Tag: Hemant Sikka

Mahindra & Mahindra tractors may see another small hike in prices after a 2-2.5% increase in April

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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All automobile categories — two-wheelers, three-wheelers, commercial vehicles, passenger vehicles and tractors — saw a rise in April sales on a year-on-year basis, according to the Federation of Automobile Dealers Associations (FADA). But only tractors and passenger vehicles recovered from the jitters of COVID as sales went up by 30 percent and 12 percent, respectively, over April 2019.

Hemant Sikka, president of the farm equipment sector at Mahindra & Mahindra, which claims to have a 40 percent market share, spoke to CNBC-TV18 on what worked for the company and the sector as a whole.

‘Tractors not affected by supply-chain issues’

Sikka said the tractor industry was not affected by any supply-chain issues like some others were in the past two years. “We see stronger demand coming in from all markets, except for one or two states in the south of India. We are able to service the kind of demand that we see in the market. So, we ended the year with a very good month of March and saw the same kind of momentum in April,” he said.

“April has been the best in the history of the tractor industry. The industry clocked more than 89,000 units. The second-best highest was April 2019, which saw sales of 66,700 units. So, the industry has set up a new benchmark,” he said.

‘Took 2-2.5% price hike in April, another increase likely in 2-3 months’

Sikka said the company took a price hike on April 15 between 2 percent and 2.5 percent depending on the model. “It has played out very well in the market and got absorbed very well. So right now, we are working with this kind of pricing increase,” he said, adding the industry would also look at passing on more increases in the months to come.

“Input price inflation is still very, very high. But I am happy that we took three price increases last year, and we followed it up with a price increase early in the month of April. Now, and let’s see how it goes and maybe in the next two to three months, we should look at another small increase,” Sikka said.

The president of the farm equipment sector at Mahindra & Mahindra said the company was expecting the industry to show a stellar growth in FY23. “But the exact estimation we will be able to give out after the onset of the monsoon. But, clearly, early indications are that this will be a good year for the industry,” Sikka said.

Watch the accompanying video for more details.

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Mahindra to hike tractor prices; sees growth potential in farm equipment segment

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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[wealthdesk shortname=”M&M” isinid=”INE101A01026″ bseid=”500520″ nseid=”M&M” sector=”Auto – Cars & Jeeps” exchange=”nse”]

In March, Mahindra & Mahindra (M&M) saw a 45 percent rise on a month-on-month (MoM) basis in tractor sales. To understand the outlook buoyancy in the tractor space, CNBC-TV18 caught up with Hemant Sikka, President-Farm Equipment Sector, Mahindra & Mahindra.

Sikka affirmed that March shaped out well for the entire auto industry. Going ahead, he expects the whole tractor industry to do very well. He believes agricultural season will be very good, and he is already seeing a lot of buoyancy in the market.

“The month of March shaped out very well for the industry and especially for us in Mahindra. We did pretty well. So overall, we are seeing that the industry ended on a very good note and going forward, as we enter into this main season for the agriculture sector, we are looking at a very good season ahead of us,” he said.

He anticipates a lot of growth potential in the farm equipment segment within M&M.

“The farm implement segment is a big thrust area for us; we believe there is a lot of growth potential there for the farm equipment sector for us to grow within M&M,” he added.

“We are seeing a lot of buoyancy in the market. We are seeing renewed demand for tractors coming up, very strong production we are seeing and this is giving us a lot of confidence that going into this very important season for the tractor industry, I think the whole tractor industry will do very well,” he added.

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On price hikes, he said that the company took three last year and plans to increase prices this year as well. He explained that since commodity prices have been on a tear in the last 18 months, another price hike will happen in the next few weeks in the tractor segment.

“The commodities have been on a tear for more than 18 months. We were quite okay getting into this New Year, but we have seen that the prices have not moderated; the commodities are still on a very strong roll-up and all of this cannot be passed on in one go,” he mentioned.

“So, we took three price increases last year, we intend to take more price increases this year to pass on this huge inflation that we are seeing on the input cost. We have to space it out because we also have to see that our farmers are able to absorb these increases, but I think overall, we have played the price game in a very mature way passing on three times last year and again, another price increase may happen in the next few weeks,” Sikka said.

Also Read: BofA Securities raises target price on M&M, here’s why

Watch the video for the full interview.

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M&M eyeing price hike in November; says company’s tractor market share at 40% plus

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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According to Hemant Sikka, President – Farm Equipment Sector at Mahindra and Mahindra (M&M), the month of October has shaped up quite well for the tractor industry.

“We are now looking forward to having a good November,” he said.

The company is almost 2 percentage points higher on market share compared to last year. “At YTD level, our market share is upwards of 40 percent. Both our brands Mahindra and Swaraj are doing very well in the market and we hope to continue to do well,” he said.

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The company has taken a lot of efforts internally within the organization to cut costs. All that effort has yielded results for the company, in its effort to maintain margins.

“I won’t be able to talk anything on margins, we are in a silent period but whatever guidance we have given to analysts, we will be on track for that,” Sikka shared.

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M&M has recently launched a new tractor, Yuvo Tech Plus, and it is getting a good feedback from all customers.

“As we scale this up, we will still have a better leverage on the market share,” he stated.

This time there was deficient rainfall in the month of August but September had a bumper rainfall and till end of October, many states were getting massive rainfall.

“As a result, the harvesting season has got shifted by 2-3 weeks. So, the rabi season will also be shifted by about 2 weeks. This whole backended rainfall is very good for rabi crop,” he explained.

Also Read: Tractorisation in India high, but agriculture mechanisation low

M&M has taken three price increases so far this year.

“This time, the commodity inflation has been unprecedented. We decided that we are going to pass on the increases in small batches and this strategy has worked very well for us. We took an increase in January, then in April and another one in July. So three increases we have already taken and we are now preparing for another increase in the month of November,” he explained.

In terms of production cut, he said, “Thankfully, the tractor industry is not affected by the chip shortage and that is why the whole industry has ramped up very well from the COVID lockdowns that we had last year. Our tractor business did not take even a single day’s cut. We are still running at our full production level.”

For the full interview, watch the accompanying video.

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M&M bets on upcoming festive season; expects to maintain margin

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Most of the states are gearing up for the festive period, said Hemant Sikka, president – farm equipment sector, Mahindra and Mahindra (M&M), in an interview with CNBC-TV18.

“The whole industry is very well stocked. Last time the industry was very light on stocks and as a result there were losses on retail and billing. This time we are well stocked up, we are very happy with the levels of production and supply chain that we have achieved and we are very optimistic that the festive season, September, October, November will play out very well for us,” he said.

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He expects the industry to do very well during festive season. “We don’t have issues on stocking, we don’t have issues on supply chain, the sentiment is good, crop prices are holding up very well, so there is no reason to believe that this festive season will in anyway be less than last year’s festive season,” he explained.

August has traditionally been a low month for the tractor industry, however this time in 2021, the August numbers have held up very well.

“This August was more than 20 percent higher than the average of last five years,” he said.

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The industry has done very well and M&M has done better than the industry. “As a result, we have gained market share this year compared to last year,” he added.

Despite semiconductor issues, the supply chain is doing well. “Thankfully, the tractor industry doesn’t use semiconductors. So, we don’t have issues on supply chain. It is very smooth,” he shared.

“August was our highest ever production month in the history of M&M. That means the operational issues are behind us. The sowing is very good, that is one positive that I look forward to. It is 1 percent less compared to last year but it is better compared to last five years’ average,” he stated.

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The company has taken three price increases since January 1. “We took a price increase on January 1, we took another price increase on April 1 and we have taken another price increase on July 1. Beyond that, we will have to look at how the festive season passes out and overall, we have been able to manage our margins very well. We will still maintain our margin range that we have always done and target the industry-leading profitability that M&M has always delivered,” he said.

For the full interview, watch the accompanying video.

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Demand should return in June if second COVID wave peaks by May-end: M&M’s Hemant Sikka

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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As India’s COVID-19 cases spike as the country battles the second wave of the pandemic, almost all states have some fresh restrictions in place.

Hemant Sikka, President – Farm Equipment Sector at Mahindra and Mahindra (M&M) discussed the demand picture in this environment as well as the outlook ahead of the monsoon season.

He believes that demand will come back in June if cases peak at the end of May. “If we are able to see cases go down by end of May, the demand should come back in the month of June,” he stated.

On the financing side of the supply chain, things are looking good and are holding up very well, he shared.

“However, we are seeing the disruption of the supply chain not because of labour but because of oxygen availability. Our suppliers are impacted, some of the operations we have moved away from oxygen to other gases, however, there are certain operations that we cannot move. So to that extent, the supply chain is disrupted,” he further mentioned.

Ramp-up of the production will be quick once the oxygen supply is restored since there is no complete shutdown of the plant, he said.

The COVID second wave is much deeper this time and that is putting a strain on people. “Agricultural parameters continue to be strong. All this is going to put a lot of cash into the hands of the farmer, however, people tend to hold cash for any eventuality. So that parameter will play out. However, the COVID wave is playing out and that is a matter of concern for us,” he mentioned.

For the full interview, watch the video.

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M&M looking at a full blast of production over next 3 months, says Hemant Sikka

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Tractor sales in August indicated a very strong growth, up 65 percent year-on-year for Mahindra & Mahindra (M&M).  Hemant Sikka, president-farm equipment sector at M&M remains positive amid a bumper harvest and bountiful monsoon while adding that the production started from mid of May and plants are running at 100 percent capacity.

Sikka further said that August was a very good month in terms of finance availability. Speaking about the production, he told CNBC-TV18, “In a pandemic year when you are facing new and fresh issues every day, it’s difficult to give a guideline for the entire year. Therefore, all I can say is that for the next 3 months we are looking at a full blast of production.”

“In the last one month the supply situation has eased a lot and that’s why all our plants are able to run at 100 percent capacity and we are making few improvements to make sure that we do a little better than that,” he added.

On the festive season front, Sikka said, “All the suppliers have ramped up well. However, one or two suppliers face issues because of the COVID-19 case being detected, but now the processes are well set, people are much aware. So on the back of low stock, supply easing we are looking at a good festive season ahead of us. We just have to make sure that the situation doesn’t worsen off in terms of COVID-19 from here.”

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Mahindra & Mahindra announces succession plan, Wadhera to step down

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Mahindra & Mahindra on Monday announced the succession plan for its top executives. The auto major said Rajan Wadhera will retire and step down from his executive role as President Auto Sector.

The company said in a regulatory filing that S Durgashankar will have an “enhanced role” as Group Controller of Finance and Accounts. “He will work closely with the CFOs of all Group businesses to ensure appropriate controls and governance and will continue to oversee Secretarial. He will report to Anish Shah,” the company said.

Hemant Sikka will Head the Farm Equipment Sector. Veejay Nakra will be appointed CEO of Auto Division and will have operating responsibility for PV and entire CV business with P&L accountability, except for the Product Development Process.

R Velusamy will be appointed Chief of Global Product Development (Automotive). Vinod Sahay will be appointed as Chief Purchase Officer of AFS.

Sikka, Nakra, Velusamy and Sahay will report to Rajesh Jejurikar. Rajeev Goyal will be appointed as CFO of AFS. He will have dual reporting to Rajesh Jejurikar and Durgashankar.

Rajeshwar Tripathi will be the Chief Human Resources Officer for AFS. He will have dual reporting to Rajesh Jejurikar and Ruzbeh Irani.

The Agribusiness headed by Ashok Sharma will move from AFS and report to SP Shukla, who will also continue to head the Aerospace, Defence and Steel Sector, reporting to Anish Shah.

This is after it was announced that Anand Mahindra will step down as the Executive Chairman of the board but will continue as Non-Executive Chairman of the Board of Mahindra & Mahindra Ltd. with effect from April 1, 2020.

Besides, it said that Pawan Goenka will be re-designated as MD and CEO with effect from April 1, 2020, till his retirement a year later.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow