- “India an attractive place to be; CEOs eager to learn more”
- “Looking at generative AI projects across multiple businesses”
Niraj Shah discusses India’s consumption, supply chain, manufacturing, and AI plans with Mahindra Group's Anish Shah. #NDTVProfitAtWEF
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- “Looking at generative AI projects across multiple businesses”
Niraj Shah discusses India’s consumption, supply chain, manufacturing, and AI plans with Mahindra Group's Anish Shah. #NDTVProfitAtWEF
--------------------------------------------------------------------------------------------------------------------
For more videos subscribe to our channel: https://www.youtube.com/@NDTVProfitIndia
Visit NDTV Profit for more news: https://www.ndtvprofit.com/
Don't enter the stock market unaware. Read all Research Reports here: https://www.ndtvprofit.com/research-reports
Follow NDTV Profit here
Twitter: https://twitter.com/NDTVProfitIndia , https://twitter.com/NDTVProfit
LinkedIn: https://www.linkedin.com/company/ndtvprofit
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TVTranscript
00:00 Well day four of the World Economic Forum and a lot has happened over the past three days. So who better than somebody who's
00:05 well the Group C of
00:08 MNM, Dr. Anisha and of course the head of FICCI to try and tell us what is he made of the last three or four
00:13 days that he's been here. Dr. Shah, thanks for taking the time and speaking to us.
00:17 Very happy to be here. It's been an excellent few days. I must say that
00:22 the view on India is very positive across the board and
00:27 the India delegation has done a great job in portraying India extremely well and more realistically also.
00:34 India stands out in the world as a shining star at this point in time.
00:39 A number of CEOs who have met over the last few days
00:43 are keen to know more about India. Some who are not in India want to come to India.
00:47 Those who are there are looking to expand further and
00:50 it's therefore a very positive place for us to be.
00:54 Yeah, so that's what I would love to know because for everybody who's been here the Promenade shows the state pavilions, company pavilions, etc.
01:01 What is not known is the kind of conversations that are happening and you made up an interesting point about CEOs not present wanting to
01:07 come to India and CEOs already present wanting to deepen their presence. Give us a flavor of that.
01:11 I think there are a few things driving it. First is India starting to stand out as a destination for supply chain.
01:17 In some cases it may be a de-risking from China. In some cases
01:22 I think it's more India standing on its own as an attractive place to be.
01:25 The second is the India market. I think people are starting to see that now.
01:30 The consumer in India is growing rapidly.
01:34 Consumption is going to grow significantly.
01:37 There is a concern in people's mind as to how do we compete in India.
01:40 And
01:43 With the locals you mean?
01:45 We've seen foreign companies succeed in India and do very well and we've seen foreign companies not succeed in India.
01:51 And so therefore it's rightly a question in their mind saying what are the lessons we learn from folks who've been there in the past?
01:56 And how do we learn from folks who succeeded there and come in there and do that?
02:01 So I think they're thinking about the right way, but they're thinking about it as a place for supply chain and as a market.
02:06 Okay, and is the need to your mind as well because the Indian consumer is yours as well,
02:13 obviously so, but to your mind too and to your best estimate in the minds of the global guys,
02:19 is the nature of the Indian consumer changing because we're seeing this whole conversation about yes, the K-shaped recovery,
02:26 but also the upper end of the crust being
02:29 extremely strong across multiple consumption buckets as well. How do you think about it?
02:35 How do you think the global corporations think about it? I don't think the nature of the consumer is changing.
02:40 Different segments in the market will sometimes show greater strength versus less.
02:45 I think the Indian market overall has shown a lot of strength across segments and
02:51 you may see certain pockets where it may be flat versus last year, but that's not necessarily a bad thing
02:57 for a short time period, especially when you had multiple years that have been very good.
03:02 So it's a question of what is a time frame that you're looking at?
03:06 And therefore even in the discussions that I've had with again a number of global CEOs, they're looking at it for the long term.
03:13 And that's the right way to look at it. And I do think it's a big positive for India.
03:17 We want more companies to come in and invest in India. That's going to make India stronger.
03:20 As a
03:23 domestic manufacturer, we benefited tremendously from
03:26 the auto industry being extremely comparative over the last 25 years.
03:30 And I say we benefited because we make far better cars today than we made 25 years ago.
03:34 And if we didn't have competition, we probably wouldn't make that many, you know, that bigger difference.
03:39 So that competition has spurred us to be a lot better.
03:42 We have the confidence that we can fight
03:44 all the global players in India.
03:47 And
03:49 therefore it just helps the market expand a lot more.
03:51 Manufacturing in India has to play a much bigger role. And if you look at the Prime Minister's vision around Vixit Bharat for
03:59 2047, if you look at manufacturing being 25% of the economy by that time, it has to grow 16x in the next 23 years.
04:08 And for that to happen, we do need to have strong global players in India.
04:13 We do need to have strong domestic players make in India for the world.
04:17 All of that has to come together for us to achieve the goals for Vixit Bharat and it is eminently feasible.
04:22 You are at both ends of the spectrum, services and manufacturing.
04:25 Everybody says how the past decade was services, this decade will firmly belong to manufacturing, even the services will be there.
04:32 You second that? I would say it will belong to both manufacturing and services.
04:37 We have a strength in services. It's something that we should not give up.
04:41 And we continue to evolve our services businesses very well. So I think it's going to be a combination of both.
04:46 Okay. One question that I've asked everybody is
04:50 this higher for longer
04:54 rate scenario. If anything, the recent data from the US seems to suggest that maybe the belief around rate cuts coming in
05:02 earlier in 2024 might have gotten delayed at the global level. India has a separate case in point.
05:07 The RBI Governor told us about his views as well out there. What is your sense of
05:11 higher for longer rate scenario impacting corporations across the world, both on of course debt servicing,
05:18 but also on project IRRs and multiples?
05:20 See, first is inflation has to be contained.
05:23 And
05:25 if you look at the short term view and say I want lower rates, but inflation starts going out of control,
05:31 that's not a positive scenario for any economy. Sure. And that is where we would give the RBI a lot of credit for acting proactively
05:38 to contain inflation.
05:41 I would not be want to go out there and say you need to start lowering rates now.
05:46 I think it has to be done in a measured way when we are certain that inflation is contained.
05:51 Today in India at least, it's not hurting anyone in that sense.
05:56 Yes, there can be faster growth if there's a slightly lower rate, but that growth will be curtailed
06:02 significantly if inflation starts going out of control. So it's a question of how do you
06:07 manage the economy longer term or even over the medium term?
06:10 And therefore,
06:13 yes, while there has been some challenge, if you look at where we were last year versus where we are today,
06:18 today there's a lot more positivity around the fact that we're not seeing challenges with inflation.
06:24 We're seeing that in control. In India at least. In India and possibly even globally.
06:29 There was a lot more concern around inflation last year at this time, a lot more concern around recession at that point in time.
06:35 Those conversations have largely gone away.
06:38 Okay, are you a bit more confident about growth than what you might have been a quarter ago?
06:45 I was very confident a quarter ago. I continue to be very confident right now. And I think for us again, we've got to look at
06:52 sustained growth over time.
06:54 So it's not about a blip that we would go in and say we're growing very well. It has to be sustained.
06:59 Okay, and what about group M&M within that? Because I mean your clutch of businesses, you've enacted some leadership changes in a couple of buckets as well.
07:08 I'm not saying necessarily because the past versus the present, the present might be better, but you've done changes out there.
07:13 So tell us a bit about what is top of your mind when you look at your group?
07:17 And how do you see 2024 or the next three or four years as the case may be?
07:22 For us, top of mind is to have bold aspirations because to be part of the India growth story, you've got to be bold.
07:29 And second, deliver on the commitments that we make.
07:33 So for us, the focus really is execution and
07:37 ensure that we are delivering high quality products.
07:40 We're delivering what the consumer wants. We're a leader in technology
07:45 because that is reshaping every industry and that's something we've done a lot on across various industries.
07:52 And that we've got a very strong talent base that enables us to do all of it.
07:57 Yeah, but no, I'm still trying to probe you a little bit.
08:00 The clutch of those businesses out there, both on services and manufacturing, as you look forward,
08:05 and I'm not asking you to choose one among, a favorite son amongst the few or a favorite daughter amongst the few that you have,
08:11 but just give us some flavor.
08:13 So I can give you details on each one of them.
08:15 The way we look at it, auto and farm have to capitalize on market leadership.
08:21 For auto, the big story is going to be electric. We've got five
08:26 born electric SUVs coming in starting December this year and that is going to change the game.
08:32 For farm, international and farm machinery are the two big road drivers.
08:37 Then we've got TechMinder and Mindre Finance.
08:40 Both are on a very solid turnaround path right now.
08:45 Mindre Finance started their journey about a year and a half ago
08:48 and has made tremendous progress on a number of fronts that we've talked about publicly before.
08:53 TechMindre is on a very solid path now as well and
08:58 it will require a number of actions over the next two to three years.
09:02 Mohit has come in as a new CEO and he's outlining those.
09:06 So again, very confident about where that business will go. And then we've got our growth gems, ten of them.
09:12 For our growth gems, we've set an ambitious bar of 5x
09:18 in the next five to seven years.
09:20 We've got a couple of businesses who have already met that.
09:24 We've got a few other businesses who have plans to get there and this includes Susten,
09:30 a last mile business which is electric three wheelers,
09:33 Holidays, Lifespaces, Logistics, Classic Legends. So we've got a set of very good businesses and
09:39 the good news is that they're all performing at a very good clip right now.
09:45 Again, we're building businesses for the long run and therefore I don't look as much as what's happening in the short run.
09:51 Yes, as a CEO of a listed entity, you can't ignore that.
09:55 But for us, the more important part is we'll business as well and build them for the long run.
10:00 Okay. Now my last question and I won't invoke sustainability because I think the group has spoken a lot about it.
10:06 But as you walk across the promenade, AI
10:08 seems to be the buzzword each day for the last four days, at least to my mind. Now as somebody who's heading such a large
10:15 group, as somebody who's head of FICCI as well, how do you think corporates in India, how do you think your group
10:20 manages to adapt to AI, benefit out of it or at least not get
10:28 impacted by the disruption that AI, generative AI, etc might cause?
10:33 So our goal is to be a tech leader in every industry we are in. So therefore for every new technology, we are ahead of the curve.
10:39 Tech Mahindra is a huge asset because
10:44 their strengths enable us to look at each of our businesses and create solutions for them. So we're looking at
10:51 generative AI projects across multiple businesses right now.
10:54 We build certain very solid tools that will enable us to do that and
10:58 beyond that if you look back at Metaverse, blockchain prior to that, we've got very good applications of that in our businesses.
11:07 Overall, I do feel that AI right now is
11:11 in the short run hyped a lot more than it should be,
11:15 which happens to every new technology. We did the same thing with Metaverse, we did the same thing with blockchain prior to that,
11:22 but in the long run, there's a lot more value that we will see from it than we may foresee right now.
11:27 So it's clearly a game changer
11:30 and it's about how we use that, adapt that for various
11:35 cases that are required across businesses that will differentiate the folks who succeed and those who don't.
11:40 Okay, and my final question to you, we started off with India, I'm ending with India.
11:44 2024, you already said that growth will be strong, but if the world growth,
11:49 I mean, we know that it's in some sense faltering even though yes, a lot more confidence around
11:55 predictability of inflation etc. But if growth falters for whatever reason, we do not have a soft landing or no landing,
12:01 but have a hard landing, let's say in the US at least, could Indian growth still be resilient or will it be a case of relativity?
12:09 We're always going to be impacted by what happens around the world. We're not an economy in isolation.
12:15 That said, India has a lot of things going for it.
12:19 Demographics is a key aspect there and I do feel that it will be an opportunity for us to be able to
12:26 really do a lot more
12:29 and stay ahead in terms of our growth rate.
12:32 Okay, cross fingers for that. But Dr. Shah,
12:35 thanks so much for taking the time out and speaking to us. Really a pleasure talking to you today.
12:38 Likewise. Thank you and viewers, thanks for tuning in.
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