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Mahindra & Mahindra to consolidate auto components business

09 Dec 2009 Evaluate

Mahindra Systech, the component arm of Mahindra & Mahindra (M&M), plans to consolidate its auto component units into a single entity. Companies like Mahindra Forgings, Mahindra Composites, Mahindra Castings, Mahindra Gears, Mahindra Ugine will all be wrapped up into one company Systech.

 

M&M would hold 55-60% in the consolidated entity and the consolidation is likely to happen in less than 3 years time. The company has already done the consolidation at the operational level; however at the financial level it will take some time.

 

The combined revenues of all the companies under Systech have dipped to $700 million from $950 million in FY09 owing to recession in Europe. Systech has made a total investment of €245-250 million in all its overseas acquisitions.

 

Mahindra Systech (standalone) is eyeing revenues of $150 million annually in the next five years from the aerospace component production business. The prototypes of NM5, a plane being co-designed by Mahindra Aerospace Pvt Ltd (MAPL), Systech's aerospace arm, in a joint venture with National Aeronautics Laboratory (NAL) are ready and will begin flying before the end of this fiscal.

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