Russia seeks aerospace tie-up with M&M
Russian Trade and Industry Ministry is in talks with Indian automaker Mahindra & Mahindra to partner for MC 21 civil aviation aircraft. MC 21 is ready to fly soon and Russia is looking forward to outsource manufacturing of some components and producing interiors to Mahindra & Mahindra. As it is, Mahindra is already engaged in manufacturing interiors for Russia’s Sukhoi super jet. Now, Russia is expected to localise component manufacturing of the Sukhoi.
In total, the ministry has around 2114 commercial aircrafts to be built for regional airway purpose. For this, Russia seeks component manufacturing from M&M and many other Indian companies. Secondly, Russia will also meet defence needs of India by supplying 60 multi-purpose Kazan helicopters initially, followed by 140 helicopters with joint set-up in India itself.
The company's aerospace subsidiaries are currently contributing negligibly to Mahindra’s revenues and negatively to its profits. The said deal may lead to a better revenue contribution from Mahindra’s aerospace subsidiaries. We may see the stock of Mahindra & Mahindra in the limelight post confirmation of the deal and thereby some recovery in the stock price.