United States

Analyst Research Report Snapshot


Mahindra & Mahindra Ltd. | Q3FY13 Result Update




IndiaNivesh Securities Pvt Ltd


08 Feb 2013





Companies referenced:


Available for Immediate Download

Mahindra & Mahindra Ltd. | Q3FY13 Result Update Slightly below expectations, muted guidance on tractor volumes Mahindra & Mahindra’s reported Q3FY13 numbers (standalone) were slightly below street expectations. Quarter witnessed strong performance in Auto segment’s volume front but margins were slightly hit by higher raw material cost and drop in export volume. Top line grew healthy by 28.6% YoY and 10.2% QoQ to Rs 106.42 bn vs. consensus of Rs. 107.50 bn on the back of healthy volume of UVs. Average realization (Auto+ tractor) increased by 15% YoY (down1.24% QoQ) to Rs. 0.508 mn. However, EBITDA margin contracted by 98 bps YoY and 20 bps QoQ to 11.4 % due to increase in raw material cost and lower export volume. Raw material cost (adjusted) increased by 153 bps YoY to 76.9% (as a percentage of sales) which exerted pressure on EBITDA margins. Despite lower effective tax rate, company’s reported net profit stood at Rs 8.36 bn, slightly below consensus of Rs 8.64 bn due to lower EBITDA. Effective tax was lower (Effective tax rate stood at 21.1% vs. 27.6% in Q3FY12) as company got tax benefit due to higher R&D expenditure. Valuation: The company is going strong with volumes especially on automobile front. At CMP of Rs 883, M&M is trading at 8.3x FY13e and 7.14x FY14e consolidated EV/EBITDA. We have a positive view on the stock due to its strong product portfolio catering to both urban & rural section. We have valued M&M on the basis of SOTP methodology, using P/E for M&M (standalone) and Market cap (25% discount) to value other listed subsidiaries. We maintain our buy rating on the stock with SOTP based target price of Rs. 978.

Why buy analyst research?

  • Institutional quality research
  • Available for Immediate Download
  • Detailed company or industry insight
  • Print or save
  • 24 hour customer support
Return to previous page without adding this item to your cart.
Email Customer Support.

About Analyst Research

Analyst research reports are available for immediate download after purchase. You will have unlimited access to the report for 24 hours after purchase, to download, print or save it as many times as you wish. Analyst Research provided by Reuters does not constitute investment advice, and is not endorsed by Reuters Research. This information is protected by copyright and intellectual property laws. More information on Analyst Research.