Auto major Mahindra & Mahindra (M&M) today said it plans to invest Rs 1,500 crore at its Nashik and Igatpuri plants, along with ongoing expansion of Rs 4,500 crore at Chakan facility in Maharashtra for the next phase of expansion.
"We are investing Rs 1,500 crore at our Nashik and Igatpuri plants, which will help us in expanding our production capacity by 50,000 vehicles to 2,00,000 vehicles. The Nashik projects will qualify as 'Ultra Mega Project' and it will be funded through internal accruals," M&M managing director Pawan Goenka told reporters here.
The Nashik project constitutes development and manufacture of its new product codenamed U321, covering joint investment at Nashik and Igatpuri. The investment in the Nashik plant will be towards manufacture of vehicles, while investment in the Igatpuri plant will be for manufacture and supply of engines.
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We invest around Rs 2,500 crore every year towards capex plan and investment in Nashik will be part of our investment strategy, Goenka said.
The company had earlier announced Rs 4,500 crore investment in the Chakan facility as part of its expansion programme, he said, adding that the part I of the phase II has completed.
"We are going ahead with part II now. Discussing the company's expansion plans. Maharashtra government's visionary industrial policies and efficient governance practices, has enabled us to undertake the next phase of our expansion plans at Nashik," he said.
The company reported 33.29 per cent increase in standalone profit after tax (PAT) at Rs 1,112.27 crore for the third quarter ended December 31 2016, driven by an exceptional income of Rs 363.78 crore on account of sale of investment in group firms.
It had posted a PAT of Rs 834.47 crore during the same
period a year ago.
The total income from operations during the third quarter rose to Rs 11,777.98 crore, up 1.47 per cent from Rs 11,607.35 crore earlier.
Goenka said that the auto industry was adversely impacted in the third quarter due to demonetisation with all the segments of the industry showing significant drop in demand in the months of November and December 2016.
This was in contrast to the overall positive sentiment and demand that prevailed in the period April to October.
He pointed out that the auto industry may see signs of recovery in February-March period.
Tractor sector may see 8-10 per cent growth in Q4 FY 17 and 16-17 per cent growth in FY 17 as compared to 20 per cent last year, he added.
