Analyst Research Report Snapshot

Title:

Mahindra & Mahindra Ltd. (MM) - Qtr. Updte - Dtd. - February 08, 2013

Price:

$46.00

Provider:

Axis Capital Limited

Date:

11 Feb 2013

Pages:

5

Type:

AcrobatPDF

Companies referenced:

MAHM.NS

Available for Immediate Download
Summary:

M&M delivered an in line Q3 with revenue (M&M+MVML) at Rs 10.2 bn. EBIDTA at Rs 18.8 bn was 2% below estimate due to higher raw material costs. Higher other income and lower tax rates resulted in PAT beat of 4% at Rs 9.1 bn. Lower tax rate in Q3FY13 was due to higher contribution of tax free plants at Haridwar/ Rudrapur and higher R&D spend. FY13 effective tax rate will be around 24%. Management expects a good rabi crop season to revive tractor demand from April ‘13. There are no major discounts being offered by the company across business verticals. UV portfolio will see ~4 refreshes in FY14 and launches of new products w commence from FY15. Upgrade to BUY (due to price correction) with SOTP- based TP of 979. Our TP implies an upside of 11% from CMP of Rs 883. Tractor segment highlights  M&M has lost some market share due to sharp 20% drop in volumes in its key markets (Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra and Gujarat). This was due to low winter monsoon in the southern states  Company will launch a new tractor with significant improvement in value proposition in FY14  Inventory is < 8 weeks (< 3 weeks at company level and < 5 weeks at dealer level) Auto segment highlights  Apart from refreshes in UV portfolio, Reva NXR and sub 4 meter Verito are planned in FY14  XUV 500 capacity is ~4,500 units per month. Further increase in capacity will done only after demand assessment Regards, Chirag Shah (Sr VP – Automobiles) Institutional Equity Research ENAM Securities Pvt Ltd. Tel: 9122 4325 1148 Ronak Sarda (Asst VP – Automobiles) Institutional Equity Research ENAM Securities Pvt Ltd. Tel: 9122 4325 1137

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