However indisputable might be Mahindra’s leadership intent, the truth also is that striving hard to break beyond past estimates, Anand Mahindra has bet upon a few areas in recent times, which might either succeed in achieving the visionary targeted result for the group or could hit the group situationally extremely hard. Be it the $625 million acquisition of the troubled Satyam in April 2009, which made this conglomerate the de facto #4 in the IT sector, or the IPO of Mahindra Holidays & Resorts in June 2009, that was oversubscribed 10 times over, Anand Mahindra’s recent leadership charge for his $6.7 billion brigade is a brilliant case study that is in the historic making.
Truly, as far as Mahindra Group’s profit margins are concerned, the Q3 FY2009-10 results are not quite a treat for the onlookers. During the quarter, the group’s operating margins dipped by 2% (at 14.54% of revenues) as compared to the previous quarter. This disclosure led to a 5.5% dip in the company’s share price, which closed at Rs.1,071.25 on January 25, 2010, the day the Q3 results were announced, thereby marking the biggest slump at the bourses for the giant over the past five months. Yes, one of the prime reasons for the aforesaid fall in profitability was the rise in commodity prices, which over the past quarter, have increased by a considerable 1.7%, thereby affecting the group’s bottomlines directly; but a focus was also subsequently raised by the industry and even competitors on whether Mahindra was, or was not, prepared for the more than expected cost pressures (Shashank Srivastava, CGM, Marketing, Maruti Suzuki, while adding that Mahindra is currently one of the toughest competitors that Maruti has in the Indian market, shared with B&E, “Anand Mahindra has built a very strong organisational structure within the group, but what fascinates me most are the experiments that the company has done over the past years. For instance, in the case of its auto business, be it the Xylo or the Logan, both of them have helped the company’s image grow beyond that of just being a Jeep-maker in the country.”) Especially because Anand Mahindra has traditionally espoused the Welch way of being amongst the top within their operational sectors and of not settling for anything less (“We have always aimed for the No.1 or No.2 spot in the segments that we operate in...” Anand Mahindra tells B&E).
Truly, as far as Mahindra Group’s profit margins are concerned, the Q3 FY2009-10 results are not quite a treat for the onlookers. During the quarter, the group’s operating margins dipped by 2% (at 14.54% of revenues) as compared to the previous quarter. This disclosure led to a 5.5% dip in the company’s share price, which closed at Rs.1,071.25 on January 25, 2010, the day the Q3 results were announced, thereby marking the biggest slump at the bourses for the giant over the past five months. Yes, one of the prime reasons for the aforesaid fall in profitability was the rise in commodity prices, which over the past quarter, have increased by a considerable 1.7%, thereby affecting the group’s bottomlines directly; but a focus was also subsequently raised by the industry and even competitors on whether Mahindra was, or was not, prepared for the more than expected cost pressures (Shashank Srivastava, CGM, Marketing, Maruti Suzuki, while adding that Mahindra is currently one of the toughest competitors that Maruti has in the Indian market, shared with B&E, “Anand Mahindra has built a very strong organisational structure within the group, but what fascinates me most are the experiments that the company has done over the past years. For instance, in the case of its auto business, be it the Xylo or the Logan, both of them have helped the company’s image grow beyond that of just being a Jeep-maker in the country.”) Especially because Anand Mahindra has traditionally espoused the Welch way of being amongst the top within their operational sectors and of not settling for anything less (“We have always aimed for the No.1 or No.2 spot in the segments that we operate in...” Anand Mahindra tells B&E).
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