Ramesh Iyer, vice chairman and MD, Mahindra & Mahindra Financial Services Ltd, in an interview with Swati Khandelwal of Zee Business, said the firm is eyeing a 20-25% annual growth in disbursements. Monsoon and infrastructure works are driving the optimism. While the rupee fall is a matter of concern, the company does not see rising fuel prices impacting vehicle financing business.

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Do you think the company will be able to meet the projected growth from rural areas?
A good monsoon and ongoing infrastructure works in rural areas have helped in boosting sentiments and has increased cash flow. The way the monsoon has panned out and the ongoing works on infrastructure in different states make me feel that we will be posting a positive growth story. In addition, we have our customers in more than 3.40 lakh villages and the existing situation in villages hints that we will be able to script a growth story.

What is growth expected in the ongoing year?
Initially, we projected growth at 15-18% but reported a growth of over 20% in the first quarter itself. Second half always remains good in the rural areas. In addition, new launches in vehicle segment, penetration of OEMs (original equipment manufacturers) in the rural areas, discounts due to rise in inventory levels and good monsoon cues suggest we will get great leads, which will help us in posting a growth of 20-25%.

India Meteorological Department said monsoon remained 7% below the average. Will this impact rural sales?
Have a look at the timeline of monsoon and the way it panned across India. It remained above average in big states like Uttar Pradesh, Bihar, Madhya Pradesh, Maharashtra and Rajasthan, and will lead to a good yield. These are the states on the basis of which the yield is measured. Thus, this deficiency of 7% is not going to have any impact on our results.

Will rupee depreciation hit your business?
We don’t have any international borrowings and that’s why it is not going to have any big impact on our business. But this weakening will definitely create a pressure on the environment, and thus, we will have to wait and watch the reaction of banks on this fall. It is a matter of concern.

And fuel prices?
We have never seen that an increase in operating cost had any impact on sales. Commercial vehicle operators manage the input cost by increasing the freight rates and passenger fares. However, it may have an impact on their margins and bring a pressure on collections. Pressure on margins does not have any impact on sales.

What about the plan to list your subsidiaries?
I feel more time is needed. For instance, for our housing business, which has seen 10 years of its existence, we will go ahead with listing after increasing its balance-sheet to Rs 20,000 crore. This will be done by 2020. At present, it has a balance-sheet of around 6,000-7,000 crore.

Source: DNA Money