Description
This is a presentation about mahindra group diversification.
Mahindra Group diversifies into Software Sector – Tech Mahindra
Contents
• • • • • • • Introduction to the Mahindra Group Mahindra Group – A Diversified Business Rationale Modalities Effectiveness Competitive Strengths & Potential Risks Team Suggestions
Group Overview
• The US $4.5 billion Mahindra Group is among the top 10 industrial houses in India • Forbes has ranked the Mahindra Group in its Top 200 list of the World’s Most Reputable Companies and in the Top 10 list of Most Reputable Indian companies in 2006 • Mahindra products are today available in every continent except Antarctica • The Group employs over 40,000 people and has several state-of-the-art facilities in India and overseas • Mahindra & Mahindra Ltd, the group’s flagship company is the only Indian company among the top four tractor manufacturers in the world
Group Overview
• Mahindra and Mahindra Ltd. pioneered the concept of ‘Jeep’ – the in India in 1949 • Mahindra and Mahindra Ltd. is the largest manufacturer of both tractors and utility vehicles in India • With over 60 years of manufacturing experience, the Mahindra Group has built a strong base in technology, engineering, marketing and distribution which have played a key role in its evolution as a customer-centric organization. • M&M has entered into partnerships with international companies like Renault SA, France, and International Truck and Engine Corporation, USA. • The Group recently made a milestone entry into the passenger car segment with Logan, a product of its JV with Renault SA.
Mahindra Group – Diversified Business
Mahindra &Mahindra
Automotive
Farm Equipment
Financial Services
Infrastructure
Information Technology
Systech
Speciality Business
Source: http://www.mahindra.com/index.asp
Automative
Farm Equipment
Financial Services
Infrastructure Mahindra Holidays & Resorts
Information Technology
Systech
Speciality Business
Mahindra Renault
Mahindra Gujrat Tractor
Mahindra Finance Mahindra Insurance Brokers Mahindra InterTrade
Tech Mahindra
Engineering
AshTech
Mahindra International Automart India
Mahindra AgriBusiness
Mahindra Gesco Mahindra World City
Bristlecone Mahindra Logisoft
Sourcing
Defence Systems
Forging
Logistics
MMESS
Mahindra Infrastructure Developers
Special Services Group
Gears
Spares Business Unit
Acres Consulting Engineers
Composites Steel Products
Engineerin g& Chemical Products Limited
Source: http://www.mahindra.com/index.asp
Why diversify into IT?
GOVERNMENT POLICIES IN IT INDUSTRY
? Rigid policy restrictions, poor implementation of phased reforms and low Govt. encouragement ensured virtually no S/W industry in India prior to 1984. ? Post 1984, restrictions were eased mainly by
1) NATIONAL COMPUTER POLICY – 19 November1984
2) COMPUTER SOFTWARE EXPORT, DEVELOPMENT AND TRAINING POLICY – 18 December 1986
Why diversify into IT?
NATIONAL COMPUTER POLICY – 19 November1984 ?Software recognized as an “industry”, making it eligible for investment allowance. ?Duties on import of s/w lowered – source code and object code imported at 60% while source code as printed matter attracts no duty. ?Software export over satellite links permitted ?Import of computers for s/w exports at a special low duty. ?Exporters permitted to retain 50% of their foreign earnings (including income from bodyshopping), beyond their obligation in any year, for any purpose.
Few Players on the Indian IT scene
% Share of IT Exports in 1986
TCS, 24
Others, 23 Patni (PCS), 7
Tata Infotech, 15 Texas Instruments, 8 Datamatics, 10
Citibank, 14
Source: NASSCOM Report of 1993-94
Why diversify into IT?
COMPUTER SOFTWARE EXPORT, DEVELOPMENT AND TRAINING POLICY – 18 December 1986 ? Aim : Increase India’s software exports by promoting the Indian domestic software industry ? Software imports placed in Open General License (OGL) category – software can be imported in any form in any quantity by anybody at 60% ? Application through EXIM Bank: hardware import for software export – faster and 50% duty rebate ? Software exporters retain up to 30% of excess export earnings and use it to make new investments for generating future exports
Projected Growth – Indian IT Sector
Source : Data Monitor Global Survey Report 1985-86
Projected Growth in global TSP market
Source : Data Monitor Global Survey Report 1985-86
India – Emerging IT Outsourcing Hub
Source : ILO – World Employment Report 1985 – Life in the Information Economy
Trends in Labor Supply in Indian IT Sector
Source : NASSCOM Report of 1993-94 (www.nasscom.org)
Modalities of Diversifying to Tech Mahindra
• BT monopoly in UK Telecom market ends in 1982 • BT anticipates increasing competition from the likes of Cable & Wireless, Vodafone, etc. in the future • BT intends to strategically outsource a portion of its IT operations to cheaper locations • Mahindra Group approaches BT • MBT born - Joint venture between M&M and BT Plc with M&M holding 57% and BT holding 43% of the equity in 1988 • MBT starts business mainly as offshore centre to maintain and enhance BT legacy systems • MBT brand name changed to Tech Mahindra in 2006
Revenue Growth of Tech Mahindra Vs Mahindra & Mahindra - Effectiveness
Contribution to M&M’s revenues
Profit over the Years - Effectiveness
Chart Title
1997 1998 1999 2000 2001 2002
2003
2004 2005 2006 2007
IT Software Exports
Rank 1 TCS 2 Tata Infotech 1985 TCS Tata Infotech 1995 TCS Infosys 2007
3 Computronics
4 Shaw Wallace
Citibank
Datamatics
Wipro
Satyam
5 Hinditron
6 Indicos Systems 7 ORG 8 Systime
TI
DEIL PCS Mahindra BT
HCL
Mahindra BT PCS i-Flex
Increase in ClientBase
Head Count - Effectiveness
Acquisitions & Partnerships
• In Jan 2007, Tech Mahindra acquired total share capital in iPolicy Networks Pvt. Ltd. which offers next-generation, carrier grade integrated network security solutions. • In July 2006, Tech Mahindra formed a joint venture with Motorola to form “CanvasM Technologies Limited”. Tech Mahindra holds 80.1% and Motorola holds 19.9%. CanvasM focusses on delivering and deploying innovative applications – “Value Added Services” (VAS) for network service providers and enterprises to give competitive edge
• In November 2005, Tech Mahindra acquired Axes Technologies (India) Private Limited, which provides tech solutions to leading TEM in the areas of R&D, Product Engineering and Life Cycle Support.
Investor Confidence in Tech Mahindra
• IPO was 72 times oversubscribed • One of the best IPO in the current financial year • Share price touching Rs.1999 from initial offering of Rs.365 within a span of 4 months • TECH MAHINDRA: M-cap: Rs 17,430 crore (July 2007) • Parent: Mahindra & Mahindra/ M-cap: Rs 17,190 crore (July 2007)
Tech Mahindra Advantage
• Largest independent Indian IT solutions focused on Telecom • 3rd Largest BSS Systems Integrator in the world (Gartner – Dataquest 2006) • 8th Largest software exporter from India(Nasscomm 2006) • Ranked 32nd in the Leader’s category in the Global Outsourcing 100(IAOP 2006) • Ranked in Top 30 Offshoring Providers(IAOP 2006) • Leaders in the Telecom Vertical in India(Frost & Sullivan) • Ranked as the 4th largest player in Telecom Software from India • Business Partnership of the Year Tech Mahindra Limited Tech Mahindra is the longest running joint venture in the IT industry.
GOING STRENGTH TO STRENGTH • Exclusive focus on the growing telecom industry • Superior domain knowledge • Efficient Delivery Model • Well established client relationships eg. BT, Alcatel, AT&T • Strong relations with key software vendors eg. Oracle, Verisign, Clarity • Recognized Parentage -> M&M -- BT
HIGH RISK FACTORS
• High business dependency on global telecom market • Large proportion of revenues from top 5/10 clients • High levels of business exposure to British Telecom
OUR RECOMMENDATIONS
• Right time to diversify into other verticals like BFSI, IHL, Retail, Mfg., Energy, etc. and consolidate strength in Telecom • Get projects from potential clients like Cingular, Telefonica, etc. (still not served) • Continue to provide innovative telecom services and products in fields of OSS/BSS, VAS, TEM, Network Security
Sources
• • • • www.mahindra.com www.techmahindra.com www.wikepedia.org “Globalizing Information Technology : The Domestic Policy Context for India’s Software Production and Exports” – An article by Balaji Parthasarathy, IIITBangalore “Origins and Growth of the Software Industry in India – Rafiq Dossani, Senior Research Scholar, Asia-Pacific Research Center, Stanford University, Stanford, California
•
QUESTIONS ??
THANK YOU
doc_701182461.pptx
This is a presentation about mahindra group diversification.
Mahindra Group diversifies into Software Sector – Tech Mahindra
Contents
• • • • • • • Introduction to the Mahindra Group Mahindra Group – A Diversified Business Rationale Modalities Effectiveness Competitive Strengths & Potential Risks Team Suggestions
Group Overview
• The US $4.5 billion Mahindra Group is among the top 10 industrial houses in India • Forbes has ranked the Mahindra Group in its Top 200 list of the World’s Most Reputable Companies and in the Top 10 list of Most Reputable Indian companies in 2006 • Mahindra products are today available in every continent except Antarctica • The Group employs over 40,000 people and has several state-of-the-art facilities in India and overseas • Mahindra & Mahindra Ltd, the group’s flagship company is the only Indian company among the top four tractor manufacturers in the world
Group Overview
• Mahindra and Mahindra Ltd. pioneered the concept of ‘Jeep’ – the in India in 1949 • Mahindra and Mahindra Ltd. is the largest manufacturer of both tractors and utility vehicles in India • With over 60 years of manufacturing experience, the Mahindra Group has built a strong base in technology, engineering, marketing and distribution which have played a key role in its evolution as a customer-centric organization. • M&M has entered into partnerships with international companies like Renault SA, France, and International Truck and Engine Corporation, USA. • The Group recently made a milestone entry into the passenger car segment with Logan, a product of its JV with Renault SA.
Mahindra Group – Diversified Business
Mahindra &Mahindra
Automotive
Farm Equipment
Financial Services
Infrastructure
Information Technology
Systech
Speciality Business
Source: http://www.mahindra.com/index.asp
Automative
Farm Equipment
Financial Services
Infrastructure Mahindra Holidays & Resorts
Information Technology
Systech
Speciality Business
Mahindra Renault
Mahindra Gujrat Tractor
Mahindra Finance Mahindra Insurance Brokers Mahindra InterTrade
Tech Mahindra
Engineering
AshTech
Mahindra International Automart India
Mahindra AgriBusiness
Mahindra Gesco Mahindra World City
Bristlecone Mahindra Logisoft
Sourcing
Defence Systems
Forging
Logistics
MMESS
Mahindra Infrastructure Developers
Special Services Group
Gears
Spares Business Unit
Acres Consulting Engineers
Composites Steel Products
Engineerin g& Chemical Products Limited
Source: http://www.mahindra.com/index.asp
Why diversify into IT?
GOVERNMENT POLICIES IN IT INDUSTRY
? Rigid policy restrictions, poor implementation of phased reforms and low Govt. encouragement ensured virtually no S/W industry in India prior to 1984. ? Post 1984, restrictions were eased mainly by
1) NATIONAL COMPUTER POLICY – 19 November1984
2) COMPUTER SOFTWARE EXPORT, DEVELOPMENT AND TRAINING POLICY – 18 December 1986
Why diversify into IT?
NATIONAL COMPUTER POLICY – 19 November1984 ?Software recognized as an “industry”, making it eligible for investment allowance. ?Duties on import of s/w lowered – source code and object code imported at 60% while source code as printed matter attracts no duty. ?Software export over satellite links permitted ?Import of computers for s/w exports at a special low duty. ?Exporters permitted to retain 50% of their foreign earnings (including income from bodyshopping), beyond their obligation in any year, for any purpose.
Few Players on the Indian IT scene
% Share of IT Exports in 1986
TCS, 24
Others, 23 Patni (PCS), 7
Tata Infotech, 15 Texas Instruments, 8 Datamatics, 10
Citibank, 14
Source: NASSCOM Report of 1993-94
Why diversify into IT?
COMPUTER SOFTWARE EXPORT, DEVELOPMENT AND TRAINING POLICY – 18 December 1986 ? Aim : Increase India’s software exports by promoting the Indian domestic software industry ? Software imports placed in Open General License (OGL) category – software can be imported in any form in any quantity by anybody at 60% ? Application through EXIM Bank: hardware import for software export – faster and 50% duty rebate ? Software exporters retain up to 30% of excess export earnings and use it to make new investments for generating future exports
Projected Growth – Indian IT Sector
Source : Data Monitor Global Survey Report 1985-86
Projected Growth in global TSP market
Source : Data Monitor Global Survey Report 1985-86
India – Emerging IT Outsourcing Hub
Source : ILO – World Employment Report 1985 – Life in the Information Economy
Trends in Labor Supply in Indian IT Sector
Source : NASSCOM Report of 1993-94 (www.nasscom.org)
Modalities of Diversifying to Tech Mahindra
• BT monopoly in UK Telecom market ends in 1982 • BT anticipates increasing competition from the likes of Cable & Wireless, Vodafone, etc. in the future • BT intends to strategically outsource a portion of its IT operations to cheaper locations • Mahindra Group approaches BT • MBT born - Joint venture between M&M and BT Plc with M&M holding 57% and BT holding 43% of the equity in 1988 • MBT starts business mainly as offshore centre to maintain and enhance BT legacy systems • MBT brand name changed to Tech Mahindra in 2006
Revenue Growth of Tech Mahindra Vs Mahindra & Mahindra - Effectiveness
Contribution to M&M’s revenues
Profit over the Years - Effectiveness
Chart Title
1997 1998 1999 2000 2001 2002
2003
2004 2005 2006 2007
IT Software Exports
Rank 1 TCS 2 Tata Infotech 1985 TCS Tata Infotech 1995 TCS Infosys 2007
3 Computronics
4 Shaw Wallace
Citibank
Datamatics
Wipro
Satyam
5 Hinditron
6 Indicos Systems 7 ORG 8 Systime
TI
DEIL PCS Mahindra BT
HCL
Mahindra BT PCS i-Flex
Increase in ClientBase
Head Count - Effectiveness
Acquisitions & Partnerships
• In Jan 2007, Tech Mahindra acquired total share capital in iPolicy Networks Pvt. Ltd. which offers next-generation, carrier grade integrated network security solutions. • In July 2006, Tech Mahindra formed a joint venture with Motorola to form “CanvasM Technologies Limited”. Tech Mahindra holds 80.1% and Motorola holds 19.9%. CanvasM focusses on delivering and deploying innovative applications – “Value Added Services” (VAS) for network service providers and enterprises to give competitive edge
• In November 2005, Tech Mahindra acquired Axes Technologies (India) Private Limited, which provides tech solutions to leading TEM in the areas of R&D, Product Engineering and Life Cycle Support.
Investor Confidence in Tech Mahindra
• IPO was 72 times oversubscribed • One of the best IPO in the current financial year • Share price touching Rs.1999 from initial offering of Rs.365 within a span of 4 months • TECH MAHINDRA: M-cap: Rs 17,430 crore (July 2007) • Parent: Mahindra & Mahindra/ M-cap: Rs 17,190 crore (July 2007)
Tech Mahindra Advantage
• Largest independent Indian IT solutions focused on Telecom • 3rd Largest BSS Systems Integrator in the world (Gartner – Dataquest 2006) • 8th Largest software exporter from India(Nasscomm 2006) • Ranked 32nd in the Leader’s category in the Global Outsourcing 100(IAOP 2006) • Ranked in Top 30 Offshoring Providers(IAOP 2006) • Leaders in the Telecom Vertical in India(Frost & Sullivan) • Ranked as the 4th largest player in Telecom Software from India • Business Partnership of the Year Tech Mahindra Limited Tech Mahindra is the longest running joint venture in the IT industry.
GOING STRENGTH TO STRENGTH • Exclusive focus on the growing telecom industry • Superior domain knowledge • Efficient Delivery Model • Well established client relationships eg. BT, Alcatel, AT&T • Strong relations with key software vendors eg. Oracle, Verisign, Clarity • Recognized Parentage -> M&M -- BT
HIGH RISK FACTORS
• High business dependency on global telecom market • Large proportion of revenues from top 5/10 clients • High levels of business exposure to British Telecom
OUR RECOMMENDATIONS
• Right time to diversify into other verticals like BFSI, IHL, Retail, Mfg., Energy, etc. and consolidate strength in Telecom • Get projects from potential clients like Cingular, Telefonica, etc. (still not served) • Continue to provide innovative telecom services and products in fields of OSS/BSS, VAS, TEM, Network Security
Sources
• • • • www.mahindra.com www.techmahindra.com www.wikepedia.org “Globalizing Information Technology : The Domestic Policy Context for India’s Software Production and Exports” – An article by Balaji Parthasarathy, IIITBangalore “Origins and Growth of the Software Industry in India – Rafiq Dossani, Senior Research Scholar, Asia-Pacific Research Center, Stanford University, Stanford, California
•
QUESTIONS ??
THANK YOU
doc_701182461.pptx