Founder interview

Anil ji, the numbers can wait. First I want to hear the story of Mehta Auto from you. How did all this begin in 2004?

I was production head at a Tata vendor. Twenty years ago now. One day the owner said — Anil, why don't you do this yourself? I started with two machines, took a shed in Bhosari. The first order came from him — the man who was my boss became my first customer.

Do you remember the day that first order came in?

Of course I remember. Forty thousand rupees. I ran the machine through the night myself. When I went to deliver it he told me — quality is your name, never let it go. I have held onto that till today.

And the hardest year?

2020. The plant was shut in the lockdown, but I did not hold back one man's salary. Not one. I broke the FD, sold the car. That is why people stay.

Now I want to understand the business the way you see it. From the gut, not from a calculation — where is the money actually made?

In the precision parts. The Sundaram work — the tolerances are tight, not everyone can do it. That is where the margin is. The commodity parts we take just to keep the machines running.

And your biggest customer — roughly what share would that be, as a percentage?

Sundaram... twenty, twenty-two percent maybe. Not more. I have always been careful not to depend on any one customer.

If you could 10x one thing tomorrow morning — what would it be?

Export. Our quality is export level, but I have never had the time to look that way. The day goes right here — payment follow-ups, some dispatch mess, somebody's quarrel.

In FY23 the steel benchmark rose about 18%, and settled 11% above where it started. Across those same two years your net margin went from 4.3% to 3.6%. How did that get absorbed?

We absorbed it. Sundaram revises rates once a year, and in FY23 they said it plainly — market is tight, not this year. The line had to keep running, so I said yes. I took a little from the small customers, but from the big ones you don't get it.

Let me put the opposite to you — did the smaller customers' rates actually rise? Any one example?

Yes — Nashik Gears, seven percent in FY23. They agreed in a day. It is the big ones who never do.

One more on the same thread. Of your rate contracts, how many are tied to the steel price, and how many are fixed?

Linked? Not one. All fixed. The Sundaram contract only says there will be a review once a year — and a review means they can say no.

I buy steel from Kalyani at the day's rate, and I sell at one fixed rate all year. I have never thought of it that way before.

You billed Rs 80.1 Cr last year against Rs 78.9 Cr the year before. Set the rupees aside for a moment — compared to that year, the tonnage you actually shipped: same, more, or less?

Tonnage... about the same. If anything a little more. Sundaram's volume went up that year — they gave an extra schedule — but the rate stayed where it was. Nashik came down a little. All together, level or slightly up.

Across the four years to February, contributing employees went from 115 to 140 — twenty-five people. Over the same stretch, filed revenue moved from Rs 71.2 Cr to Rs 80.1 Cr, and most of that came early. Who were those twenty-five hired for?

Most of them came in the last two years. Meridian promised a new line — said the volume would double. I hired for a second shift, bought a machine too — that is the Bajaj Finance loan. The volume came, but half. Now the people are here and the work is not.

And does the old line still run overtime?

It happens — a lot in the last week of the month. That is where the Sundaram dispatch pressure sits.

Look at this pattern — all four late filings fall in the month after a quarter close. What is going on at that desk in those weeks?

Ramesh ji is alone, no? Quarter close, audit data, filings — all of it on him.

And to be honest — twice it happened that the GST money had to come from collections. Until it came, I held the filing. Cash flow matters more than the interest.

We sent an enquiry through your own website form, with your permission. Four days passed with no reply going out. Where did your last new customer come from?

The website enquiries are mostly junk...

A new customer... Nashik Gears. Two years ago. The enquiry came in through IndiaMART, and Priya caught it.

Roughly how many new enquiries reached you last year — any order of magnitude?

Never counted. Priya must get some, Deepak some. It is not written down in any one place.

How many part families do you make — and when did you last add a new one?

Families... six or seven. Brackets, housings, shafts, gear blanks, covers, and two-three small items. A new family... we took the housing line in 2019. Nothing after that.

Of those families, how many go into an engine or a transmission?

Gear blanks and shafts are all transmission. Housings mostly go there too. So... more than half.

You are asking about the EV thing, no? Rohit keeps saying it too. I have thought about it, but I have not done anything yet.

Roughly how much cash is in the account today?

Thirty-two, thirty-three lakh.

The monthly wage bill?

Around thirty-six lakh.

Who is your biggest receivable sitting on right now?

Sundaram — around twenty-eight lakh, should be.

On average, how many days before the money comes in?

Say forty-five, fifty days.

What is the margin on Sundaram?

That... I would have to ask the CA. Never worked it out item-wise.

How much of the working-capital line is drawn?

(checking his phone) ninety-one percent.

Out of a hundred enquiries, how many turn into orders?

Never counted. What comes through relationships gets done.

Monthly breakeven?

I need five, five and a quarter crore of billing in a month.

What share of last year's revenue came from your single biggest customer?

Same — twenty, twenty-two percent.

And the top four together?

Fifty... fifty-five percent, should be.

And how long do you take to pay your own suppliers?

Forty-five days. Kalyani's is fixed, of course.

Which part family earns you the most per rupee of sale?

Family-wise I have never worked it out. On feel, the housings.

What share of your costs is power?

Three or four percent, should be.

What is your capacity utilisation running at?

Around eighty percent. Vinod can tell you better.

From taking an order to having the money — how many days end to end?

Sixty days. Maybe seventy.

Monthly interest outgo?

(checking his phone) six lakh ten thousand, this month.

How many people left last year?

Ten or twelve. Not more. People stay here.

What does an hour on a machining centre cost you?

That costing has never been done. When we quote, we go by experience.

Rejection and rework rate?

(checking WhatsApp) Vinod sent it last month — two point three percent.

After materials, what is your single largest monthly expense?

Salary. After that, power.

If Vinod ji didn't come in for two weeks, what stops?

The plant stops, simple as that. Machine settings, quality judgment, the people — all of it is in his head. Nothing on paper.

And if Ramesh ji didn't come in for two weeks?

Nobody would be able to find where the money is. He has handled it for twenty years. I leave it to him with my eyes closed.

Five years out — what should your own day look like?

A morning round of the plant, then new customers, thinking about new markets. The daily payment-dispatch work, Rohit should handle. He understands money better than I do, honestly. The products I am teaching him.

Now the question all of this is for. Three years — if everything were in your hands, what is Mehta Auto?

One hundred and fifty crore. Twenty percent export. And a name of our own in components — people should say, if it is a Mehta part there is no tension. And no more of this life that hangs on one customer.

And what would you never do — even if growth stopped?

Three things. No outside money in the company — she is like a daughter, I will not sell a share of her. I will not leave Bhosari — the people here are my people. And salaries will never be late, whatever happens.

And how do you think about debt?

What we have is fine. A loan for a machine is fine — a machine earns. A loan for expenses, never.

Leave the numbers aside. Think of a time somebody here made you proud — not a big order, a person. What had they done?

Two years back, a Sundaram consignment. Suresh found a batch mixed up at nine at night, after the truck was loaded. He unloaded it himself, alone, and re-checked every box. Nobody told him. The customer never knew there was a problem. That is the man I want twenty of.

And the other side. What has somebody done here that you could not forgive?

Hiding a problem. A rejection happened, and I found out from the customer instead of from my own man. Mistakes I can take — every plant has them. Being told late, that I cannot. By then it is not a mistake any more, it is my word to the customer that is broken.

Last one. A customer asks for something you think is wrong — a date you cannot hold, a tolerance you cannot promise. What happens in this company?

You say no on the phone, then. Not after. I have lost orders this way and I sleep fine. The day we start saying yes to a date we know we will miss, we become like the rest of them — and then price is the only thing left to sell on.

Anil ji, three sittings in one line — you said you don't want a life that depends on one customer. We are taking that seriously, and the whole picture comes to you in the Mirror by the end of this week. Before that, five things we need from you: audited financials, price agreements for your top ten, loan sanction letters, an org chart if one exists anywhere, and whatever monthly review format you use.

Meera will handle it. And this staff conversation — starting when?

That's the last thing. The announcement should come from you, not from us — I've drafted it in your words. Read it, change it, send it yourself. People open up for you; they don't open up for a system.

Send it over, I will take a look.

Can I say one thing? In twenty years nobody has asked me about all this so carefully. Not even the CA.