The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Kumar Rakesh - BNP Paribas, Research Division - Analyst
: My first question is to Dr. Goenka. You were quoted in the media articles suggesting that BS VI transition could be hit because of the coronavirus
impact with the supply chain getting hit. Can you help us understand which specific BS VI component supply is getting hit? And you have a fair
representation at SIAM. Do you see other OEMs also struggling with the same challenge?
Question: Kumar Rakesh - BNP Paribas, Research Division - Analyst
: My next question is around the new tractor platform, which you talked about is under development. Can you help us understand which specific
category you are looking at getting that...
Question: Gunjan Prithyani - JP Morgan Chase & Co, Research Division - Analyst
: I had a few follow-ups on SsangYong. You mentioned that the infusion could come through external third-party or the -- or by M&M. Now by third
party you mean are you open to some strategic stake sale there because those were the kind of news reports also circulating in December. If you
can share your thoughts there? And on the write-off that you've taken in this quarter, now if I look at the investment here, it is about INR 2,400
crores, right? After taking INR 600 crores, I mean, it's not really mark-to-market to the current stock price. So what has been the thought process
around INR 6 billion write-off?
Question: Gunjan Prithyani - JP Morgan Chase & Co, Research Division - Analyst
: Okay. Are there any conversations which are -- as part of this 3-year plan, are there conversations underway where you're looking at strategic sale?
Question: Gunjan Prithyani - JP Morgan Chase & Co, Research Division - Analyst
: Okay. Got you.
without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its
affiliated companies.
FEBRUARY 11, 2020 / 8:30AM, M&M.NSE - Q3 2020 Mahindra and Mahindra Ltd Earnings Call
Vankipuram S. Parthasarathy - Mahindra & Mahindra Limited - Group CFO, Group Chief Information Officer & Member of Group Executive Board
Okay. So this is a very involved question, which -- when we look at prices. So on one hand, I told you in my opening remarks that we think the
business case not only covers the new investment but also all the past investment and good could give return. So the business case is positive on
one hand. And then the market price is showing stress, right? So we have to take both of these into account in order to arrive at a conservative
basis. On one hand, you can say, no impairment required because the business case is positive. On the other end, you say market price is what it
is. So you put all this into the boiling pot and then you kind of appear, what is that, conservative provision that I should take, and then you have
auditor also agrees with you, and that's the figure you take. But your assessment is right at INR 2,450 crores when we knock off, it still is about 25%
to 30% higher than the current market price. Okay?
Question: Gunjan Prithyani - JP Morgan Chase & Co, Research Division - Analyst
: Sure. And the other thing that you mentioned, CapEx rationalization and cost is in our control. Now, you have some assessment on what is going
to be the cost saving and the savings on the CapEx side. Do you think that with those two -- keeping the volume aside because that's something
which is going to depend on how the global markets do as well as some of the export markets where things haven't really changed in last 1 year.
So I'm just keeping the volume variable aside. Do you feel confident that with the cost and the CapEx initiatives, you would be able to reach a cash
breakeven sooner enough?
Question: Gunjan Prithyani - JP Morgan Chase & Co, Research Division - Analyst
: Sorry, I missed that. How big is that -- material costs I got, $90 million, but...
Question: Gunjan Prithyani - JP Morgan Chase & Co, Research Division - Analyst
: Okay, got you. Just last one question, very short one. On the farm business, again, the inventory correction was taken last year, from what I recall.
Then what really is the issue still there? And how confident are we of a breakeven on the farm side -- overseas farm subsidiaries next year?
|
