Mahindra And Mahindra 4Q FY 2013

7/28/2019 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


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

[email protected]

Mahindra and Mahindra

Performance Highlights

4QFY2013 Result Update | Automobile

June 4, 2013



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


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





June 4, 2013 3

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)


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


Exhibit 5: Strong growth in net average realization


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)




June 4, 2013 4

Exhibit 6: Segmental performance


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


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


Exhibit 8: Adjusted net profit at ` 799cr


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

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(%)( ` cr) Net profit Net profit margin (RHS)




June 4, 2013 5

Exhibit 9: Quarterly financial performance (MM + MVML)


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





June 4, 2013 6

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


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




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


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


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

http://www.bseindia.com/stockreach/stockreach.htm?scripcd=532313

http://www.bseindia.com/stockreach/stockreach.htm?scripcd=532313




June 4, 2013 8

Exhibit 14: One-year forward P/E chart


Exhibit 15: Premium/Discount to Sensex P/E


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


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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(%) Absolute premium Five-yr average premium




June 4, 2013 9

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


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


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




June 4, 2013 10

Balance sheet statement (Standalone)


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




June 4, 2013 11

Cash flow statement (Standalone)


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




June 4, 2013 12

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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Documents

Mahindra And Mahindra 4Q FY 2013