Mahindra and Mahindra Result Updated

8/3/2019 Mahindra and Mahindra Result Updated

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Please refer to important disclosures at the end of this report 1

Y/E March (` cr) 3QFY12 3QFY11 % chg (yoy) Angel est. % diffNet sales 8,387 6,121 37.0 8,041 4.3 Adj. EBITDA 994 924 7.6 962 3.3

Adj. EBITDA margin (%) 11.9 15.1 (324)bp 12.0 (11)bp

Adj. PAT 635 617 2.9 654 (2.9)Source: Company, Angel Research

Mahindra and Mahindra (MM) reported mixed results for 3QFY2012.

The company registered better-than-expected top-line growth, led by robust

volume growth. However, net profit was below our estimates on account of

margin contraction due to higher purchases from its manufacturing subsidiary,

Mahindra Vehicle Manufacturers Limited (MVML). We have lowered our earningsestimates for FY2012/13 by 6.8%/7% to factor in lower tractor volumes

(8% growth in FY2013E from 12% earlier) and higher purchases from MVML.Nevertheless, due to attractive valuations, we maintain our Buy view on the stock. Margin pressures persist, impact results: For 3QFY2012, MM reported robustrevenue growth of 37% yoy (13.9% qoq), driven by 47.4% and 23.2% yoy

revenue growth in the automotive and farm equipment segments (FES),

respectively. EBITDA margin at 11.9% (adjusted for reversal of forex loss) declined

by 324bp yoy, primarily due to increased purchases of finished products (up

265% yoy and 75% qoq) from MVML. Thus, adjusted net profit grew by modest

2.9% yoy (down 17.4% qoq) to `635cr. Additionally, a 37.8% yoy (12% qoq)

increase in depreciation expense impacted the bottom line. Quarterly results(considering MM and MVML) registered a healthy performance, with EBITDA

margin at 13.4% and adjusted net profit posting 11.6% yoy growth to `679cr.

Outlook and valuation: We expect MMs automotive segment to be the keyvolume driver (expected to register a 20.5% CAGR over FY2011-13E) going

ahead, backed by the strength of the passenger utility vehicle (UV) and

four-wheeler pick-up portfolio. For FES, we have revised our volume (10.7%

CAGR over FY2011-13E) estimates downwards, in-line with managements

guidance. We have also cut our earnings for FY2012E/13E to reflect margin

pressures on account of increasing contribution from MVML. Nevertheless, given

the attractive valuations, we maintain our Buy rating, valuing the stock on SOTP

basis. Our revised SOTP target price works out to `795, wherein its core business

fetches `609/share and value of its investments works out to `186/share.Key financialsY/E March (` cr) FY2010 FY2011 FY2012E FY2013ENet sales 18,363 23,044 30,397 35,422% chg 42.1 25.5 31.9 16.5

Adj. profit 2,029 2,537 2,745 3,117% chg 158.1 25.0 8.2 13.6

Adj. OPM (%) 14.8 13.0 11.9 11.8

EPS (`) 35.9 43.2 44.7 50.8P/E (x) 19.2 16.0 15.4 13.6

P/BV (x) 5.0 3.9 3.1 2.6

RoE (%) 31.0 28.0 22.8 20.9

RoCE (%) 23.2 21.6 20.8 20.1

EV/Sales (x) 1.7 1.3 1.0 0.9

EV/EBITDA (x) 13.0 11.0 9.1 7.9

Source: Company, Angel Research

BUYCMP `689

Target Price `795

Investment Period 12 Months

Stock Info

Sector

Bloomberg Code

Shareholding Pattern (%)

Promoters 25.3

MF / Banks / Indian Fls 30.6

FII / NRIs / OCBs 35.8

Indian Public / Others 8.3

Abs. (%) 3m 1yr 3yr

Sensex 0.3 (2.3) 89.5

MM (17.4) 3.1 402.0

5

17,622

MM@IN

Nifty

Reuters Code

5,335

MAHM.BO

Face Value (`)

BSE Sensex

Automobile

Avg. Daily Volume

Market Cap (` cr)

Beta

52 Week High / Low

42,331

1.0

875/585

218,106

Yaresh Kothari022-39357800 Ext: [email protected]

Mahindra and MahindraPerformance Highlights

3QFY2012 Result Update | Automobile

February 7, 2012


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Mahindra and Mahindra | 3QFY2012 Result Update

2February 7, 2011

Exhibit 1:Quarterly performance (Standalone)Y/E March (` cr) 3QFY12 3QFY11 yoy chg (%) 2QFY12 qoq chg (%) 9MFY12 9MFY11 yoy chg (%)Net Sales 8,387 6,121 37.0 7,361 13.9 22,481 16,716 34.5Consumption of RM 4,680 3,810 22.9 4,454 5.1 13,249 10,432 27.0(% of sales) 55.8 62.2 60.5 58.9 62.4

Staff costs 450 348 29.4 430 4.5 1,283 1,019 25.9

(% of sales) 5.4 5.7 5.8 5.7 6.1

Purchase of traded goods 1,555 426 265 887 75 3,161 1,043 203

(% of sales) 18.5 7.0 12.1 14.1 6.2

Other Expenses 708 614 15.3 683 3.6 1,990 1,626 22.4

(% of sales) 8.4 10.0 9.3 8.9 9.7

Total Expenditure 7,393 5,197 42.2 6,455 14.5 19,684 14,121 39.4Operating Profit 994 924 7.6 906 9.7 2,797 2,594 7.8OPM 11.9 15.1 12.3 12.4 15.5

Interest 6.8 (2.7) (350) 4.9 38 9.7 (34.5) (128)

Depreciation 141 102 37.8 126 12.0 376 297 26.8

Other Income 41 42 (2.6) 232 (82.4) 297 262 13.4

PBT (excl. Extr. Items) 887 866 2.4 1,007 (11.9) 2,708 2,594 4.4Extr. Income/(Expense) 27 117 (77.1) (32) (184.2) (5) 117 -

PBT (incl. Extr. Items) 914 984 (7.1) 975 (6.2) 2,703 2,712 (0.3)(% of sales) 10.9 16.1 13.2 12.0 16.2

Provision for Taxation 252 249 1.2 238 6.0 699 656 6.5

(% of PBT) 28 25 24 26 24

Reported PAT 662 735 (9.9) 737 (10.2) 2,004 2,056 (2.5)Adjusted PAT 635 617 2.9 769 (17.4) 2,009 1,938 3.7PATM 7.6 10.1 10.5 (27.5) 8.9 11.6

Equity capital (cr) 294.2 293.6 294.0 294.2 293.6

EPS (`) 10.8 10.5 2.7 13.1 (17.5) 34.1 33.0 3.5Source: Company, Angel Research

Exhibit 2:Quarterly volume performanceVolume (units) 3QFY12 3QFY11 yoy chg (%) 2QFY12 qoq chg (%) 9MFY12 9MFY11 yoy chg (%)Total volumes 190,743 153,833 24.0 178,848 6.7 531,714 423,713 25.5

Auto Sales - Domestic 117,402 90,205 30.2 114,215 2.8 327,897 255,967 28.1

Auto Sales - Exports 7,587 5,020 51.1 7,239 4.8 20,543 13,480 52.4

Total Auto Sales 124,989 95,225 31.3 121,454 2.9 348,440 269,447 29.3Tractor Sales - Domestic 62,009 55,488 11.8 54,266 14.3 173,519 145,493 19.3

Tractor Sales - Exports 3,745 3,120 20.0 3,128 19.7 9,755 8,773 11.2

Total Tractor Sales 65,754 58,608 12.2 57,394 14.6 183,274 154,266 18.8Source: Company, Angel Research


3/12


3February 7, 2011

Robust net sales growth of 37% yoy, driven by volume growth: MM reported robusttop-line growth of 37% yoy (13.9% qoq) to `8,387cr, driven by impressive volume

growth of 24% yoy (6.7% qoq) and strong net average realization growth of 10.6%

yoy (6.9% qoq). Volume performance was aided by sustained momentum in theautomotive segment, which registered growth of 31.3% yoy (2.9% qoq). In the

passenger UV segment, MM posted strong 22.9% yoy growth, retaining its

dominant position with a market share of 57.8% (54% in 2QFY2012). The farm

equipment segment, on the other hand, witnessed moderate growth of 12.2% yoy,

with domestic tractor volumes registering growth of 11.8% yoy. However, MM

managed to improve upon its domestic market share, which increased to 42.9%

(41.2% in 2QFY2012) at the end of 3QFY2012.

Exhibit 3:Strong volume momentum continues


Exhibit 4:Net average realization improves 10.6% yoy


Exhibit 5:Segmental performanceY/E March (` cr) 3QFY12 3QFY11 yoy chg (%) 2QFY12 qoq chg (%) 9MFY12 9MFY11 yoy chg (%)Total Net Sales 8,392 6,131 36.9 7,368 13.9 22,501 16,742 34.4 Auto segment 5,116 3,472 47.4 4,518 13.3 13,492 9,675 39.4

Farm segment 3,251 2,638 23.2 2,826 15.1 8,939 6,997 27.7

Other segments 25 21 18.6 25 1.0 70 69 0.7

Total PBIT 930 914 1.7 883 5.4 2,686 2,535 6.0 Auto segment 418 427 (2.0) 448 (6.7) 1,280 1,299 (1.4)

Farm segment 508 487 4.4 433 17.5 1,398 1,233 13.4Other segments 3.6 0.6 2.1 73.6 7.8 3.6 116.4

PBIT/ Sales (%) 11.1 14.9 12.0 11.9 15.1Auto segment 8.2 12.3 (412) 9.9 (175) 9.5 13.4 (394)

Farm segment 15.6 18.5 (283) 15.3 33 15.6 17.6 (197)

Other segments 14.5 2.9 8.5 11.1 5.2


57.5

47.4

24.520.8

32.5

22.2 22.6

29.924.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

0

50,000

100,000

150,000

200,000

250,000

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

(%)(units) Total volume yoy growth (RHS)

(0.7)

(1.0)

(2.7)

(1.6)

2.33.6

6.25.9

10.6

(4.0)

(2.0)

0.0

2.0

4.0

6.0

8.0

10.0

12.0

360,000

370,000

380,000

390,000

400,000

410,000

420,000

430,000

440,000

450,000

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

(%)(`) Net average realisation yoy growth (RH S)


4/12


4February 7, 2011

Margin pressures continue, down 324bp yoy to 11.9%: MMs EBITDA margincontracted by 324bp yoy (46bp qoq) to 11.9%, largely driven by increased

purchase of finished products (up 265% yoy and 75% qoq) from the

manufacturing subsidiary, MVML. As a result, total raw-material cost as apercentage of sales increased by 515bp yoy (178bp qoq) to 74.3%. However,

continued cost-rationalization measures resulted in a 160bp yoy (110bp qoq)

decline in other expenditure. EBIT margin of the automotive and farm equipment

segments declined by 412bp yoy (175bp qoq) and 283bp yoy (up 33bp qoq) to

8.2% and 15.6%, respectively.

Including MVMLs operations, operating margin was relatively stable and

expanded by 50bp qoq to 13.4%.

Exhibit 6:RM cost pressure continues to impact margin


Exhibit 7:Adjusted net profit up by 2.9% yoy


Reported net profit up by moderate 2.9% yoy: The companys net profit for thequarter registered moderate 2.9% yoy (down 17.4% qoq) growth to `635cr,

primarily due to contraction in operating margin. Further, higher depreciation

expense (up 37.8% yoy and 12% qoq) and increased tax rate (28% in 3QFY2012

vs. 25% in 3QFY2011) negatively affected the companys bottom-line growth.

14.9 15.9 15.0 16.5 15.1 12.7 13.3 12.3 11.9

67.3 67.9 70.1 68.7 69.771.7 72.4 73.1

74.9

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

(%) EBITDA margin Raw material cost/sales

9.410.8 10.9

14.0

10.18.9 9.0

10.0

7.6

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

0

100

200

300

400

500

600

700

800

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

(%)(`

cr) Net profit Net profit margin (RHS)


5/12


5February 7, 2011

Exhibit 8:Quarterly performance (MM + MVML)Y/E March (` cr) 3QFY12 3QFY11 yoy chg (%) 9MFY12 9MFY11 yoy chg (%)Net sales 8,216 6,134 33.9 22,277 16,735 33.1Total expenditure 7,113 5,165 37.7 19,228 14,063 36.7Material cost 5,903 4,170 41.6 15,809 11,342 39.4

% of net sales 71.8 68.0 387 71.0 67.8 319

Employee expense 475 362 31.4 1,350 1,053 28.2

% of net sales 5.8 5.9 (11) 6.1 6.3 (23)

Other expenses 735 634 15.9 2,068 1,668 24.0

% of net sales 8.9 10.3 (139) 9.3 10.0 (68)

Operating profit 1,103 969 13.8 3,049 2,672 14.1OPM (%) 13.4 15.8 (237) 13.7 16.0 (228)

Depreciation 164 119 38.5 443 340 30.3

EBIT 939 850 10.4 2,606 2,332 11.8

Interest 34 19 83.9 93 25 278.5

Other income 41 42 (1.7) 297 262 13.5

PBT 945 873 8.2 2,810 2,569 9.4Exceptional items 27 117 - 27 117 -

PBT 972 990 (1.9) 2,836 2,686 5.6Tax expense 266 264 0.5 724 672 7.8

Tax rate 27.4 26.7 25.8 25.0

PAT 706 726 (2.8) 2,113 2,015 4.9Adj. PAT 679 608 11.6 2,086 1,897 9.9



6/12


6February 7, 2011

Investment arguments

Strong growth in the auto segment to offset slowdown in the FES segment:Outlook for tractor sales appears to be challenging given that the industry has

witnessed just 3-3.5% growth in the past three months and management has

guided for moderate growth of 6-8% in FY2013E. However, MMs automotive

volume growth continues to surprise positively, with 29.3 yoy growth witnessed

in YTD FY2012. Further, strong response to the recently launched XUV500,

continued momentum in the pick-up segment and likely launch of the new

Xylo should sustain automotive sales going ahead and somewhat offset weak

tractor demand.

New ventures firming up well: MMs new ventures in the CV space are firmingup well. New product launches such as GIO andMaxximo have received good

response. Further, launch of new products in the M&HCV 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

companys overall volume growth, supported by its well-known brand equity

and extensive sales network.

Investments constitute 71% of the balance sheet: MM also has majority stakesin 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 companys valuation in the recent past and may

continue to do so in the long term as well.

Outlook and valuation

We expect MMs automotive segment to be the key volume driver (expected to

register a 20.5% CAGR over FY2011-13E) going ahead, backed by the strength of

the passenger UV and four-wheeler pick-up portfolio. For FES, we have revised our

volume (10.7% CAGR over FY2011-13E) estimates downwards, in-line with

managements guidance. We have also cut our earnings for FY2012/13

by 6.8%/7% to reflect margin pressures on account of increasing contribution

from MVML.

Nevertheless, given the attractive valuations, we maintain our Buy rating, valuingthe stock on SOTP basis. Our revised SOTP target price works out to `795,wherein its core business fetches `609/share and value of its investments works out

to `186/share.


7/12


7February 7, 2011

Exhibit 9:SOTP valuationKey Subsidiary No. of Shares(cr) CMP(`) Value(` cr)Mahindra Financial Services 5.4 690 3,727

Mahindra Lifespace Developers 1.5 310 477

Tech Mahindra 5.4 643 3,455

Mahindra Forgings 4.2 59 245

Mahindra Holidays and Resorts 7.0 300 2,100

Mahindra Ugine Steel 1.7 55 90

Other Investments (at book value) 5,479

Total value (` cr) 15,574Per share value of investments (30% discount) 186MM's Core Business/share value (12x FY13E EPS) 609MM's Target Price with investments (`) 795


Exhibit 10:Key assumptionsY/E March (units) FY08 FY09 FY10 FY11 FY12E FY13EPassenger Utility Vehicles (UV) 148,761 214,128 150,726 169,205 196,278 224,738

4-wheeler pick-up - - 76,387 105,588 152,047 179,415

LCV 10,398 9,792 9,829 11,077 12,739 14,267

Logan 25,891 5,332 5,332 10,009 18,016 20,719

Three wheelers 33,927 57,424 44,439 62,142 69,599 75,167

Exports 25,657 10,815 11,567 19,042 26,659 33,324

Total Automotive Sales 244,634 297,491 298,280 377,063 475,337 547,629Domestic Tractor Sales 90,037 165,581 165,633 201,785 229,026 247,348

Exports Tractor Sales 8,677 8,999 9,001 11,868 13,411 14,484

Total Tractor Sales 98,714 174,580 174,634 213,653 242,437 261,832Total Volume 343,348 472,071 472,914 590,716 717,774 809,461


Exhibit 11:Angel vs. consensus forecastAngel estimates Consensus Variation (%)

FY12E FY13E FY12E FY13E FY12E FY13ENet sales (` cr) 30,397 35,422 29,485 34,058 3.1 4.0EPS (`) 44.7 50.8 44.2 50.6 1.2 0.3

Source: Bloomberg, Angel Research


8/12


8February 7, 2011

Exhibit 12:One-year forward P/E chart

Source: Company, Bloomberg, Angel Research

Exhibit 13:Premium/Discount to Sensex P/E

Source: Company, Bloomberg, Angel Research

Exhibit 14:Automobile Recommendation summaryCompany Reco. CMP(`) Tgt. price(`) Upside(%)

P/E (x) EV/EBITDA (x) RoE (%) FY11-13E EPSFY12E FY13E FY12E FY13E FY12E FY13E CAGR (%)

Ashok Leyland Buy 26 3224.3 11.7 9.4 6.3 5.2 14.2 15.9 7.3

Bajaj Auto Accumulate 1,636 1,755 7.3 14.9 14.0 10.0 8.7 55.0 44.7 11.0

Hero MotoCorp Neutral 1,950 - - 16.6 14.4 9.6 8.0 66.2 55.0 21.0

Maruti Suzuki Neutral 1,245 - - 26.0 15.6 17.1 9.4 9.6 14.4 1.1

MM Buy 689 795 15.3 15.4 13.6 9.1 7.9 22.8 20.9 8.4Tata Motors Neutral 250 - - 8.8 8.6 5.7 5.4 39.8 31.1 1.0

TVS Motor Buy 50 66 32.8 9.3 8.3 4.8 3.9 23.2 22.0 17.6Source: Company, Bloomberg, Angel Research

0.0

5.0

10.0

15.0

20.0

25.0

30.0

Apr-

02

Dec-0

2

Aug-0

3

May-0

4

Jan-0

5

Oct-05

Jun-0

6

Fe

b-0

7

Nov-0

7

Ju

l-08

Apr-

09

Dec-0

9

Aug-1

0

May-1

1

Jan-1

2

(x) Absolute P/E Five-yr average P/E

(80.0)

(60.0)

(40.0)

(20.0)

0.0

20.0

40.0

60.0

Apr-

02

Nov-0

2

Jun-0

3

Jan-0

4

Sep-0

4

Apr-

05

Nov-0

5

Ju

l-06

Fe

b-0

7

Sep-0

7

May-0

8

Dec-0

8

Ju

l-09

Mar-

10

Oct-10

May-1

1

Jan-1

2

(%) Absolute premium Five-yr average P/E


9/12


9February 7, 2011

Profit & Loss Statement

Y/E March (` cr) FY08 FY09 FY10 FY11 FY12E FY13EGross sales 12,866 14,514 20,157 25,137 32,773 38,190Less: Excise duty 1,585 1,587 1,794 2,093 2,376 2,769Net Sales 11,282 12,927 18,363 23,044 30,397 35,422

Total operating income 11,282 12,927 18,363 23,044 30,397 35,422% chg 14.5 14.6 42.1 25.5 31.9 16.5

Total Expenditure 10,187 12,035 15,647 20,038 26,766 31,228Net Raw Materials 7,726 9,274 12,346 16,263 21,825 25,362

Other Mfg costs 300 311 379 444 594 726

Personnel 862 1,018 1,190 1,438 1,915 2,249

Other 1,300 1,431 1,732 1,892 2,432 2,890

EBITDA 1,094 892 2,716 3,006 3,631 4,194% chg 3.5 (18.5) 204.5 10.7 20.8 15.5

(% of Net Sales) 9.7 6.9 14.8 13.0 11.9 11.8

Depreciation & Amortization 239 292 371 414 521 611

EBIT 856 600 2,345 2,593 3,110 3,583% chg 0.9 (29.8) 290.6 10.5 20.0 15.2

(% of Net Sales) 7.6 4.6 12.8 11.3 10.2 10.1

Interest & other Charges 88 134 157 71 81 72

Other Income 639 601 658 998 666 730

(% of PBT) 51.1 61.0 23.6 29.4 18.0 17.2

Recurring PBT 1,407 1,067 2,847 3,520 3,695 4,241% chg (0.8) (24.1) 166.7 23.6 5.0 14.8

Extraordinary Expense/(Inc.) (156) (81) (59) (125) - -

PBT 1,251 986 2,788 3,394 3,695 4,241Tax 303 200 759 858 950 1,124

(% of PBT) 24.3 20.3 27.2 25.3 25.7 26.5

PAT (reported) 1,103 868 2,088 2,662 2,745 3,117ADJ. PAT 947 786 2,029 2,537 2,745 3,117% chg (2.8) (17.0) 158.1 25.0 8.2 13.6

(% of Net Sales) 8.4 6.1 11.0 11.0 9.0 8.8

Basic EPS (`) 23.1 15.9 36.9 45.3 44.7 50.8Fully Diluted EPS ( ) 19.8 14.4 35.9 43.2 44.7 50.8% chg (3.3) (27.2) 148.7 20.5 3.5 13.6


10/12


10February 7, 2011

Balance Sheet

Y/E March (` cr) FY08 FY09 FY10 FY11 FY12E FY13ESOURCES OF FUNDSEquity Share Capital 239 273 283 294 307 307Reserves & Surplus 4,111 4,989 7,544 10,020 13,476 15,690

Shareholders Funds 4,350 5,262 7,827 10,313 13,783 15,997Total Loans 2,587 4,053 2,880 2,405 2,705 2,405

Deferred Tax Liability 57 (18) 240 354 354 354

Total Liabilities 6,994 9,297 10,947 13,073 16,842 18,757APPLICATION OF FUNDSGross Block 3,656 4,894 5,276 6,228 7,895 9,396

Less: Acc. Depreciation 1,842 2,326 2,538 2,842 3,363 3,974

Net Block 1,814 2,568 2,739 3,386 4,533 5,422Capital Work-in-Progress 546 647 964 986 1,026 1,127

Goodwill - - - - - -

Investments 4,215 5,786 6,398 9,325 11,790 12,755Current Assets 3,644 5,081 6,047 6,143 7,953 8,815

Cash 861 1,574 1,743 615 919 984

Loans & Advances 694 1,402 1,856 2,480 3,040 3,542

Other 2,089 2,104 2,447 3,049 3,995 4,288

Current liabilities 3,240 4,798 5,200 6,768 8,460 9,362

Net Current Assets 404 283 847 (624) (506) (547)Mis. Exp. not written off 14 13 - - - -

Total Assets 6,994 9,297 10,947 13,073 16,842 18,757

Cash Flow Statement

Y/E March (` cr) FY08 FY09 FY10 FY11 FY12E FY13EProfit before tax 1,251 986 2,788 3,394 3,695 4,241

Depreciation 239 292 371 414 521 611

Change in Working Capital 213 834 (394) 342 195 102

Less: Others 65 320 990 685 - -

Other income (639) (601) (658) (998) (666) (730)

Direct taxes paid (303) (200) (759) (858) (950) (1,124)

Cash Flow from Operations 826 1,631 2,337 2,980 2,796 3,099(Inc.)/Dec. in Fixed Assets (692) (1,338) (700) (973) (1,708) (1,601)

(Inc.)/Dec. in Investments (1,978) (1,571) (612) (2,927) (2,464) (965)

Other income 639 601 658 998 666 730

Cash Flow from Investing (2,031) (2,308) (653) (2,903) (3,507) (1,836)Issue of Equity 28 1 719 1,006 1,613 -

Inc./(Dec.) in loans 951 1,466 (1,173) (475) 300 (300)

Dividend Paid (Incl. Tax) 325 321 312 624 898 898

Others (157) 449 19 291 - -

Cash Flow from Financing 811 697 (784) (383) 1,015 (1,198)Inc./(Dec.) in Cash (394) 19 899 (306) 304 66Opening Cash balances 1,363 861 1,574 1,743 615 919Closing Cash balances 861 1,574 1,743 615 919 984


11/12


11February 7, 2011

Key Ratios

Y/E March FY08 FY09 FY10 FY11 FY12E FY13EValuation Ratio (x)P/E (on FDEPS) 34.8 47.8 19.2 16.0 15.4 13.6P/CEPS 24.6 32.4 16.3 13.7 13.0 11.4

P/BV 7.6 7.2 5.0 3.9 3.1 2.6

Dividend yield (%) 0.9 0.7 1.4 1.7 1.8 1.8

EV/Sales 3.0 2.6 1.7 1.3 1.0 0.9

EV/EBITDA 34.7 41.7 13.0 11.0 9.1 7.9

EV / Total Assets 5.4 4.0 3.2 2.5 1.9 1.7

Per Share Data (`)EPS (Basic) 23.1 15.9 36.9 45.3 44.7 50.8

EPS (fully diluted) 19.8 14.4 35.9 43.2 44.7 50.8

Cash EPS 28.1 21.3 42.4 50.2 53.2 60.7

DPS 5.9 5.1 9.7 12.0 12.5 12.5

Book Value 90.7 96.3 138.1 175.4 224.3 260.4

Dupont AnalysisEBIT margin 7.6 4.6 12.8 11.3 10.2 10.1

Tax retention ratio 0.8 0.8 0.7 0.7 0.7 0.7

Asset turnover (x) 2.3 1.9 2.2 2.1 2.1 2.1

ROIC (Post-tax) 13.0 6.9 20.2 17.9 16.3 15.6

Cost of Debt (Post Tax) 3.1 3.2 3.3 2.0 2.4 2.1

Leverage (x) 0.0 0.0 0.0 0.0 0.0 0.0

Operating ROE 13.0 6.9 20.2 17.9 16.3 15.6

Returns (%)ROCE (Pre-tax) 14.0 7.4 23.2 21.6 20.8 20.1

Angel ROIC (Pre-tax) 11.0 6.3 18.7 15.8 14.5 14.8

ROE 24.0 16.4 31.0 28.0 22.8 20.9

Turnover ratios (x) Asset Turnover 3.3 3.0 3.6 4.0 4.3 4.1

Inventory / Sales (days) 32 30 22 23 23 23

Receivables (days) 28 29 23 21 21 20

Payables (days) 69 82 69 65 67 74

WC (ex-cash) (days) (11) (25) (22) (17) (16) (15)

Solvency ratios (x)Net debt to equity (0.6) (0.6) (0.7) (0.7) (0.7) (0.7)

Net debt to EBITDA (2.3) (3.7) (1.9) (2.5) (2.8) (2.7)

Interest Coverage 9.8 4.5 15.0 36.6 38.3 49.7


12/12


12February 7 2011

Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com

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Disclosure of Interest Statement Mahindra and Mahindra

1. Analyst ownership of the stock No

2. Angel and its Group companies ownership of the stock No

3. Angel and its Group companies' Directors ownership of the stock No

4. Broking relationship with company covered No

Ratings (Returns): Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)Reduce (-5% to 15%) Sell (< -15%)

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Mahindra and Mahindra Result Updated