1. business and industrial

2QFY2015 Result Update | Automobile
November 5, 2014
Mahindra & Mahindra
ACCUMULATE
Performance Highlights
CMP
Target Price
Y/E March (` cr)
Net Sales
EBITDA
EBITDA Margin (%)
Adj. PAT
2QFY15
9,178
1,100
12.0
974
2QFY14
8,660
1,254
14.5
1,028
% chg (yoy)
6.0
(12.3)
(250 bp)
(5.2)
1QFY15
9,907
1,419
14.3
896
% chg (qoq)
(7.4)
(22.5)
(230 bp)
8.7
Source: Company, Angel Research
Operating performance lags estimates; higher other income and lower taxation
boost profitability: Mahindra & Mahindra (M&M)’s 2QFY2015 results were in line
with our estimates, primarily due to higher other income and lower taxation even
as the operating performance lagged estimates.
Revenues grew 6% yoy to `9,178cr, led by 5% growth in realization each in the
automotive and the farm equipment segment. Volumes remained flat on a yoy
basis. EBIDTA margin, at 12%, declined 250bp yoy and was significantly lower
than our estimate of 14.1%. Higher employee expenses due to new wage
regulations by Maharashtra government, higher discounting and product launch
expenses impacted the company’s operating performance. However, higher other
income at `490.6cr (35% yoy growth) due to increased dividend from subsidiaries
and lower taxation (tax/PBT at 21.5%) boosted the profitability. Net Profit, at
`974cr, declined 5% yoy and was in line with our estimate.
Outlook and valuation: M&M’s volumes are likely to remain under pressure in
2HFY2015 given the weakness in both the automotive (due to lack of
products in the compact UV space and due to subdued LCV sales) and the
farm equipment space (due to poor sentiments on back of lower sowing).
M&M is however likely to witness volume recovery over the next two years
(FY2016 & FY2017) in both the automotive and the tractor industry. In the
automotive segment, M&M aims to introduce two new utility vehicles over the
next one year in the compact space (where so far it has very limited presence)
enabling it to regain market share. Further, other automotive segments, ie
LCV and three-wheelers, are likely to witness recovery in FY2016 on back of
improvement in the economy. We also believe that the tractor industry growth
would revive in FY2016 on back of increased non-agri usage of tractors and
higher MSPs. Further, M&M’s margins are likely to improve in FY2016 on
back of operating leverage and reduction in discounts. We have reduced our
FY2015/16 estimates marginally given the volume and margin pressure in
the near term. However, given the improved outlook FY2016 onwards, we
maintain our positive view on the company and retain our Accumulate rating
with a revised SOTP based target price of `1,428.
`1,258
`1,428
Investment Period
12 Months
Stock Info
Automobile
Sector
Market Cap (` cr)
78,102
Net Debt (` cr)
(9,298)
Beta
0.9
52 Week High / Low
1,421/847
Avg. Daily Volume
65,485
Face Value (`)
5
BSE Sensex
27,916
Nifty
8,338
Reuters Code
MAHM.BO
Bloomberg Code
MM@IN
Shareholding Pattern (%)
Promoters
25.7
MF / Banks / Indian Fls
20.5
FII / NRIs / OCBs
40.3
Indian Public / Others
13.5
Abs. (%)
3m
1yr
3yr
Sensex
7.8
33.1
58.9
MM
2.3
38.7
50.7
Key financials (Standalone)
Y/E March (` cr)
Net Sales
% chg
Net Profit
% chg
EBITDA (%)
EPS (`)
P/E (x)
P/BV (x)
RoE (%)
RoCE (%)
EV/Sales (x)
EV/EBITDA (x)
FY2013
38,357
22.3
3,544
22.7
13.9
57.7
21.8
5.2
23.7
24.4
2.0
14.7
FY2014
38,937
1.5
3,802
7.3
13.4
61.7
20.4
4.5
22.0
20.5
2.0
14.8
FY2015E
39,758
2.1
3,440
(9.5)
12.9
55.9
22.5
3.9
17.4
18.5
2.0
15.3
FY2016E
44,615
12.2
4,017
16.8
13.1
65.2
19.3
3.4
17.7
19.2
1.8
13.4
Source: Company, Angel Research; Note: CMP as of November 5, 2014; P/E not adjusted for the value of subsidiaries
Please refer to important disclosures at the end of this report
Bharat Gianani
022-3935 7800 Ext: 6817
bharat.gianani@angelbroking.com
1
Mahindra & Mahindra | 2QFY2015 Result Update
Exhibit 1: Quarterly financial performance (MM+MVML)
Y/E March (` cr)
2QFY15
2QFY14
% chg (yoy)
1QFY15
% chg (qoq)
1HFY15
1HFY14
% chg (yoy)
Net Sales
9,178
8,660
6.0
9,907
(7.4)
19,085
18,481
3.3
Consumption of RM
6.3
6,794
(7.2)
13,101
12,853
1.9
68.6
69.5
(2.3)
1,233
1,088
6.5
5.9
8.5
2,231
1,932
6,307
5,936
(% of Sales)
68.7
68.5
Staff Costs
609
536
(% of Sales)
Other Expenses
(% of Sales)
6.6
6.2
1,161
934
68.6
13.6
624
24.3
1,070
6.3
15.5
12.6
10.8
11.7
10.5
Total Expenditure
8,077
7,406
9.1
8,488
(4.8)
16,565
15,874
4.4
Operating Profit
1,100
1,254
(12.3)
1,419
(22.5)
2,520
2,607
(3.3)
12.0
14.5
73
89
(18.5)
82
OPM (%)
Interest
10.8
13.3
14.3
13.2
14.1
(11.0)
154
172
(10.4)
Depreciation
278
224
24.0
280
(0.7)
559
453
23.3
Other Income
491
363
35.2
145
239.1
635
460
38.0
1,240
1,304
(4.9)
1,202
3.2
2,442
2,442
0.0
1,240
1,304
(4.9)
1,202
3.2
2,442
2,442
0.0
(% of Sales)
13.5
15.1
12.8
13.2
Provision for Taxation
266
276
572
555
(% of PBT)
21.5
21.2
23.4
22.7
Reported PAT
974
1,028
(5.2)
896
8.7
1,870
1,887
(0.9)
Adj PAT
974
1,028
(5.2)
896
8.7
1,870
1,887
(0.9)
PBT (excl. Extr. Items)
Extr. Income/(Expense)
PBT (incl. Extr. Items)
Adj. PATM
12.1
(3.6)
306
(13.0)
25.4
10.6
11.9
9.0
9.8
10.2
Equity capital (cr)
295.2
295.2
295.2
295.2
295.2
Adjusted EPS (`)
15.8
16.7
30.4
30.6
(5.2)
14.6
8.7
3.1
-0.9
Source: Company, Angel Research
Exhibit 2: 2QFY2015 – Actual vs Angel estimates
Y/E March (` cr)
Actual
Estimates
Variation (%)
Net Sales
9,178
8,983
2.2
EBITDA
1,100
1,266
(13.0)
EBITDA margin (%)
12.0
14.1
(210 bps)
Adj. PAT
974
965
0.9
Source: Company, Angel Research
November 5, 2014
2
Mahindra & Mahindra | 2QFY2015 Result Update
Exhibit 3: Quarterly volume performance
Volume (units)
2QFY15
2QFY14
% chg (yoy)
1QFY15
% chg (qoq)
1HFY15
1HFY14
% chg (yoy)
Total volumes
176,800
177,546
(0.4)
187,183
(5.5)
363,983
375,107
(3.0)
Auto Sales - Domestic
108,595
110,223
(1.5)
106,063
2.4
214,658
228,436
(6.0)
7,053
8,059
(12.5)
6,565
7.4
13,618
12,830
6.1
115,648
118,282
(2.2)
112,628
2.7
228,276
241,266
(5.4)
57,433
57,236
0.3
71,920
(20.1)
129,353
128,626
0.6
3,719
2,028
83.4
2,635
41.1
6,354
5,215
21.8
61,152
59,264
3.2
74,555
(18.0)
135,707
133,841
1.4
Auto Sales - Exports
Total Auto Sales
Tractor Sales - Domestic
Tractor Sales - Exports
Total Tractor Sales
Source: Company, Angel Research

M&M’s volumes remained flat yoy. Automotive segment volumes declined
2% yoy due to decline in the utility vehicle and the LCV segment. Tractor
volumes grew marginally by 3% yoy on back of poor sentiments due to
deficient rainfall.

Realisation/vehicle grew 5% yoy to `519,109. Price hikes in both the
automotive and the farm equipment segment enhanced the realisation.
Contribution/vehicle grew 5% yoy to `162,365 on back of improved
realizations and benign commodity prices.
Exhibit 5: Realisation and contribution per vehicle
Volumes
Source: Company, Angel Research
November 5, 2014
Growth (%)
2QFY15
1QFY15
4QFY14
3QFY14
2QFY14
1QFY14
4QFY13
3QFY13
(10)
2QFY13
1,50,000
1QFY13
1,60,000
(5)
1,30,000
4,90,000
1,20,000
4,80,000
4,70,000
1,10,000
4,60,000
1,00,000
Realisation/vehicle
2QFY15
0
1,70,000
1QFY15
1,80,000
1,40,000
5,00,000
4QFY14
5
1,50,000
5,10,000
3QFY14
10
1,90,000
1,60,000
5,20,000
2QFY14
2,00,000
1,70,000
5,30,000
1QFY14
15
5,40,000
4QFY13
2,10,000
3QFY13
20
2QFY13
2,20,000
1QFY13
Exhibit 4: Volumes remain flat yoy
Contribution/vehicle
Source: Company, Angel Research
3
Mahindra & Mahindra | 2QFY2015 Result Update
Exhibit 6: Segmental performance
Y/E March (` cr)
2QFY15
2QFY14
% chg (yoy)
1QFY15
% chg (qoq)
1HFY15
1HFY14
% chg (yoy)
9,206
8,708
5.7
9,928
(7.3)
19,134
18,596
2.9
Total Net Sales
Auto segment
5,793
5,555
4.3
5,989
(3.3)
11,782
11,535
2.1
Farm segment
3,407
3,148
8.2
3,933
(13.4)
7,340
7,047
4.1
6
6
7.7
7
(1.8)
13
13
(3.4)
Other segments
Total PBIT
986
1,159
(14.9)
1,291
(23.6)
2,277
2,399
(5.1)
Auto segment
460
624
(26.3)
624
(26.3)
1,085
1,210
(10.3)
Farm segment
523
534
(2.1)
666
(21.5)
1,189
1,187
0.2
Other segments
3.0
0.1
2425.0
0.4
621.4
3.5
2.7
25.9
PBIT/ Sales (%)
10.7
13.3
(260)bp
13.0
(230)bp
11.9
12.9
(100)bp
Auto segment
7.9
11.2
(330)bp
10.4
(250)bp
9.2
10.5
(130)bp
Farm segment
15.4
17.0
(160)bp
16.9
(150)bp
16.2
16.8
(60)bp
Other segments
47.3
2.0
26.7
20.5
6.4
Source: Company, Angel Research

EBIDTA margins, at 12%, declined sharply by 250bp yoy. Higher employee
expenses due to change in Maharashtra government regulations and higher
discounting and product launch expenses impacted the margins.

Higher other income at `491cr (35% yoy growth) and lower taxation however
offset the impact of poor operating performance. The net profit for the quarter
at `974cr was in line with our estimates.
Exhibit 7: EBITDA margins below estimates
Exhibit 8: Net profit boosted by higher other income
1,800
16
1,600
15
1,400
14
13
800
12
600
11
EBIDTA (`cr)
Source: Company, Angel Research
November 5, 2014
Margin %
8
6
400
4
Net Profit (`cr)
2QFY15
1QFY15
0
4QFY14
0
3QFY14
2
8
2QFY14
9
200
1QFY14
2QFY15
1QFY15
4QFY14
3QFY14
2QFY14
1QFY14
4QFY13
0
3QFY13
200
2QFY13
10
1QFY13
400
10
4QFY13
600
12
3QFY13
800
1,000
2QFY13
1,000
14
1QFY13
1,200
1,200
Margin %
Source: Company, Angel Research
4
Mahindra & Mahindra | 2QFY2015 Result Update
Conference Call – Key highlights
November 5, 2014

M&M expects the utility vehicle industry demand to moderate in 2HFY2015.
However, it expects the industry to register a volume growth of 10% in
FY2015, implying a volume growth of 8% in 2HFY2015.

M&M is continuing to lose market share in the utility vehicle segment due to
relatively lesser presence in the compact UV space which has been
outperforming the UV industry. M&M aims to launch two new compact UVs
over the next one year to regain market share.

M&M received an encouraging response to the new Scorpio with 10,000
dispatches in the first five weeks of the launch.

M&M has been outperforming the pick-up LCV space with market share
increasing from 60% in 2QFY2014 to 72.4% in 2QFY2015.

Deficient rainfall has impacted crop sowing and consequently tractor demand
has been subdued. The tractor industry remained flat during 1HFY2015. M&M
is likely to lower its earlier forecast of 5-7% industry growth for FY2015. The
company however managed to marginally gain market share by 50bp in the
tractor industry during 1HFY2015.

M&M undertook tractor production cut for five days in October 2014 to correct
inventory. Inventory has now normalized post the production curtailment.

M&M undertook price increases of about 1-1.25% both in the automotive and
the tractor segment during 1HFY2015.

Powerol segment revenues grew 24% yoy to `212cr during the quarter.

M&M has signed a MoU with the Maharashtra government to set up a new
plant at Chakan at an investment of `4,000cr. The company has maintained
its overall capex guidance of `7,500cr over the next three years.

M&M expects raw material prices to remain benign in the near term. However,
discounting and product launch expenses would remain higher in the near
term.

As per the company, the NPA levels in the pick-up segment (where it has
significant market share) are low while the proportion is higher in the SCV
segment (where it has relatively less presence). Therefore the impact of
financing on its LCV portfolio is limited.
5
Mahindra & Mahindra | 2QFY2015 Result Update
Investment arguments

Volume uptrend expected over the next two years: M&M is likely to witness
volume uptrend over the next two years (FY2016-17) and we expect double
digit volume CAGR over the next two years. M&M would launch two new
products in the compact UV space beginning FY2016 (M&M has limited
presence in compact UV which account for 40% of UV industry) enabling it to
regain market share. Further, the other two key automotive segments LCV and
three-wheelers are likely to recover given the improved economic scenario.
The tractor segment is also expected to recover in FY2016 on back of
improved sentiments and increase in the MSPs. Further, with an improvement
in the economy, the non-agri usage of tractors is also likely to increase which
would boost demand for tractors.

Investments constitute ~45% of total assets:
MM has presence in various
sectors through majority stakes in various listed companies, ie in sectors like
technology, hospitality, real estate and finance. The high growth potential of
MM's subsidiaries has supported its valuation in the past and may continue to
do so in the long term as well. Investments constitute ~45% of MM’s total
assets as of March 2014.
Outlook and valuation
M&M’s volumes are likely to remain under pressure in 2HFY2015 given the
weakness in both the automotive (due to lack of products in the compact UV space
and due to subdued LCV sales) and the farm equipment space (due to poor
sentiments on back of lower sowing). M&M is likely to witness volume recovery
over the next two years (FY2016 & FY2017) in both the automotive and the tractor
industry. In the automotive segment, M&M aims to introduce two new utility
vehicles over the next one year in the compact space (where so far it has very
limited presence) enabling it to regain market share. Further, other automotive
segments, ie LCV and three-wheelers, are likely to witness recovery in FY2016 on
back of economic improvement. We also believe that the tractor industry growth
would revive in FY2016 on back of increased non-agri usage of tractors and
higher MSPs. Further, M&M’s margins are likely to improve in FY2016 on back of
operating leverage and reduction in discounts. We have reduced our FY2015/16
estimates marginally given the volume and margin pressure in the near term.
However, given the improved outlook FY2016 onwards, we maintain our positive
view on the company and retain our Accumulate rating with a revised SOTP based
target price of `1,428.
November 5, 2014
6
Mahindra & Mahindra | 2QFY2015 Result Update
Exhibit 9: SOTP valuation
Particulars
Value/share
Core business (MM+MVML)
1,044
Remarks
At 16x FY16 earnings
Key Subsidiaries
Tech Mahindra
264 Bloomberg Consensus target price
M&MFSL
147
2.5x its FY2016 Book value
Mahindra Lifespace
17
Market cap
Mahindra Holiday Resort
30
Market cap
Mahindra CIE
25
Market cap
Ssangyong
66
Market cap
Value of subsidiaries before discount
After holdings 30% discount
549
385
Target Price
1,428
Source: Company, Angel Research
Exhibit 10: Key assumptions
Y/E March (units)
FY2011
FY2012
FY2013
FY2014
FY2015E
FY2016E
Passenger Vehicles (UV+Verito)
179,214
220,115
279,270
229,155
218,843
247,293
4-wheeler pick-up
105,588
152,691
174,233
177,587
164,268
177,409
62,142
67,440
65,510
62,614
63,866
68,976
Three wheelers
Truck & Bus
11,077
13,823
11,902
8,161
8,732
10,479
Exports
19,042
29,177
32,458
29,659
31,142
34,256
Total Automotive Sales
377,063
483,246
563,373
507,176
486,852
538,412
Domestic Tractor Sales
201,785
221,730
211,596
257,270
259,843
284,528
11,868
13,722
12,289
10,364
12,955
15,546
Total Tractor Sales
213,653
235,452
223,885
267,634
272,798
300,074
Total Volume
590,716
718,698
787,257
774,810
759,649
838,486
Exports Tractor Sales
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 ~37% 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 ~37% market share.
MM is also the only company in India that is present across all the automotive
segments. It has an installed capacity of 6lakh and 2.3lakh units/year in the
automotive and farm equipment segments respectively. In FY2011, MM acquired
a 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.
November 5, 2014
7
Mahindra & Mahindra | 2QFY2015 Result Update
Profit and loss statement
Y/E March (` cr)
FY2011
FY2012
FY2013*
FY2014*
FY2015E*
FY2016E*
Total operating income
23,460
31,847
38,357
38,937
39,758
44,615
% chg
27.8
35.7
22.3
1.5
2.1
12.2
Total expenditure
20,006
28,083
33,027
33,737
34,620
38,772
Net raw material costs
16,264
23,500
27,439
27,030
27,303
30,672
444
553
553
624
715
805
Employee expenses
1,432
1,702
1,998
2,330
2,590
2,901
Other
1,866
2,328
3,037
3,753
4,011
4,394
EBITDA
3,454
3,764
5,329
5,200
5,138
5,843
Other mfg costs
% chg
27.2
9.0
28.4
(2.4)
(1.2)
13.7
(% of total op. income)
14.7
11.8
13.9
13.4
12.9
13.1
Depreciation & amortization
414
576
818
997
1,129
1,235
3,040
3,188
5,081
4,869
4,874
5,628
% chg
EBIT
29.6
4.9
28.2
(4.2)
0.1
15.5
(% of total op. income)
13.0
10.0
13.2
12.5
12.3
12.6
72
163
296
368
339
343
Other income
552
580
570
665
865
1,020
Recurring PBT
3,520
3,606
4,785
4,500
4,535
5,286
23.6
2.5
30.1
(5.9)
0.8
16.5
Interest and other charges
% chg
Extraordinary income/ (exp.)
(113)
(134)
91
53
0
0
PBT
3,407
3,472
4,875
4,553
4,535
5,286
Tax
858
727
1,241
698
1,095
1,269
(% of PBT)
25.2
20.9
25.5
15.3
24.1
24.0
PAT (reported)
2,662
2,879
3,634
3,855
3,440
4,017
ADJ. PAT
2,550
2,745
3,544
3,802
3,440
4,017
% chg
25.7
7.7
22.7
7.3
(9.5)
16.8
(% of total op. income)
10.9
8.6
9.2
9.8
8.7
9.0
Basic EPS (`)
45.3
48.9
59.2
62.6
55.9
65.2
Adj. EPS (`)
43.4
46.6
57.7
61.7
55.9
65.2
% chg
21.1
7.3
22.7
7.0
(9.5)
16.8
Note: * (MM + MVML)
November 5, 2014
8
Mahindra & Mahindra | 2QFY2015 Result Update
Balance sheet statement
Y/E March (` cr)
FY2011
FY2012 FY2013* FY2014*
FY2015E* FY2016E*
SOURCES OF FUNDS
Equity share capital
294
295
295
295
295
295
Reserves & surplus
10,020
11,810
14,686
16,969
19,444
22,357
Shareholders’ Funds
10,313
12,105
14,981
17,265
19,739
22,652
2,321
3,174
4,152
4,308
4,308
4,308
354
527
756
1,051
1,051
1,051
Total loans
Deferred tax liability
Other long term liabilities
187
275
415
586
586
586
Long term provisions
421
363
478
557
600
670
13,598
16,444
20,782
23,767
26,284
29,268
Gross block
5,971
7,865
11,152
13,110
15,610
17,910
Less: Acc. depreciation
2,838
3,572
4,325
5,308
6,437
7,672
Net Block
3,133
4,293
6,827
7,801
9,173
10,238
774
795
919
1,254
919
919
Investments
8,926
10,297
10,894
10,464
11,664
12,864
Long term loans and adv.
1,868
1,477
2,087
3,018
3,500
4,000
117
36
504
416
416
416
4,722
6,871
8,782
10,595
10,627
12,069
615
1,188
1,823
3,141
2,802
3,285
Total Liabilities
APPLICATION OF FUNDS
Capital work-in-progress
Other noncurrent assets
Current assets
Cash
Loans & advances
1,153
1,396
827
1,031
1,034
1,160
Other
2,955
4,287
6,132
6,422
6,792
7,625
Current liabilities
5,942
7,326
9,232
9,782
10,016
11,239
Net current assets
(1,220)
(454)
(450)
813
612
830
-
-
-
-
-
-
13,598
16,444
20,782
23,767
26,284
29,268
Misc. exp. not written off
Total Assets
Note: * (MM + MVML)
November 5, 2014
9
Mahindra & Mahindra | 2QFY2015 Result Update
Cash flow statement
Y/E March (` cr)
FY2011
Profit before tax
3,407
FY2012 FY2013* FY2014* FY2015E* FY2016E*
3,472
4,785
4,500
4,535
5,286
Depreciation
414
576
583
984
1,129
1,235
Change in working capital
938
(484)
1,747
55
(138)
264
Others
(370)
479
(121)
(593)
(439)
(430)
Other income
(552)
(580)
-
-
-
-
Direct taxes paid
(858)
(727)
(1,241)
(698)
(1,095)
(1,269)
Cash Flow from Operations
2,980
2,735
5,753
4,249
3,991
5,086
(Inc.)/Dec. in fixed assets
(505)
(1,915)
(1,441)
(2,292)
(2,165)
(2,300)
(Inc.)/Dec. in investments
(2,528)
(1,372)
(1,420)
430
(1,200)
(1,200)
552
580
-
-
-
-
(2,480)
(2,707)
(2,861)
(1,863)
(3,365)
(3,500)
Other income
Cash Flow from Investing
Issue of equity
Inc./(Dec.) in loans
Dividend paid (Incl. Tax)
1,006
24
-
-
-
-
(559)
853
67
156
-
-
624
803
(894)
(966)
(966)
(1,104)
Others
(2,698)
(1,135)
(1,533)
-
-
-
Cash Flow from Financing
(1,628)
545
(2,360)
(810)
(966)
(1,104)
Inc./(Dec.) in cash
(1,129)
574
532
1,576
(339)
483
1,743
615
1,291
1,823
3,141
2,802
615
1,188
1,823
3,141
2,802
3,285
Opening Cash balances
Closing Cash balances
Note: * (MM + MVML)
November 5, 2014
10
Mahindra & Mahindra | 2QFY2015 Result Update
Key ratios
Y/E March
FY2011
FY2012 FY2013* FY2014* FY2015E* FY2016E*
Valuation Ratio (x)
P/E (on FDEPS)
29.0
27.0
21.8
20.4
22.5
19.3
P/CEPS
24.9
22.3
17.7
16.1
17.0
14.8
P/BV
7.2
6.1
5.2
4.5
3.9
3.4
Dividend yield (%)
1.0
1.0
1.0
1.1
1.1
1.3
EV/Sales
3.0
2.2
2.0
2.0
2.0
1.8
20.5
18.5
14.7
14.8
15.3
13.4
5.2
4.2
3.8
3.2
3.0
2.7
EPS (Basic)
45.3
48.9
57.7
61.7
55.9
65.2
EPS (fully diluted)
43.4
46.6
57.7
61.7
55.9
65.2
Cash EPS
50.5
56.4
71.0
77.9
74.2
85.3
DPS
12.0
13.0
13.0
14.0
14.0
16.0
175.4
205.3
244.0
280.3
320.5
367.8
13.0
10.0
13.2
12.5
12.3
12.6
EV/EBITDA
EV / Total Assets
Per Share Data (`)
Book Value
Dupont Analysis
EBIT margin
Tax retention ratio
0.7
0.8
0.7
0.8
0.8
0.8
Asset turnover (x)
2.1
2.3
2.0
1.9
1.7
1.7
20.5
17.9
20.0
20.0
15.7
16.5
2.1
4.7
5.3
7.2
6.0
6.0
(0.6)
(0.6)
(0.6)
(0.5)
(0.5)
(0.5)
9.4
9.4
11.6
13.1
10.7
11.0
ROCE (Pre-tax)
24.8
21.2
24.4
20.5
18.5
19.2
Angel ROIC (Pre-tax)
17.7
16.7
26.8
23.6
20.8
21.7
ROE
28.1
24.5
23.7
22.0
17.4
17.7
4.2
4.6
3.4
3.0
2.5
2.5
Inventory / Sales (days)
22
23
29
30
30
30
Receivables (days)
20
18
21
24
23
23
Payables (days)
63
61
79
81
81
81
(21)
(20)
(28)
(28)
(28)
(28)
ROIC (Post-tax)
Cost of Debt (Post Tax)
Leverage (x)
Operating ROE
Returns (%)
Turnover ratios (x)
Asset Turnover (Gross Block)
WC cycle (ex-cash) (days)
Solvency ratios (x)
Net debt to equity
(0.7)
(0.7)
(0.6)
(0.5)
(0.5)
(0.5)
Net debt to EBITDA
(2.1)
(2.2)
(1.6)
(1.8)
(2.0)
(2.0)
Interest Coverage (EBIT / Int.)
41.9
19.6
17.1
13.2
14.4
16.4
Note: * (MM + MVML)
November 5, 2014
11
Mahindra & Mahindra | 2QFY2015 Result Update
Research Team Tel: 022 - 39357800
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Disclosure of Interest Statement
1. Analyst ownership of the stock
Mahindra and Mahindra
No
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No
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Ratings (Returns):
November 5, 2014
Buy (> 15%)
Reduce (-5% to -15%)
Accumulate (5% to 15%)
Sell (< -15%)
Neutral (-5 to 5%)
12