analyst conference - mahindra & mahindra · market price as on 31st march 2015 convenience rate...

Analyst Conference

May 29, 2015

V S Parthasarathy

Group CFO

1

2

Key Theme

Economy: Global & Local

Mahindra’s resilience

Financial Performance

The Mahindra Way

Milestone & Achievement

-6

-4

-2

0

2

4

6

8

10

China India Russia Brazil South Africa

Emerging Market GDP Growth 2012 2013 2014 2015 2016 2017

Historical Forecast

Global Economy – Mixed signals

India – Stage is

ready

China – signs of

slowing down

-4

-3

-2

-1

0

1

2

3

4

US Japan UK Germany Italy France

Developed Market GDP Growth Historical Forecast

2012 20142013 201720162015

US - forecast are being revised

downwards; still growth is positive

Source: IMF, World Economic Outlook Database, April 2015

7%

India is the only country to have above 7% growth

World Financial Market - key action

Quantitative Easing -Divergent monetary path

Interest Rate Scenario -Push for growth

US discontinued QE

Japan & Europe have started

Fed likely to increase interest rates

India to decrease, Japan & Europe to continue lower rate

Interest Rate

Growth

3.7

5.6

3.9

0.4 0.5

2.8

-4.2

3.93.2 2.8

4.9

2.1

IIP (% Change Y-O-Y)

8.37.47.87.7

6.55.5

4.45.05.25.45.34.9

India Inflation (% Change Y-O-Y)

-1.3-1

-1.3

-2.3

-2.8 -2.7

-4.2-4.7

-1.7

CAD (% TO GDP)

8.007.75

7.50

Ju

n-1

4

Ju

l-14

Au

g-1

4

Sep

-14

Oct-

14

No

v-1

4

Dec-1

4

Jan

-15

Fe

b-1

5

Ma

r-15

Ap

r-15

Ma

y-1

5

Ju

n-1

5

Ju

l-15

India Interest Rate (%Change Y-O-Y)

0

50000

100000

150000

200000

250000

300000

350000

2012 2013 2014 2015

India's Infrastructure Budget(Rs Crores)

India on path, directed by government focus

Rating outlook changed from ‘Stable’ to ‘Positive’ by Moody’s

6

Make In India

Ease of doing business

Budget Long Term focused

GST roll-out

Incr. FDI limits

Coal & Mining reforms

Interest rate-cut

India on right path - Government focus

Direct Subsidy TransferJAM Trinity

External FrontSeveral Trade agreement

But…is the worst over?

• Is Lower Crude Prices sustainable?

• When shrinking inflation will translate to higher IIP?

• When we will see credit growth?

• Is the real effect of Fed action seen yet?

• Will the interest rate-cut by RBI reaches borrower?

• Rupee depreciation?

• Agri GDP?7

8

Rural economy affected…

Unseasonal and erratic rainfall

Lower increase in MSP

High interest cost for most of the F15

Lower increase in non-agri income

Auto volume with Rural concentration impacted

Tractor Q4 F15 was worst in last 40 quarters–30% de-growth

9

In difficult times, Mahindra has shown resilience

Financials Snapshots

Q4 FY 14

10,048

1,282

1,173

With full year impact of MTBL Merger

12.8%

Quarterly Performance – M&M + MVML Snapshot

Total Income

EBIDTA

PAT 50.0%

21.7%

9.2%

OPM

11

586

1,004

9,123

Q4 FY 15

11.0%

As presented to stock exchange

Exceptional & One time items(Rs. Crs)

12

Particular F14 Q4 F15 Q4 Diff

MTBD merger 298 (298)

Sale of Shares 53 37 (16)

One time items (Post-tax) - (68) (68)

Total impact 351 (31) (382)

Q4 FY 14

10,048

1,282

823

With full year impact of MTBL Merger

12.8%

Quarterly Performance – M&M + MVML Snapshot

Total Income

EBIDTA

PAT 25.0%

16.3%

9.2%

OPM

13

617

1,073

9,123

Q4 FY 15

11.8%

Adjusted for one time & Exceptional Items

Demonstrated Resilience(Rs. Crs)

14

M&M + MVML (Standalone)

Resilient & agile to face difficult situation….

Net Revenue

EBIDTA

OPM %

PAT

2,519 2,950

39 339

1.5% 11.5%

1 405

AD Volumes 39025 50879

Q3 F2009 Vs F2008

FES Volumes 22191 26318

(14.6%)

(88.6%)

(99.7%)

(23.3%)

(15.7%)

9,123 10,048

1,073 1,282

11.8% 12.8%

617 823

1,23,169 1,36,478

Q4 F2015 Vs F2014

38,761 55,438

Change

(9.2%)

(16.3%)

(25.0%)

(9.9%)

(30.1%)

Change

Note: Adjusted for one time items & exceptional items.

Segment Revenue & Results – Q4

15

Q4 F 15 6621

Q4 F 14 6890

% Inc/

(Dec)(3.9)

Q4 F 15 613

Q4 F 14 619

% Inc/

(Dec)(1.0)

AS

Segment Revenue

Segment Result

Q4 F 15 2535

Q4 F 14 3188

% Inc/

(Dec)(20.5)

Q4 F 15 322

Q4 F 14 544

% Inc/

(Dec)(40.8)

FES

Segment Revenue

Segment Result

(Adjusted for Exceptional & one time items)

Adjusted for exceptional & one time items

16

Margin of Safety Q4 F15 (%)

MOS37%

BEP63%

AD+MVML

MOS38%

BEP62%

FES

MOS35%

BEP65%

M&M+MVML

Yearly Performance – M&M + MVML Snapshot

Total Income

EBIDTA

PAT 3,423

4,603

37,468

FY 15 FY 14

38,817

5,248

3,905 12.3%

12.3%

3.5%

OPM 12.3% 13.5%

17

As presented to stock exchange

Performance Indicators

Particulars F – 2015 F – 2014

OPM (%) 12.3 13.5

ROCE 18.8 22.8

Interest Coverage Ratio 15.2 14.9

Debt / Service Ratio 2.4 5.7

EPS (Basic) (Rs.) 58.0 66.2

Book Value (Rs.) 335.92 293.26

18

19

Strong Growth Trajectory

Net Revenue PAT

8571,068 1,103

868

2,068

2,6872,997

3,6343,905

3,503

FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

M&M + MVML (Standalone)

8,223 10,026 11,541 13,094

18,60423,564

31,370

38,356 38,817 37,468


EBITDA

9671,257 1,367

1,093

2,965

3,6214,150

5,329 5,248

4,603


(Rs. Crs)

20

20

DE Ratio

M&M + MVML

Gearing Multiple

M&M + MVML

Robust Financial Risk Profile

0.31

0.46

0.60

0.77

0.45

0.32 0.37

0.30 0.28 0.22

(0.14)

(0.02)

0.27 0.31

0.09

0.19 0.17

0.09

0.01 0.03

F06 F07 F08 F09 F10 F11 F12 F13 F14 F15

Gross Net

0.79

1.06

1.66

2.79

1.06

0.82 0.98

0.76 0.83 0.82

F06 F07 F08 F09 F10 F11 F12 F13 F14 F15

21

29th May 2014 7th August 2014

8th September 2014 29th September 2014

Resilience in earnings despite cyclical

upturns/downturns

22

Market leader in India, with 33% market share*

World’s largest tractor company by units sold;

Market leader in India for >30 years with 41% share*

Largest rural NBFC in India

AUTOMOTIVE

FARM

FINANCE

HOLIDAYS India’s No.1 Vacation Ownership company

IT Top 5 IT service provider from India

PRE-OWNED CARS India’s largest multi-brand, pre-owned car company

We are leaders in most of our businesses

* Sep2014

We also demonstrated leadership resilienceContinued leadership

23Copyright © 2013 Mahindra & Mahindra Ltd. All rights reserved. 23

F-2015

Consolidated Result

Rs. 5,154 crs

Rs. 3,382 crs

34%

Financial Highlights

Total income

Rs. 78,736 crs

Rs. 76,015 crs

4%

M&M Consolidated – FY 15 Vs FY 14

Rs. 7,843 crs

Rs. 6,150 crs

22%

EBIDTA PAT before MI

24

Consolidated Segment Report

25

44875

43349

35000

37000

39000

41000

43000

45000

47000

2358

1319

1000

1500

2000

2500

1688415929

10000

11000

12000

13000

14000

15000

16000

17000

18000

2480

1968

1000

1500

2000

2500

3000

Farm Equipment

5306

6053

3000

4000

5000

6000

7000

14611394

500

1000

1500

2000

Segment Revenue

Segment Result

Automotive

FY14 FY15 FY14 FY15

Financial Service

FY14 FY15

FY14 FY15 FY14 FY15 FY14 FY15

-3% -6% 14%

-44% -21% -5%

26

817 812

500

1000

121

92

50

100

150

722

1110

200

500

800

1100

1400

161

448

100

200

300

400

500

IDS

1298 1320

500

1000

1500

95

105

50

70

90

110

Hospitality

FY14 FY15 FY14 FY15

Steel Trading

FY14 FY15

FY14 FY15 FY14 FY15 FY14 FY15

-1% 54% 2%

-24% 179% 11%

Segment Revenue

Segment Result

27

Segment Revenue

Segment Result

28

-27

-114

10

40

70

100

3812

1029

0

1000

2000

3000

4000

5000

Systech

FY14 FY15

FY14 FY15

-73%

-324%

30

45

0

50

FY14 FY15

292 353

0

300

600

900

1200

1500

IT Services

FY14 FY15

21%

49%

Others

-503

-618

100

200

300

400

500

600

700

-23%

FY14 FY15

3208

3914

2000

2500

3000

3500

4000

4500

22%

FY14 FY15

Listed companies performance - PAT

F15 – Rs.913 crs

F14 – Rs.954 crs

F15 – Rs 266 crs

F14 – Rs 101 crs

F15 – Rs. 2,628 crs

F14 – Rs. 2,682 crs

F15 – Rs.95 crs

F14 – Rs.87 crs

29

PAT before EI PAT before EI

Other unlisted companies growing in strength..

Last 3 years PAT…. CAGR

Mahindra Integrated Township 88%

Mahindra World City Jaipur 51%

Mahindra South Africa 66%

Mahindra Logistics Limited 30%

Mahindra Rural Hosing Finance 47%

30

31

356.5

228.2 182.5 161.9 127.9

87.2 133.1

65.2 114.1

36.4

335.7

52.8 90.6

-120.8

99.6 38.4 187.0 128.4

170.1

F 2015F 2014F 2013F 2012F 2011F 2010F 2009F 2008F 2007F 2006

Value from group companies

Fruits at regular interval

Dividend

Bonus & Split from TechM

32

Invested in small cap…now they are blue chip

Tech Mahindra

165

2644

Investment Current Value

MMFSL

25

1,211


Mahindra Holidays

4.4

281


Mahindra Lifespaces

45.4

160


$ Mil

Mahindra CIE

87

232


Ssangyong

350

838


Market Price as on 31st March 2015

Convenience rate assumed $ = Rs 61

33

Value Creation

Group Market Cap (Rs Cr)

1434 6583

168353

F1995 F2005 F2015

•Prices as on 31ST March

Market Cap* (31st Mar15) Rs Crs

Mahindra & Mahindra 73,773

Tech Mahindra 60,492

MMFSL 14,441

Ssangyong 6,995

Mahindra Holidays 2,289

Mahindra Lifespaces 1,923

Swaraj Engines 1,004

Mahindra CIE 6,987

EPC Industries 447

Total 1,68,353$ 27.6bn

34

We are federation of businesses…

10 different business sector run by Independent President / Group President

Independence to Board of Director, strategy formation & execution

Group role is to Review, Challenge & Recommend - MAPC

Listed co. to raise the money own their own – PE, Borrow, Rights etc.

Federation enables liberations - leadership, bandwidth and financial return

It enables huge growth in individual businesses

Federation is to Enable – Enhance – Engender (3E)

It enables Innovation & Entrepreneurship

Federation is Synergy without bureaucracy

35

CORE PURPOSE

AC

CE

PT

ING

NO

LIM

ITS

ALT

ER

NA

TIV

E

TH

IHN

KIN

G

DR

IVIN

G P

OS

ITIV

E

CH

AN

GE

CORE VALUES

What unites us…

Code of Conduct

Corporate Governance Policy

Corporate Social Responsibility

Golden Peacock Award for Corporate Governance

Core Purpose & Rise Philosophy Focus on Governance

3.03

7.40

56.53

0.00 10.00 20.00 30.00 40.00 50.00 60.00

Gold

Sensex

M&M

Last 5 years

2.18

1.60

1.06

Last 11 years

10.22

5.00

2.78

Last 21 years

As at 31st March 2015

Result speaks

$/Oz

36

Returns in No. of times & CAGR %

21%

10%

5%

24%

16%

10%

17%

10%

1%

37

Awards & Accolades

India's Best Boards BY The Economic Times - Hay Group survey 2014

India's Best companies for CSR 2014 – 3rd Ranked at by The Economic Times

Best Place to Work –No. 2 in India’s Best Manufacturing Companies

Top Companies for Leaders 2014 Ranked No. 10 worldwide and No. 3 in India

Mahindra Insurance Brokers Ltd. declared

“Broker of the Year”at 18th Asia Insurance Industry Awards 2014

Mahindra Reva bags prestigious Manufacturing Today Award 2014

Excellence in Technology

Mahindra Logistics wins the '3PL Company of the Year - Automotive' Award

"No stars gleam as brightly as those which

glisten in the polar sky. No water tastes so

sweet as that which springs amid the desert

sand. And no faith is so precious as that which

lives and triumphs through adversity“

- Charles H Spurgeon

38

Thank You

analyst conference - mahindra & mahindra · market price as on 31st march 2015 convenience rate...

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