The results for M&M include the combined results of Mahindra and Mahindra Limited (M&M) and Mahindra Vehicle Manufacturers Limited (MVML), which is a 100% subsidiary of M&M.
Revenues for the combined entity were up 26% yoy at Rs13,189cr. This was marginally better than the consensus estimate of Rs13,127cr. The company achieved an excellent control over operating and employee costs with the two declining yoy as proportion of sales. Raw material expenses grew at a slower pace (22% yoy) compared to sales. This helped EBITDA to grow 70% yoy to Rs1,995cr, while EBITDA margin expanded 397bps yoy to 15.1%. EBITDA surpassed street estimate of Rs1,975cr. Reported PAT for the combined entity was up 50% yoy to Rs1,155cr. This included an exceptional income of Rs48cr, which was profit on sale and reversal of impairment of certain long-term investments. Adjusted for the exceptional items, PAT was up 64% yoy at Rs1,107cr. PAT surpassed consensus estimate of Rs1,104cr.
The Board of Directors announced dividend of Rs7.50 per share.
The automotive segment reported revenue of Rs9,105cr, up 20% yoy. This was the highest ever quarterly segmental revenue for the automotive segment. Revenue growth was almost entirely led by volumes.
The farm equipment segment saw 42% yoy growth in revenues on the back of an extremely strong year for tractors. The management had earlier guided for 8-10% yoy growth for the tractor industry on the whole in FY19 against 20%+ growth in FY18. Forecast of a normal monsoon in the current year will keep tractor sales momentum buoyant in FY19.
The bigger worry for M&M is its sliding market share in SUVs due to competition from Maruti Suzuki, Jeep, Ford, Hyundai, etc. The company recently launched refreshed version of XUV500 and plans to launch three new models (U321, S210 and Rexton) to boost its SUV market share. It has also charted a plan for revamping its dealer partnerships.
Mahindra & Mahindra Ltd is currently trading at Rs865.25, up by 15.65 points or 1.84% from its previous closing of Rs849.60 on the BSE. The scrip opened at Rs851 and has touched a high and low of Rs868 and Rs851 respectively. So far 30,60,664 (NSE+BSE) shares were traded on the counter. The stock is currently trading below its 50 DMA.
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