Getting an A(AA) Grade

CRISIL has reaffirmed its 'CRISIL AAA/Stable/CRISIL A1+' ratings on the debt programmes and bank facilities of Mahindra and Mahindra Ltd, a testament to the company’s leadership in the Indian tractor industry and its healthy market position in light commercial vehicles (LCVs).

Mahindra continues to maintain a leadership position in the domestic tractor industry in all major regions and retains a market share of over 40% on the back of its superior channel reach and understanding of market dynamics.

The company also has a strong presence in LCVs with over 40% market share in the goods LCV (lower than 7.5 metric tonne gross vehicle weight division while its share in the pick-up segment (2.0-3.5 MT GVW) was over 60%. The company's strong presence in these segments has ensured healthy cash flows and fairly resilient profitability.

While giving this strong rating Crisil acknowledged Mahindra’s key strengths such as good product development capabilities, proficient channel management along with sufficient production capacity are expeected to help it maintain a strong market position over the medium term. Increasing competition and inherent cyclicality of the business notwithstanding, the company’s strengths coupled with revenue and geographic diversity are likely to ensure a stable business risk profile.

According to CRISIL, M&M's strong financial risk profile will help it absorb the impact of cyclicality and competitive intensity in its core auto and farm equipment business.

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