Mahindra & Mahindra (Q1 FY13)

India Infoline News Service | Mumbai |

We value M&M at Rs800/share (9-month target), which includes Rs592 for its automotive business (10x P/E for FY14E) and Rs208 for its subsidiaries

CMP Rs723, Target Rs800, Upside 10.7%

  • Revenues  increase 39% yoy driven by strong volume growth in automotive segment; Revenues ahead of our expectations on higher than estimated realizations
  • OPM at 11.8% was better than our estimates of 11%, OPM declined 147bps yoy but rose 152bps sequentially
  • Including MVML, OPM was lower by only 39bps yoy but increased 181bps qoq to 13.9%
  • Higher interest and depreciation resulted in a restricted PAT growth compared to rise in operating profit
  • While auto segment volume growth will continue to remain strong, poor monsoons entail a grim outlook for the tractors segment
  • We value M&M at Rs800/share (9-month target), which includes Rs592 for its automotive business (10x P/E for FY14E) and Rs208 for its subsidiaries 
Result table
(Rs m) Q1 FY13 Q1 FY12 % yoy Q4 FY12 % qoq
Net sales 93,674 67,271 39.2 93,872 (0.2)
Material costs (70,354) (48,336) 45.5 (70,894) (0.8)
Personnel costs (4,516) (4,017) 12.4 (4,294) 5.2
Other overheads (7,710) (5,964) 29.3 (8,990) (14.2)
Operating profit 11,094 8,954 23.9 9,694 14.4
OPM (%) 11.8 13.3 (147) bps 10.3 152 bps
Depreciation (1,548) (1,099) 40.9 (1,997) (22.5)
Interest (460) (262) 75.4 (709) (35.1)
Other income 599 550 8.7 956 (37.4)
Extra ordinary items - - - 1,083 -
PBT 9,684 8,143 18.9 9,026 7.3
Tax (2,428) (2,095) 15.9 (281) 764.0
Effective tax rate (%) 25.1 25.7
3.1
Adjusted PAT 7,256 6,049 20.0 8,745 (17.0)
Adj. PAT margin (%) 7.7 9.0 (125) bps 9.3 (157) bps
Ann. EPS (Rs) 49.3 41.2   19.6 59.5   (17.2)
Source: Company, India Infoline Research

Segmental performance
Revenue (Rs mn) Q1 FY13 Q1 FY12 % yoy Q4 FY12 % qoq
Automotive 62,787 38,559 62.8 66,137 (5.1)
Farm equipments 30,783 28,571 7.7 27,611 11.5
Others 170 205 (17.3) 196 (13.3)
Total 93,739 67,335 39.2 93,944 (0.2)






EBIT (Rs mn) Q1 FY13 Q1 FY12 % yoy Q4 FY12 % qoq
Automotive 5,528 4,139 33.5 5,759 (4.0)
Farm equipments 4,824 4,574 5.5 4,342 11.1
Others 40 21 91.3 31 26.8
Total 10,392 8,734 19.0 10,132 2.6






EBIT Margin (%) Q1 FY13 Q1 FY12 bps yoy Q4 FY12 Bps qoq
Automotive 8.8 10.7 (193) 8.7 10
Farm equipments 15.7 16.0 (34) 15.7 (5)
Others 23.5 10.1 1,333 16.1 742
Total 11.1 13.0 (189) 10.8 30
Source: Company, India Infoline Research

M&M Standalone + MVML quarterly performance
(Rs m) Q1 FY13 Q1 FY12 % yoy Q4 FY12 % qoq
Net sales 88,785 67,537 31.5 91,188 (2.6)
Material costs (63,493) (47,491) 33.7 (65,855) (3.6)
Personnel costs (4,810) (4,206) 14.4 (4,550) 5.7
Other overheads (8,132) (6,183) 31.5 (9,754) (16.6)
Operating profit 12,350 9,658 27.9 11,029 12.0
OPM (%) 13.9 14.3
BSE 1,412.55 [6.70] ([0.47]%)
NSE 1,412.50 [6.65] ([0.47]%)

***Note: This is a NSE Chart

 

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