MFCS, which has earmarked a total investment of Rs 250 crore, plans to add 100 centres every year through franchise route from next year.
"Currently we have 25 company-owned and operated outlets. We have largely got the business model and spares supply chain in place. We are set for a rapid expansion," Rajeev Dubey President (Group HR, Corporate Services & After-Market) & Member of the Group Executive Board, Mahindra and Mahindra told reporters.
Also Read: Price hike will help protect, maintain margin: M&M
Elaborating on the plans, he said by March the company will have a total of 30 company-owned and operated service centres and it will take the total to 50 by next year-end.
"Simultaneously, we will also start expansion through the franchise route. The plan is to add 100 outlets every year," Dubey said.
MFCS chief operating officer YVS Vijay Kumar said the target is to have a total 450 outlets by 2018. "We are aiming for a turnover of Rs 1,000 crore when we have those many outlets," Kumar said, adding that M&M expects to end this fiscal with a turnover of around Rs 30 crore, while it could be around Rs 100 crore by 2014-15.
On investments, Dubey said the company had earmarked Rs 250 crore for the expansion out of which Rs 100 crore has been already invested. The remaining Rs 150 crore will be invested in setting up the company owned centres.
Each franchise partner is expected to invest about Rs 1 crore per outlet.
Commenting on the potential of the multi-brand auto service business, Dubey said the total spares and service market in India is estimated to be about Rs 12,000 crore, out of which 50 percent is controlled by automobile companies through their service centres and rest with local workshops.
"If we compare with developed markets like Europe, where multi-brand auto service providers have 33 percent share, the potential in India is around Rs 4,000 crore but multi-brand service providers have a negligible share currently," he said. MFCS today opened four workshops in the National Capital Region.
M&M stock price
On December 20, 2013, Mahindra and Mahindra closed at Rs 969.25, up Rs 31.40, or 3.35 percent. The 52-week high of the share was Rs 1026.45 and the 52-week low was Rs 741.50.
The company's trailing 12-month (TTM) EPS was at Rs 59.31 per share as per the quarter ended September 2013. The stock's price-to-earnings (P/E) ratio was 16.34. The latest book value of the company is Rs 238.22 per share. At current value, the price-to-book value of the company is 4.07.
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