
Proprietor/Partner/Director, if available |
No |
|
33] |
Voter ID No of
Proprietor/Partner/Director, if available |
No |
|
34] |
External Agency Rating,
if available |
Yes |
UNSECURED LOANS:
|
Particulars |
31.03.2014 Rs. In Millions |
31.03.2013 Rs. In Millions |
|
SHORT TERM BORROWINGS |
|
|
|
Loans repayable on
demand |
|
|
|
From a Financial Institution |
0.000 |
200.000 |
|
Loan from related party |
180.000 |
0.000 |
|
Total |
180.000 |
200.000 |
OPERATIONS
The year was the third year of full-fledged commercial operations for the Company. On-Highway and off highway volumes declined by 12% &15% respectively due to difficult conditions. Import content for the current year stood at 6% against 11% in the previous year, which along with other cost reduction programs helped the Company to maintain the costs close to targeted level. Cost control initiatives rolled out by the Company helped inculcate a frugal mindset across the organization, resulting in savings in fixed costs.
The Company continued its focus on lean management and has significantly reduced inventory and improved productivity rates and has endeavored to utilize its assets better. The company’s work in this field was recognized through a Runner Up award at a National level competition by CII. The Company enjoyed healthy industrial relations and continued its efforts to develop its manpower.
INDEX OF CHARGE:
|
Sr. No. |
Charge ID |
Date of Charge Creation/Modification |
Charge amount secured |
Charge Holder |
Address |
Service Request Number (SRN) |
|
1 |
10330066 |
28/12/2011 |
310,000,000.00 |
State Bank Of India |
Industrial Finance Branch, Tara Chambers, Mumbai - Pune Road,, Pune, Maharashtra - 411003, India |
B29989662 |
|
2 |
10225099 |
08/04/2011 * |
1,350,000,000.00 |
Export- Import Bank Of India |
Floor 21, Centre One Building, World Trade Complex, Cuffe Parade, Mumbai, Maharashtra - 400005, India |
B09904962 |
*Date of modification Charges
FIXED ASSETS:
·
Land
·
Building
·
Plant and Machinery
·
Computer
·
Vehicles
·
Furniture and Fixture
PRESS RELEASE
MAHINDRA GIVES ITSELF THREE YEARS TO TURN
AROUND TRUCKS BUSINESS
Last year, flanked by a group of high-level executives, Pawan Goenka, the president of Mahindra & Mahindra's automotive business, made a last ditch attempt to save the group's beleaguered truck business which had been consistently losing money.
Goenka urged the board to give him three years to bring about a turnaround. The
first task at hand was to assume full control of the businesses - Mahindra
Navistar Automotive and Mahindra Navistar Engines - after its US-based partner,
Navistar, announced its intention to exit the joint ventures because of
financial trouble in its home market.
Despite mounting losses, the board showed trust in Goenka's turnaround plan. In
December last year, at the peak of the slowdown when the industry saw its truck
sales slump 26 per cent, Mahindra & Mahindra paid Rs.1730.000 Millions to
buy Navistar's 49 per cent stake in each of the two companies. It later renamed
them as Mahindra Trucks and Buses (erstwhile Mahindra Navistar Automotive)
and Mahindra Heavy Engines (Mahindra Navistar Engines).
Nine months on and after more losses, the company has taken another step to
pull the business out of the slump. Earlier this month, it decided to demerge
the truck business from Mahindra Trucks and Buses and merge it with itself. The
move, subject to regulatory approvals, will allow the demerged business unit to
operate as an independent vertical of Mahindra & Mahindra, just like the
tractor and automotive business units.
With the merger of the truck business with Mahindra & Mahindra, assets to
the tune of Rs.2560.000 Millions, including plant and machinery, receivables
and inventory of Mahindra Truck and Buses, will be transferred to the parent
company. The losses of the truck business will help Mahindra & Mahindra
secure a tax write-off this year if the merger plan gets completed before April
2014. The merger would also help the truck business as it will enable it to
have access to Mahindra & Mahindra's financial resources.
But the road ahead is not going to be easy. Mahindra Navistar trucks have not
been able to gain traction despite being in the market for over 36 months.
Since starting commercial production in June 2010, the company has only managed
to sell 8,000 trucks. In comparison, market leader Tata Motors sells more than 10,000 trucks every month.
The company's accumulated losses also mounted to Rs920 crore as of March 31,
2013. But Goenka is not giving up yet.
"If we had wanted, we could have sold our trucks business," said
Goenka recently. He believes, the business will create a lot of value in the
long run.
"Our board has given us three years of free hand and certain amount of money. They have said make the business profitable in that time. We are not going to look at quarter-to-quarter performance," adds Goenka.
The company, which has so far invested more than Rs.8000.000 Millions on its
truck business, has earmarked another Rs.2000.000 Millions to strengthen the
product line-up. However, other players in the sector have already taken note
of its plans. Tata Motors, for instance, which is determined to guard its
market share against any slippage, intends to launch over a dozen trucks this
year. Ashok Leylandtoo is going aggressive on new launches and
product diversification. The company after reporting losses in the June quarter
is banking on its light commercial vehicle, Dost, and a new version of Stallion
trucks to shore up sales.
"With weak macroeconomic indicators and the stretched viability for fleet
operators, we expect medium- and heavy-commercial vehicle sales to remain weak
in the near-term. The recovery prospects also appear to be gradual during the
current down cycle given the surplus fleet capacity on ground which may put
pressure on new commercial vehicle sales even as freight availability
improves," said a recent report by ICRA.
Goenka is confident about the long-term prospects of the business. Part of it stems
from the good feedback from customers and dealers about the product quality,
especially about the engines which were developed jointly by Mahindra and
Navistar.
"The good news here is that the product is performing well. Nobody
complains about the product; what the dealers complain about is business
viability because they are not selling enough trucks. We are just waiting for
the industry to turn around," says Goenka.
Another pivotal point for Mahindra & Mahindra's faith in the truck business
is the structure of the Indian commercial vehicle market. Little more than 80
per cent of the domestic market is controlled by Tata Motors and Ashok Leyland.
In other words, there aren't too many players in the market, which leaves
enough room for Mahindra & Mahindra to carve out a space for itself.
According to data provided by the Society of Indian Automobile Manufacturer,
the two companies sold 177,000 trucks last year from a total of nearly 222,000
trucks.
Analysts support Mahindra & Mahindra's decision to stay put in the market.
"We expect medium- and heavy-commercial vehicle volumes to decline by
around five per cent this year and start witnessing growth from 2014-15. We
also expect gross domestic product growth to gradually start improving from
2013-14 which along with potential for further interest rate cuts would be
positive for the commercial vehicle industry," the ICRA report said.
Mahindra & Mahindra trucks at present are sold through 57 dealers across
the country. The company's sales at 2,977 units last year fell 15 per cent
compared to 3,490 units in 2011-12.
"I am quite confident that the commercial vehicle industry cannot be down
for long. Demand will improve and three years are enough to make the business profitable.
When the industry turns around and we have the new products, the business will
turnaround," adds Goenka.
While Goenka has been given a free hand to run the business, Mahindra &
Mahindra Chairman Anand Mahindra has made it clear that the group will not shy
away from exiting loss-making businesses. The company in June merged all its
component businesses into one entity and sold part of the stake to Spanish
component making giant, CIE Automotive.
"Mahindra as a group always makes some short-term bets and some long- term
bets. The board had recently reviewed how our different bets had performed over
the years. On average, we have done very well. Right now there are at least
two-three long-term bets we have on the table: Mahindra Two-Wheeler, Mahindra
Trucks and Ssangyong," adds Goenka.
MAHINDRA TO EXPORT HEAVY VEHICLES TO AFRICA
Commercial vehicle manufacturer-Mahindra Navistar Automotives Limited (MNAL), a joint venture between Mahindra & Mahindra Ltd (M&M) and Navistar Inc USA, is exploring opportunities to export heavy commercial vehicles(HCV) in Africa and South Africa. The company has plans to export HCV between 16 tonnes to 25 tonnes capacity, including tippers in next fiscal year.
The company has sold 7,000 commercial vehicles since June 2011 in domestic market. Speaking to Business Standard, Mahindra Navistar Automtives Ltd, Managing Director & CEO, Nalin Mehta said, "The product in HCV category meant for export is on testing stage and we are hopeful to commence exports from next fiscal. Initially we will export to South African countries and later on other parts of Africa."
He also mentioned that acquisition of Navistar Group’s stake by Mahindra & Mahindra in Mahindra Navistar Automotives Limited (MNAL) and Mahindra Navistar Engines Private Limited (MNEPL) would be completed within 2-3 weeks. It is worth mentioning that Mahindra & Mahindra will buy Navistar’s 49% stake in the joint venture MNAL and MNEPL for Rs.1750.000 Millions .
He also added that the Navistar Group will continue to provide technical
support for developing engines. But as far as development of commercial
vehicles is concerned, that would be doneby M&M.
On being asked about the expansion plans, he added, "We have already
invested Rs10500.000 Millions in the joint ventures, and further have plans to
pump in Rs.2000.000-2500.000 Millions over the next three years to add new
products, variants and to upgrade the existing range of products. Also, a
portion of fresh capital infusion will be utilized in capacity expansion.
Presently, the company has installed capacity of 40,000 of commercial vehicles
per month. Also, it has 10 products in its portfolio and further has plans to
add 3-4 products in next fiscal.
Mahindra Navistar which sold 7,000 commercial vehicles till now, is targeting
40,000 to 50,000 trucks in the next three to four years per annum. Meanwhile,
the company launched new MN25 Tipper with bogie suspension for the Punjab
market, which is considered as one of the potential market for the company.
Mehta said, "Punjab is very prominent market for us, We have clocked 100
plus HCV Sales in the Punjab market within a year of operation. The
breakthrough segments for Mahindra in this short span of time have been Gypsum,
Steel and Cement transportation/Cement Bulker, Construction Aggregates, Earth
Moving, Container, Food transportation (Grains/Rice/Fruits), Heavy Machinery
movement, Tip-trailers and Market load operations on various HCV
platforms."
"The Punjab Commercial Vehicle Market constitutes around 7% of the Indian
CV market and 22% of the market in North India. Mahindra forayed into the
Punjab market with its HCV range in October 2011.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources including
but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist organization
or whom notice had been received that all financial transactions involving
their assets have been blocked or convicted, found guilty or against whom a
judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on Corporate
Governance to identify management and governance. These factors often have been
predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.61.49 |
|
|
1 |
Rs.92.16 |
|
Euro |
1 |
Rs.69.62 |
INFORMATION DETAILS
|
Information
Gathered by : |
PPT |
|
|
|
|
Analysis Done by
: |
SUB |
|
|
|
|
Report Prepared
by : |
VNT |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL
CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILITY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
NO |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
DEFAULTER
|
|
|
|
--RBI |
YES/NO |
NO |
|
--EPF |
YES/NO |
NO |
|
|
|
|
|
TOTAL |
|
65 |
This score serves as a reference to assess
SC’s credit risk and to set the amount of credit to be extended. It is calculated
from a composite of weighted scores obtained from each of the major sections of
this report. The assessed factors and their relative weights (as indicated
through %) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment record
(10%)
Credit history
(10%) Market trend (10%) Operational size
(10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NB |
NEW BUSINESS |
||
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.