Thank you very much. You know, when you think of legacy Indian corporate brands and groups, you might end up thinking of groups that are perhaps past their heyday or have seen the best of sunrise. But the Mahindra Group is completely different. It's a story of reinvention and that's why Anish, it gives me great pleasure to have you here with us. Tell us, how does the Mahindra Group continue to rise and rise? It's a particular brand that you have internally coined and continue to reinvent itself from tractors to information technology and in so many other sectors including EVs.
Siddharth, good evening. Pleasure to be here. The Mahindra Group is a story about purpose. And I'm going to start with an advertisement that our founders placed in the newspaper in 1945, 80 years ago. The advertisement talked about dignity of labor. It talked about neither caste nor creed nor color shall come in the way of a meritocracy. It talked about opposing antisocial trends. It outlined the principles under which the company was founded. It did not talk about products of a company. That was the beginning of purpose. That purpose translated into our rise philosophy in the early '90s. And our leaders have lived that purpose through many years. And that is the reason the group continues to rise because we've always believed that if you lead with purpose, profits will follow. And investors have often asked me, we care about profits and why don't you focus on that first? And our response to them always is that yes, you care about profits, but we care about purpose. And what you have seen is that we have delivered significant profits over time and that is driven because of the trust that's created, the trust with every stakeholder, with our associates, with customers, with the government, with everyone else. And that really is what has helped continue help us continue to rise.
Anish, therefore, what is the unifying theme across all these diverse businesses that you are in in terms of the core corporate philosophy?
The unifying theme is about talent and about enabling each person to contribute their best to the company, about giving them the freedom, the empowerment, and which is why we always say that it's our teams that really drive results for the company. And that's really the power that we have.
Since we're talking about the making of a future-ready conglomerate and with all that uncertainty, I guess that process is continuous. It's not a 5-year plan. I think plans may be changing every 5 days. Since you've taken over, tell our audience here, what is that one big thing that you can share with us that you've kind of set in motion to drive even greater adaptation towards being a future-ready company?
Siddharth, I would actually say that we've been continuing to look at the future and prepare for it for many years. I go back to the early 2000s when the Mahindra Research Valley was put in place by Anand. And that is the secret sauce for our vehicles today. That's the R&D that goes behind everything we do. And similarly, it's very heartening to hear that we've done well and we've reinvented ourselves. But we have been reinventing ourselves for many years and it is that passion that our leaders have had over the years that brings us to where we are today. We've got a unique culture which is a blend between a caring culture and a performance-oriented culture. And therefore, when I came in as the first non-family member after 75 years, with Anand, the plan was to ensure what we call continuity in change. And there had to be a set of things that we kept constant and some things that we changed. And what we did change was bring in three behaviors that we wanted each of our associates to drive. One is being bold. And that's something we've done in everything that you've seen, which is set higher targets, in some ways aim for the sky, but be realistic and grounded in doing that as well. And giving our leaders the freedom to do that, the courage to do that. The safety net if something doesn't work as it was supposed to. That's for being bold. The second is about being agile. We realize that in the world today, a large conglomerate will fall in its own trap and its own bureaucracy if it's not agile. We are competing with startups. And for that, we have to be able to drive that level of agility in decision-making. And there have been a number of key decisions that some of our leaders would tell us that we made literally in 5 minutes and we've gone ahead with it. And the third is about being collaborative. As a federation, we've given freedom to our leaders, but we also emphasize that for us to be able to harness the power of the group, we have to work together. We want to help each other succeed. And that collaboration is most important. So, bold, agile, and collaborative are the three things that we've emphasized as we've continued this journey.
Anish, when I have reported on large conglomerates that were set up by charismatic founders and then maybe a generation, second at best third generation, and then professional managers have come in. Like you said, you are the first in 75 years. Two parts. How does a professional manager ensure that that entrepreneurial streak of the founder continues through the organization? And second, how do you get acceptability for yourself because you don't share the same surname?
I think great questions, Siddharth, both of them. I'll take the second one first and that was actually much easier than I had expected. I had joined the group 6 years prior to that and I would just credit the people in the group, a very, very warm set of people, very friendly, and I felt accepted and at home on day one. So, from that standpoint, while it's not quite the answer to your question, to me it never really felt as an issue at all. The first one, how do you take forward not just the entrepreneurial spirit, but I would add to it the values as well because that is very important. And there I can tell you that there were a lot of questions and there were a lot of people who were looking at me coming in and saying, 'Will we still be the same Mahindra that we were before? Or will we become a GE?' I'd spent many years at GE and that was an actual question that I had heard from the grapevine saying that was a question that was coming up. That you'll bring the GE culture in and we would become only performance-oriented. We would stop caring in that sense. And that was a real concern that people had. So, that was something that literally took 2 or 3 years to be able to convince everyone by our actions. We could say whatever we wanted, but that was just words. So, our actions had to be such that they showed purpose, they showed caring. And that's when people realized that that continuity in change is important to us and that we will continue with that. At the same time, the entrepreneurial spirit must stay. And one of the things that we've seen about entrepreneurs is that they don't care about quarters that the stock market cares about. And that is one that I've had to adapt and I do tell our investors that don't look at quarters for us. Right? We don't care about quarters. We're building a business here for the long term. Decisions we're making are about 15, 20 years in future, but the value creation that we will have for investors in 15, 20 years. Now, we've been lucky that we've done very well every quarter for the last 5 years. The real test will come when we haven't. So, I'll reserve the rest of my answer when that test comes.
We hope that test doesn't come for your sake and for your shareholders. In case you're wondering why we're talking only about sort of management and core corporate issues and not about contemporary issues, because we're coming closer to the finale of this evening, which is India's best CEOs that we are recognizing. And that is why I wanted to focus on management and how it's to be in the corner office. But Anish, given your standing as an industry leader, the audience here and those who are watching us would also expect me to ask you about contemporary issues. So, I'm going to dive into the great energy disruption. You're an automaker as well. So far, petrol diesel prices haven't changed. There is no impact on auto directly from that point of view, but the world energy as we know it has been disrupted. Your first thoughts, how serious and severe is this crisis?
So far, it's under control. And I would give a lot of credit to the government for this because they've acted very quickly. We're aware of a number of deliberations they've had and the ability to bring in more ships, the ability to allocate LPG very quickly, and a number of other decisions have helped keep things stable. At this stage, we are not seeing any impact on demand. We are not seeing any impact on production, either. And that's across a large group that plays in 70% of India's GDP. So, today, I would say that we are still good. We do need to be prepared, though, if the war continues much longer. And if the Strait of Hormuz continues to be closed and we don't get the ships that we need to, then there could be a greater impact. But at this point in time, yes, there's been a lot of scrambling our teams have to do, a lot of work that they've had to do to address various issues, including tracking LPG availability for 400 suppliers every morning. But so far, it's been good.
What about second-order, third-order effects, particularly from your input supply chain? We are seeing a cascading impact across sectors. There are reports about how semiconductor production could impact it because of a helium shortage. And there are tons, you know, including the rubber for tires. What's your sense? What are your suppliers telling you?
At this point, again, everyone's gearing up for the worst, but we are not seeing that direct impact as yet. That's also a function of capacity or for raw material inventory that has been stocked up for some time. But I would say a lot will depend on how long the war lasts and the free movement of ships that comes in. If that continues to happen, then I think we'll be fine. If that doesn't happen, then we would have to gear up for some trouble along the way. What happens when inventories start reaching critical levels? We'd have to stop production at that point in time, right? So, at this point, at least our raw material, our finished goods inventory is fairly reasonable as well, especially for tractors. For auto, it's a little lower because demand has been very high. And that has been continued to be high for us for the last few years. But when inventories start reaching these critical levels, we have to do what we did in COVID. But even through COVID, our teams were very agile in trying to find different solutions. And in some ways, I look back at COVID and look at that as a huge learning ground. If we had not gone through COVID, today would look very, very difficult. Not just today, all the crises we faced over the last couple of years, including rare earth, including crisis on memory chips, and everything else. We've been able to live through that, and I look at this in the simplest form as this game I used to play as a child called Whac-A-Mole, where something popped up and you knock it down and something else pops up. That's exactly the world that we are in today. Something keeps popping up and you put one thing under control and something else goes out of control.
