Mahindra's 77th Annual General Meeting | Anand Mahindra | Mahindra Group

A very good afternoon to you all, ladies and gentlemen. I welcome you all to the 77th annual general meeting of the shareholders of the company. It's my privilege to address all of you as the chairman of Mahindra and Mahindra Limited.

I'm happy to announce that the board of your company has recommended a dividend of 16.25 rupees, which is effectively 325 percent, for your approval. Your company has approved the Q1 FY23 results, which have shown the continuity of our growth path. I won't dwell upon them further as they are already in the public domain.

During the year, the sustainability initiatives of the company drew recognition by BII investment in the newly incorporated Mahindra Electric Automobile Limited and International Finance Corporation in Mahindra Last Mile Mobility Limited. IFC marks this investment as a significant step towards scaling up domestic production of electric vehicles to drive electric vehicle adoption across India and also to help the government deliver on its climate targets. We are also playing a key role in decarbonizing Indian cities by providing clean mobility solutions through electric vehicles and a much-needed related ecosystem for accelerated adoption.

Your company was included in the world index list of companies in the Dow Jones Sustainability Index for the second consecutive year.

I strongly feel that pictures represent the content and intention more clearly than words, so I'm going to continue with this approach and move ahead with my presentation.

Now, as I said earlier, the case of Mahindra was the last living link with the early days of our company. Indeed, he was the torchbearer of a precedent that had been set right at the time of the founding of M&M in 1945.

Today there is a lot of talk about the necessity for a company to have a purpose, and companies go to great lengths to find and articulate a purpose. But in our case, we were born with a purpose. The company's first advertisement came out on 8th November 1945, and it didn't talk about a product or a service. Instead, it talked about the ideals with which our company, Mahindra and Muhammad as it was then known, was clearly founded.

That ad sets out the values we believe in: the dignity of labor, merit as the sole criterion for advancement, a strong national outlook. And there's one sentence that sums it all up. That sentence is addressed to the people of India: 'We promise a better land for you to live in and a healthier, happier land for you to enjoy.' It's a promise to the people of India that our company's success will always be built on a bedrock of values, integrity, ambition, and a very clear goal of contributing to the community and to the country.

In his beliefs and actions, Keshav Mahindra dedicated himself to maintaining the principles laid down in that first advertisement. For me personally, those principles have always been a north star. And Anish has recommitted himself to these principles, so we are in the happy position of combining continuity with change.

Being perceived as a company with values, integrity, and purpose also gives us very solid business advantages, make no mistake. Firstly, it attracts the right partners, particularly from countries that have strict laws against corrupt practices. From the early days of partnering with Willys Jeeps to our latest international partners, OTP, BII, IFC, we've always partnered with marquee names in international business because of our impeccable reputation.

Secondly, it attracts the best talent. Mohit Kapoor, our group CTO, said that at first he wasn't entirely sure about joining the Mahindra group when he was approached for the job. However, during the course of interviews, he heard about the group's origins and its first advertisement, which emphasized purpose above profit and the dignity of the individual. That was what convinced him to join the Mahindra group. Managers value working for a company that never asks them to go against their conscience, and young people find it inspiring to work for a company that seeks to add value to society as well as to itself.

The past few years have been full of ups and downs: financial turmoil, geopolitical uncertainty, climate change, natural disasters, and of course the pandemic, which all took their toll on businesses everywhere. In spite of all this volatility, we have had great financial results. Over the last couple of years, we've taken a good hard look at capital allocation and sharpened our strategies for growth. We've clearly identified the businesses that we are betting on for future growth and nurtured them, and these strategies are paying off.

We said we would reach 18 percent return on equity in three to five years, and we achieved it in 18 months. We have just declared the highest dividend in our history. Our share price has gone up five times since the pandemic years. So very clearly, it's been a satisfying year.

For M&M, the two magic mantras for the immediate future are scale and synergy. And we've identified the four main business areas and the nine other businesses with high growth potential. The first objective now is scale, scale, and more scale. Each growth gem, so to speak, has taken up the 5x challenge, which means our businesses have to grow 5x in the next five to seven years from where they are today in terms of market cap. I'm confident that the next few years will see an astounding pace of growth.

The Mahindra group has another brahmastra, a secret weapon, and that is the power of synergy. Our unique federated structure empowers every business to pursue its own growth goals while freely drawing upon synergies that arise from companies all working in collaboration with each other. Synergies of scale, synergies of purchase, synergies of customer bases, synergies of technology—all of these positively impact the bottom line. With scale and synergy as our goalposts and with our clarity of purpose, I believe we are all set to pole vault into the future.

Now, this image of the pole vaulter really resonates with me, and there's a story behind it. In 2002, M&M was in a bad financial trough, so we called a group-wide conference called the Blue Chip Conference, and this pole vaulter was the logo of the conference because it symbolized our determination to engage all our energies to soar over our difficulties and to achieve business success. And succeed we did. Indeed, we have been the best-performing stock on the Nifty since 2002. Very few people know this.

We created the pole vaulter logo in 2002, as I said, but I find that that metaphor is even more apt in today's times because India is ready to pole vault. What does the pole vaulter do? To put it very simply, he or she takes a run-up to the jumping point. The faster he runs, the more kinetic energy he generates. And then he plants the pole firmly into a box embedded at the foot of the jumping point. The firmness with which he plants the pole in the box is crucial to success. Then, using the help of the pole, he jumps, converting the kinetic energy into potential gravitational energy to clear the bar and land successfully on the other side.

Multiple factors need to converge for a successful pole vault. The run-up must be at the right speed, the pole has to be firmly planted, the kickoff needs to be perfect. And there have been times in the past when India has appeared to be on the verge of a very successful pole vault, but somehow or the other everything did not converge, and we disappointed a watching world. Today, however, all the positive factors are converging.

We are well into the run-up. The Indian economy is growing at seven percent when many countries are heading towards recession. Geopolitical tensions with China are pushing many manufacturers in India's direction. But that isn't the only reason; economics obviously also enters into it. India today actually has the cheapest manufacturing costs in the world. It's not surprising that of late, companies of the stature of Apple, Samsung, Boeing, and Toshiba have shifted a significant amount of their manufacturing activity to India. And it's not just the Western nations. Would it surprise you to know that the second largest investor in India is Singapore? We are within pole-vaulting distance of being able to challenge China as the factory to the world.

Suspicions of China's ambitions and post-COVID supply chain disruptions have also worked in India's favor, and we're well placed to take advantage of this. We've massively improved our performance on the World Bank's Logistics Performance Index. Our trust in infrastructure is paying off.

The world functions digitally today, and we are in an enviable position on digital infrastructure. The cost of one GB of mobile data in India is the cheapest amongst major economies, and so is the cost of mobile internet. We are 73 times cheaper than South Korea, which has the highest cost of mobile data amongst major economies.

So I believe India is generating enough kinetic energy for a spectacular pole vault takeoff. The next step, as I mentioned earlier in the pole vault, is using the box to its fullest advantage. Our box is our increasing stature on the world stage. The world is at a point where China's political ambitions are being viewed with alarm, and India is seen as an obvious buffer and counterbalance. There are many countries rooting for us today. Our foreign policy stands out. We have handled the Ukraine crisis well. We are one of the few nations whose economy and oil supplies are not affected, and we have pulled off the feat of being seen as a helpful and neutral party.

We are contending for political leadership in South Asia. Leadership of the G20 has amplified our voice in the climate change and environment scenario. We are, frankly, more respected internationally than ever before.

The third stage in pole vaulting is the takeoff, using the strength of the pole. And our pole is our democracy—raucous, chaotic, and vibrant democracy is the pole that will convert the kinetic energy of 1.4 billion people into the gravitational energy that we need to hold higher, faster, and stronger.

Ladies and gentlemen, the important factors are in place, and India is ready to pole vault to the top.

On a lighter note, people in our company have always said that M&M's horoscope and India's horoscope are intertwined, starting with our birth on Gandhiji's birthday, October 2nd. Our fortunes and India's fortunes have always seemed to be interlinked. India is ready to pole vault, and so is your company. And I'm optimistic this year will see the beginning of a new and exciting chapter in our company's and our country's saga.

As I conclude, I want to express my gratitude towards all our stakeholders for keeping faith in the Mahindra group and the company for more than 76 years, and many more glorious years to come. We will certainly ensure our commitment to a stakeholders-first approach and also conduct our business in a sustainable manner to ensure value creation for all.