mahindra and mahindra 4q fy 2013
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Please refer to important disclosures at the end of this report 1
Y/E March (` cr) 4QFY13 4QFY12 % chg (yoy) 3QFY13 % chg (qoq)
Net Sales 10,487 9,387 11.7 10,774 (2.7)
EBITDA 1,270 969 31.0 1,211 4.8
EBITDA Margin (%) 12.1 10.3 178bp 11.2 87bp
Adj. PAT 799 766 4.2 836 (4.5)
Source: Company, Angel Research
For 4QFY2013, Mahindra and Mahindra (MM) posted a strong set of results,
which were broadly in-line with our estimates on the top-line and bottom-line
front, driven by a better-than-expected EBITDA margin performance. The EBITDA
margin expanded 178bp yoy (87bp qoq) led by a strong growth of 5.3% yoy
(3.5% qoq) in net average realization coupled with softening of commodity prices. We broadly retain our revenue and earnings estimates for FY2014/15. We expect
the momentum in the utility vehicle segment to taper off slightly in FY2014 due to
rising competition; however, revival in tractor volumes on expectations of normal
monsoon is likely to result in an overall volume growth of ~9% in FY2014. We
retain our positive bias on MM and maintain our Accumulate rating on the stock.
Strong operating performance in 4QFY2013: MM registered an in-line net sales
growth of 11.7% yoy (down 2.7% qoq) to ` 10,487cr driven by a 6.5% yoy (down
6% qoq) and 5.3% yoy (3.3% qoq) growth in volumes and net average realization
respectively. While volume growth was driven by the Bolero and XUV500, net
average realization improved led by price hikes and a better product-mix. On the
operating front, the EBITDA margin expanded by 178bp yoy (87bp qoq) to
12.1%, against our expectations of 11%, on account of superior product-mix,pricing action, coupled with softening of commodity cost pressures. As a result,
the operating profit grew strongly by 31% yoy (4.8% qoq) to ` 1,270cr. The EBIT
margins in the automotive (AS) and farm equipment segments (FES) improved
109bp (131bp qoq) and 24bp yoy (48bp qoq) respectively during the quarter.
The adjusted net profit however, posted a modest growth of 4.2% yoy (down 4.5%
qoq) as a higher tax-rate (at 26.1% as against 21.1% in 3QFY2013) restricted the
growth in the bottom-line.
Outlook and valuation: The Management expects the demand environment to
remain challenging in the AS in FY2014 due to higher taxes and increasing diesel
prices. Nevertheless, the company is witnessing initial signs of revival in the FES led
by expectations of a good monsoon and a better rabi crop realization. We retain our
positive bias on MM and maintain our Accumulate rating on the stock with a sum ofthe parts (SOTP) target price of ` 1,090.
Key financials (Standalone)Y/E March (` cr) FY2012 FY2013E FY2014E FY2015E
Net Sales 31,854 40,441 45,254 51,197
% chg 35.8 27.0 11.9 13.1
Net Profit 2,753 3,353 3,605 4,137
% chg 8.0 21.8 7.5 14.8
EBITDA (%) 11.8 11.6 11.4 11.7
EPS (`) 46.7 56.9 61.2 70.2
P/E (x) 21.1 17.3 16.1 14.0
P/BV (x) 4.8 4.0 3.4 2.8
RoE (%) 24.6 25.2 22.7 21.9
RoCE (%) 21.2 22.4 21.1 21.3
EV/Sales (x) 1.5 1.1 1.0 0.8
EV/EBITDA (x) 13.4 10.3 9.0 7.4
Source: Company, Angel Research
ACCUMULATECMP ` 984
Target Price ` 1,090
Investment Period 12 Months
Stock Info
Sector
Bloomberg Code
Shareholding Pattern (%)
Promoters 25.2
MF / Banks / Indian Fls 22.5
FII / NRIs / OCBs 44.1
Indian Public / Others 8.2
Abs. (%) 3m 1yr 3yr
Sensex 3.5 22.5 14.2
MM 11.2 51.7 68.2
5
19,546
MM@IN
Nifty
Reuters Code
5,919
MAHM.BO
Face Value ( ` )
BSE Sensex
Automobile
Avg. Daily Volume
Market Cap ( ` cr)
Beta
52 Week High / Low
60,437
0.9
1,026/636
100,937
Net Debt ( ` cr) 184
Yaresh Kothari
022-3935 7800 Ext: 6844
Mahindra and Mahindra
Performance Highlights
4QFY2013 Result Update | Automobile
June 4, 2013
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Mahindra and Mahindra | 4QFY2013 Result Update
June 4, 2013 2
Exhibit 1: Quarterly financial performance (Standalone)
Y/E March (` cr) 4QFY13 4QFY12 % chg (yoy) 3QFY13 % chg (qoq) 9MFY13 9MFY12 % chg (yoy)
Net Sales 10,487 9,387 11.7 10,774 (2.7) 40,441 31,847 27.0
Consumption of RM 5,360 4,958 8.1 5,722 (6.3) 20,663 18,207 13.5(% of Sales) 51.1 52.8 53.1 51.1 57.2
Staff Costs 442 429 3.0 498 (11.2) 1,866 1,702 9.7
(% of Sales) 4.2 4.6 4.6 4.6 5.3
Purchases of TG 2,487 2,131 16.7 2,457 1.2 9,753 5,293 84
(% of Sales) 23.7 22.7 22.8 24.1 16.6
Other Expenses 928 899 3.2 886 4.8 3,450 2,881 19.7
(% of Sales) 8.8 9.6 8.2 8.5 9.0
Total Expenditure 9,217 8,418 9.5 9,563 (3.6) 35,732 28,083 27.2
Operating Profit 1,270 969 31.0 1,211 4.8 4,709 3,764 25.1
OPM (%) 12.1 10.3 11.2 11.6 11.8
Interest 51 71 (28) 47 10 191 163 17
Depreciation 199 200 (0.6) 179 11.0 711 576 23.4
Other Income 92 96 (3.6) 74 24.2 549 472 16.3
PBT (excl. Extr. Items) 1,112 794 40.0 1,060 4.9 4,356 3,498 24.6
Extr. Income/(Expense) 91 108 (16.3) - - 91 108 (16.3)
PBT (incl. Extr. Items) 1,203 903 33.3 1,060 13.5 4,447 3,606 23.3
(% of Sales) 11.5 9.6 9.8 11.0 11.3
Provision for Taxation 314 28 1,016.0 224 40.2 1,094 727 50.5
(% of PBT) 26.1 3.1 21.1 24.6 20.2
Reported PAT 889 874 1.7 836 6.3 3,353 2,879 16.5
Adj PAT 799 766 4.2 836 (4.5) 3,262 2,771 17.7
Adj. PATM 7.6 8.2 7.8 (1.9) 8.1 8.7
Equity capital (cr) 295.2 294.5 295.1 295.2 294.5
Adjusted EPS (`) 13.5 13.0 4.0 14.2 (4.5) 55.3 47.0 17.5
Source: Company, Angel Research
Exhibit 2: 4QFY2013 – Actual vs Angel estimates
Y/E March (` cr) Actual Estimates Variation (%)
Net Sales 10,487 10,300 1.8
EBITDA 1,270 1,135 11.9
EBITDA margin (%) 12.1 11.0 109bp
Adj. PAT 799 773 3.3
Source: Company, Angel Research
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Exhibit 3: Quarterly volume performance
Volume (units) 4QFY13 4QFY12 % chg (yoy) 3QFY13 % chg (qoq) 9MFY13 9MFY12 % chg (yoy)
Total volumes 198,895 186,777 6.5 211,678 (6.0) 787,257 718,586 9.6
Auto Sales - Domestic 141,465 126,090 12.2 140,378 0.8 530,919 453,987 16.9 Auto Sales - Exports 7,766 8,634 (10.1) 6,500 19.5 32,456 29,177 11.2
Total Auto Sales 149,231 134,724 10.8 146,878 1.6 563,375 483,164 16.6
Tractor Sales - Domestic 45,897 48,211 (4.8) 62,341 (26.4) 211,596 221,730 (4.6)
Tractor Sales - Exports 3,767 3,842 (2.0) 2,459 53.2 12,286 13,692 (10.3)
Total Tractor Sales 49,664 52,053 (4.6) 64,800 (23.4) 223,882 235,422 (4.9)
Source: Company, Angel Research
In-line growth in net sales: For 4QFY2013, MM registered an in-line net sales
growth of 11.7% yoy (down 2.7% qoq) to ` 10,487cr, driven by a 6.5% (down 6%
qoq) and 5.3% yoy (3.3% qoq) growth in volumes and net average realization
respectively. While volume growth was driven by the Bolero and XUV500, net
average realization improved on the back of price hikes and a better product-mix.
The net average realizations in the AS and FES segments improved 4% (1.8% qoq)
and 8.4% yoy (9.4% qoq) respectively during the quarter. However, tractor volumes
declined by 4.6% yoy (23.4% qoq) led by continued weakness in South India,
Gujarat and Maharashtra. As a result, MM's market share declined to 37.2% as
against 41.5% in 3QFY2013.
Exhibit 4: Volume growth led by automotive segment
Source: Company, Angel Research
Exhibit 5: Strong growth in net average realization
Source: Company, Angel Research
167,006 162,149178,822
190,838 186,881 185,607 191,077
211,678198,895
22.2 22.6
29.924.1
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(%)(units) Total volume yoy growth (RHS)
397,222 408,764 405,112433,791
494,501 498,254 505,513 502,773 520,545
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(%)(`) Net average realisation yoy growth (RHS)
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Mahindra and Mahindra | 4QFY2013 Result Update
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Exhibit 6: Segmental performance
Y/E March (` cr) 4QFY13 4QFY12 % chg (yoy) 3QFY13 % chg (qoq) 9MFY13 9MFY12 % chg (yoy)
Total Net Sales 10,497 9,388 11.8 10,779 (2.6) 40,468 31,880 26.9
Auto segment 7,616 6,611 15.2 7,361 3.5 28,405 20,101 41.3Farm segment 2,854 2,759 3.4 3,404 (16.2) 11,990 11,690 2.6
Other segments 26 18 46.5 14 81.6 73 89 (18.9)
Total PBIT 1,211 1,013 19.6 1,154 5.0 4,472 3,699 20.9
Auto segment 747 576 29.7 625 19.4 2,597 1,856 39.9
Farm segment 456 434 5.0 527 (13.6) 1,858 1,833 1.4
Other segments 8.7 3.1 175.5 1.2 603.3 17.2 10.9 57.8
PBIT/ Sales (%) 11.5 10.8 75bp 10.7 83bp 11.0 11.6 (55)bp
Auto segment 9.8 8.7 109bp 8.5 131bp 9.1 9.2 (9)bp
Farm segment 16.0 15.7 24bp 15.5 48bp 15.5 15.7 (18)bp
Other segments 33.1 17.6 8.5 23.7 12.2
Source: Company, Angel Research
EBITDA margin surprises positively: On the operating front, the EBITDA margin
expanded by 178bp yoy (87bp qoq) to 12.1%, against our expectations of 11%,
on account of superior product-mix, pricing action, coupled with softening of
commodity cost pressures. This resulted in a 70bp yoy (110bp qoq) savings on the
raw-material cost front. Employee expense as a percentage of sales too was lower
due to reversal of provisions made in 4QFY2012 relating to retirement benefits. As
a result, the operating profit grew strongly by 31% yoy (4.8% qoq) to ` 1,270cr. The
EBIT margins in the AS and FES segments improved 109bp (131bp qoq) and 24bp
yoy (48bp qoq), respectively, during the quarter.
Exhibit 7: EBITDA margin surprises positively
Source: Company, Angel Research
Exhibit 8: Adjusted net profit at ` 799cr
Source: Company, Angel Research
Adjusted net profit at `799cr: MM’s adjusted net profit grew modestly by 4.2% yoy
(down 4.5% qoq) to ` 799cr; bottom-line growth was restricted by a higher tax-rate
(26.1% as against 21.1% in 3QFY2013) for the quarter.
12.9 13.3 12.0 12.2 10.3 11.8 11.4 11.2 12.1
72.2 72.9 73.7 75.3 75.5 76.1 76.1 76.9 75.8
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(%) EBITDA margin Raw material cost/sales
6 0 7
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(%)( ` cr) Net profit Net profit margin (RHS)
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Mahindra and Mahindra | 4QFY2013 Result Update
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Exhibit 9: Quarterly financial performance (MM + MVML)
Y/E March (` cr) 4QFY13 4QFY12 % chg (yoy) 3QFY13 % chg (qoq) 9MFY13 9MFY12 % chg (yoy)
Net sales 9,983 9,108 9.6 10,243 (2.5) 38,357 31,370 22.3
Total expenditure 8,548 8,016 6.6 8,863 (3.6) 33,027 27,220 21.3Material cost 7,102 6,586 7.8 7,375 (3.7) 27,397 22,395 22.3
% of net sales 71.1 72.3 (116) 72.0 (85) 71.4 71.4 4
Employee expense 478 455 5.0 532 (10.2) 1,998 1,795 11.3
% of net sales 4.8 5.0 (21) 5.2 (41) 5.2 5.7 (51)
Other expenses 968 975 (0.8) 956 1.2 3,633 3,031 19.9
% of net sales 9.7 10.7 (102) 9.3 36 9.5 9.7 (19)
Operating profit 1,435 1,092 31.4 1,380 4.0 5,329 4,150 28.4
OPM (%) 14.4 12.0 239 13.5 91 13.9 13.2 66
Depreciation 228 226 0.7 205 11.0 818 670 22.1
EBIT 1,207 866 39.5 1,174 2.8 4,512 3,481 29.6
Interest 78 110 (28.7) 72 8.3 296 287 3.1
Other income 102 112 (9.5) 76 34.1 570 484 17.6
PBT 1,230 868 41.8 1,177 4.5 4,785 3,678 30.1
Exceptional items 91 108 0 91 108
PBT after Exceptional item 1,321 976 35.3 1,177 12.2 4,875 3,786 28.8
Tax expense 358 65 451.3 262 36.4 1,241 789 57.3
% of PBT 27.1 6.7 22.3 25.5 20.8
Reported PAT 963 911 5.7 915 5.2 3,634 2,997 21.3
Adj. PAT 872 803 8.6 915 (4.7) 3,544 2,889 22.7
Source: Company, Angel Research
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Mahindra and Mahindra | 4QFY2013 Result Update
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Investment arguments
AS and FES segments to drive volume growth: The Management expects the
utility vehicle (UV) industry to outperform the passenger car industry over the
next couple of years, driven by new launches. However, on account of the
recent excise duty increase of 3%, higher competitive intensity, coupled with
general weakness in consumer sentiments, MM's UV segment’s outlook looks
rather muted in the near term (expected to grow at 8% in FY2014). On the
other hand, the outlook for tractor sales has improved over the last few
months, led by expectations of a normal monsoon in FY2014. As a result, the
Management has increased its guidance for the FES segment by 2% and now
expects the industry to grow by 6-8% with an upward bias on normal
monsoons. We expect an ~10% and ~11% volume CAGR in AS and FES
segments respectively over FY2013-15, leading to an overall volume CAGR of
10% over the same period.
New ventures firming up well: MM’s new ventures in the commercial vehicle
(CV) space are firming up well. New product launches such as the Gio and the
Maxximo have received a good response from the market. Further, launch of
new products in the medium and heavy commercial vehicle (MHCV) space has
positioned the company in line with other major domestic CV players such as
Ashok Leyland and Tata Motors. This is expected to substantially augment the
company’s overall volume growth, supported by its well-known brand equity
and extensive sales network.
Investments constitute ~65% of the balance sheet: MM also has majority stakes in various listed companies in other sectors, including technology,
property and finance. The high-growth potential of MM's subsidiaries is
expected to unlock the actual value of the stock over the years. Listing of its
subsidiaries has been supporting the company’s valuation in the recent past
and may continue to do so in the long term as well.
Outlook and valuation
We broadly retain our revenue and earnings estimates for FY2014/15. We expect
the momentum in the utility vehicle segment to taper off slightly in FY2014 due to
rising competition; however, revival in tractor volumes on expectations of normalmonsoon is likely to result in an overall volume growth of ~9% in FY2014.
Exhibit 10: Change in estimates
Y/E March Earlier Estimates Revised Estimates % chg
FY2014E FY2015E FY2014E FY2015E FY2014E FY2015E
Net Sales (` cr) 44,550 50,260 45,254 51,197 1.6 1.9
OPM (%) 11.4 11.7 11.4 11.7 0bp (0)bp
EPS (`) 59.6 68.3 61.2 70.2 2.8 2.9
Source: Company, Angel Research
The Management expects the demand environment to remain challenging in the
AS in FY2014 due to higher taxes and increasing diesel prices. Nevertheless, the
company is witnessing initial signs of revival in the FES led by the expectations of
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Mahindra and Mahindra | 4QFY2013 Result Update
June 4, 2013 7
good monsoon and better rabi crop realization. MM is working on three new
platforms on the passenger car side, along with a slew of product variants. It is
also working with Ssangyong Motor on six new engine options, including gasoline
and diesel variants. We retain our positive bias on MM and maintain ourAccumulate rating on the stock. Our sum of the parts (SOTP) target price works out
to ` 1,090, wherein the company’s core business fetches ` 843/share and the value
of its investments works out to ` 247/share.
Exhibit 11: SOTP valuation
Key SubsidiaryNo. of Shares
(cr)CMP
(`)Value(` cr)
Mahindra Financial Services 5.8 239 1,391
Mahindra Lifespace Developers 2.1 391 813
Tech Mahindra 6.1 942 5,711
Mahindra Forgings 4.9 49 239
Mahindra Holidays and Resorts 6.7 249 1,656
Mahindra Ugine Steel 1.6 41 67
Other Investments (at book value) 8,306
Total value (` cr) 18,182
Per share value of investments (20% discount) 247
MM's Core Business/share value (12x FY15E EPS) 843
MM's Target Price with investments (`) 1,090
Source: Company, Angel Research
Exhibit 12: Key assumptions
Y/E March (units) FY2010 FY2011 FY2012 FY2013E FY2014E FY2015E
Passenger Utility Vehicles (UV) 150,726 169,205 202,276 264,137 285,268 319,500
4-wheeler pick-up 76,387 105,588 152,691 174,233 188,172 206,989
LCV 9,829 11,077 13,823 11,902 12,616 13,878
Logan 5,332 10,009 17,839 15,137 17,408 20,019
Three wheelers 44,439 62,142 67,440 65,510 69,441 72,913
Exports 11,567 19,042 29,177 32,456 37,324 42,923
Total Automotive Sales 298,280 377,063 483,246 563,375 610,228 676,221
Domestic Tractor Sales 165,633 201,785 221,730 211,596 232,756 260,686
Exports Tractor Sales 9,001 11,868 13,722 12,286 13,515 14,866
Total Tractor Sales 174,634 213,653 235,452 223,882 246,270 275,552
Total Volume 472,914 590,716 718,698 787,257 856,498 951,773
Source: Company, Angel Research
Exhibit 13: Angel vs consensus forecast
Angel estimates Consensus Variation (%)
FY14E FY15E FY14E FY15E FY14E FY15E
Total op. income (` cr) 45,254 51,197 44,902 51,276 0.8 (0.2)
EPS ( ` ) 61.2 70.2 60.6 69.9 1.0 0.5
Source: Bloomberg, Angel Research
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Mahindra and Mahindra | 4QFY2013 Result Update
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Exhibit 14: One-year forward P/E chart
Source: Company, Angel Research
Exhibit 15: Premium/Discount to Sensex P/E
Source: Company, Angel Research
Exhibit 16: Automobile - Recommendation summary
Company Reco.CMP
(`)Tgt. price
(`)Upside
(%)
P/E (x) EV/EBITDA (x) RoE (%) FY13-15E EPS
FY14E FY15E FY14E FY15E FY14E FY15E CAGR (%)
Ashok Leyland Accumulate 24 27 11.6 22.9 10.8 7.1 5.1 6.2 12.5 102.9
Bajaj Auto Buy 1,769 2,056 16.2 15.1 12.9 10.3 8.3 39.9 37.2 14.2
Hero MotoCorp Accumulate 1,668 1,819 9.1 15.1 11.9 7.8 7.0 39.8 40.7 14.9
Maruti Suzuki Buy 1,549 1,847 19.3 14.4 12.6 7.1 6.1 16.2 16.0 24.7
Mahindra &Mahindra
Accumulate 984 1,090 10.8 16.1 14.0 9.0 7.4 22.7 21.9 11.1
Tata Motors Accumulate 306 347 13.5 8.5 7.4 4.1 3.4 24.6 23.2 13.8
TVS Motor Accumulate 37 41 9.6 7.4 6.4 2.7 2.0 18.1 18.5 15.3
Source: Company, Angel Research
Company background
Mahindra and Mahindra, the flagship company of the Mahindra Group, is the
largest manufacturer of UVs and tractors in India with an ~52% and ~42% market
share in these segments, respectively. The company is also the second largest
player in the light commercial vehicle (LCV) space, with an ~33% market share.
MM is also the only company in India that is present across all the automotive
segments. MM has an installed capacity of 6lakh and 2.3lakh units/year in the
automotive and farm equipment segments respectively. In FY2011, MM acquireda 70% stake in Ssangyong Motor Co (SYMC), transforming itself into a global
UV player. Apart from the core auto business, the company has
subsidiaries/associates in various businesses such as IT, NBFC, auto ancillaries,
hospitality and infrastructure.
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Mahindra and Mahindra | 4QFY2013 Result Update
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Profit and loss statement (Standalone)
Y/E March (` cr) FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E
Total operating income 18,363 23,460 31,854 40,442 45,254 51,197
% chg 42.1 27.8 35.8 27.0 11.9 13.1Total expenditure 15,647 20,006 28,083 35,732 40,095 45,233
Net raw material costs 12,346 16,264 23,500 30,416 33,624 37,886
Other mfg costs 379 444 553 700 815 947
Employee expenses 1,190 1,432 1,702 1,866 2,444 2,790
Other 1,732 1,866 2,328 2,750 3,213 3,609
EBITDA 2,716 3,454 3,771 4,709 5,159 5,965
% chg 204.5 27.2 9.2 24.9 9.5 15.6
(% of total op. income) 14.8 14.7 11.8 11.6 11.4 11.7
Depreciation & amortization 371 414 576 711 803 911
EBIT 2,345 3,040 3,195 3,999 4,356 5,053
% chg 290.6 29.6 5.1 25.2 8.9 16.0
(% of total op. income) 12.8 13.0 10.0 9.9 9.6 9.9
Interest and other charges 157 72 163 191 202 202
Other income 658 552 574 640 653 666
Recurring PBT 2,847 3,520 3,606 4,447 4,806 5,517
% chg 166.7 23.6 2.5 23.3 8.1 14.8
Extraordinary income/ (exp.) (59) (113) (126) - - -
PBT 2,788 3,407 3,480 4,447 4,806 5,517
Tax 759 858 727 1,094 1,202 1,379
(% of PBT) 27.2 25.2 20.9 24.6 25.0 25.0
PAT (reported) 2,088 2,662 2,879 3,353 3,605 4,137
ADJ. PAT 2,029 2,550 2,753 3,353 3,605 4,137
% chg 158.1 25.7 8.0 21.8 7.5 14.8
(% of total op. income) 11.0 10.9 8.6 8.3 8.0 8.1
Basic EPS (`) 36.9 45.3 48.9 56.9 61.2 70.2
Adj. EPS (`) 35.9 43.4 46.7 56.9 61.2 70.2
% chg 148.7 21.1 7.7 21.8 7.5 14.8
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Balance sheet statement (Standalone)
Y/E March (` cr) FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E
SOURCES OF FUNDS
Equity share capital 283 294 295 295 295 295Reserves & surplus 7,544 10,020 11,810 14,246 16,976 20,207
Shareholders’ Funds 7,827 10,313 12,105 14,541 17,270 20,501
Total loans 2,880 2,321 3,174 3,424 3,674 3,674
Deferred tax liability 240 354 527 527 527 527
Other long term liabilities 187 197 197 197 197
Long term provisions 421 483 483 483 483
Total Liabilities 10,947 13,598 16,486 19,172 22,151 25,383
APPLICATION OF FUNDS
Gross block 5,276 5,971 7,838 9,216 10,428 11,837
Less: Acc. depreciation 2,538 2,838 3,552 4,263 5,066 5,978
Net Block 2,739 3,133 4,286 4,952 5,362 5,860
Capital work-in-progress 964 774 795 1,014 1,147 1,302
Investments 6,398 8,926 10,310 11,503 13,291 15,230
Long term loans and advances 1,868 1,477 1,477 1,477 1,477
Other noncurrent assets 117 36 36 36 36
Current assets 6,047 4,722 6,941 8,159 9,591 11,099
Cash 1,743 615 1,188 1,275 1,827 2,321
Loans & advances 1,856 1,153 1,406 1,820 2,036 2,304
Other 2,447 2,955 4,347 5,064 5,727 6,474
Current liabilities 5,200 5,942 7,360 7,969 8,753 9,620
Net current assets 847 (1,220) (419) 190 838 1,478
Misc. exp. not written off - - - - - -
Total Assets 10,947 13,598 16,486 19,172 22,151 25,383
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Cash flow statement (Standalone)
Y/E March (` cr) FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E
Profit before tax 2,788 3,407 3,480 4,447 4,806 5,517
Depreciation 371 414 576 711 803 911Change in working capital (394) 938 (228) (604) (139) (220)
Others 990 (370) 207 - - -
Other income (658) (552) (574) (640) (653) (666)
Direct taxes paid (759) (858) (727) (1,094) (1,202) (1,379)
Cash Flow from Operations 2,337 2,980 2,735 2,820 3,617 4,164
(Inc.)/Dec. in fixed assets (700) (505) (1,888) (1,596) (1,346) (1,564)
(Inc.)/Dec. in investments (612) (2,528) (1,385) (1,193) (1,788) (1,939)
Other income 658 552 574 640 653 666
Cash Flow from Investing (653) (2,480) (2,699) (2,149) (2,481) (2,837)
Issue of equity 719 1,006 24 - - -
Inc./(Dec.) in loans (1,173) (559) 853 250 250 0
Dividend paid (Incl. Tax) 312 624 803 833 833 833
Others (1,373) (2,698) (1,142) - - -
Cash Flow from Financing (1,515) (1,628) 538 (583) (583) (833)
Inc./(Dec.) in cash 169 (1,129) 574 87 552 493
Opening Cash balances 1,574 1,743 615 1,188 1,275 1,827
Closing Cash balances 1,743 615 1,188 1,275 1,827 2,321
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Key ratios
Y/E March FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E
Valuation Ratio (x)
P/E (on FDEPS) 27.5 22.7 21.1 17.3 16.1 14.0P/CEPS 23.2 19.5 17.4 14.3 13.2 11.5
P/BV 7.1 5.6 4.8 4.0 3.4 2.8
Dividend yield (%) 1.0 1.2 1.3 1.3 1.3 1.3
EV/Sales 2.6 2.0 1.5 1.1 1.0 0.8
EV/EBITDA 19.3 14.6 13.4 10.3 9.0 7.4
EV / Total Assets 4.8 3.7 3.0 2.5 2.1 1.7
Per Share Data (`)EPS (Basic) 36.9 45.3 48.9 56.9 61.2 70.2
EPS (fully diluted) 35.9 43.4 46.7 56.9 61.2 70.2
Cash EPS 42.4 50.5 56.5 69.0 74.8 85.7
DPS 9.7 12.0 13.0 12.5 12.5 12.5
Book Value 138.1 175.4 205.3 246.7 293.0 347.9
Dupont Analysis
EBIT margin 12.8 13.0 10.0 9.9 9.6 9.9
Tax retention ratio 0.7 0.7 0.8 0.8 0.8 0.8
Asset turnover (x) 2.2 2.1 2.3 2.4 2.4 2.4
ROIC (Post-tax) 20.2 20.5 17.9 18.2 17.1 17.5
Cost of Debt (Post Tax) 3.3 2.1 4.7 4.4 4.3 4.1
Leverage (x) (0.5) (0.6) (0.6) (0.6) (0.6) (0.6)
Operating ROE 10.9 9.4 9.4 9.8 9.4 9.2
Returns (%)
ROCE (Pre-tax) 23.2 24.8 21.2 22.4 21.1 21.3
Angel ROIC (Pre-tax) 18.7 17.7 16.7 16.9 16.1 16.4
ROE 31.0 28.1 24.6 25.2 22.7 21.9
Turnover ratios (x)
Asset Turnover (Gross Block) 3.6 4.2 4.6 4.7 4.6 4.6
Inventory / Sales (days) 22 22 23 24 26 26
Receivables (days) 23 20 19 19 19 19
Payables (days) 69 63 61 60 59 58
WC cycle (ex-cash) (days) (22) (21) (20) (12) (8) (7)
Solvency ratios (x)Net debt to equity (0.7) (0.7) (0.7) (0.6) (0.7) (0.7)
Net debt to EBITDA (1.9) (2.1) (2.2) (2.0) (2.2) (2.3)
Interest Coverage (EBIT / Int.) 15.0 41.9 19.6 20.9 21.6 25.0
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Mahindra and Mahindra | 4QFY2013 Result Update
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Mahindra and Mahindra
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