Mahindra & Mahindra (Q1 FY14)

India Infoline News Service | Mumbai |

Q1 FY14 was the first quarter wherein Passenger UV segment de-grew for M&M. With Passenger UV + Verito category sales declining by 2% yoy, 4W pick-ups remained the only growing category (+9.2% yoy) in its automotive business.

CMP Rs871, Target Rs1,076, Upside 23.5%
 
  • Revenues increase 7% yoy on back of a robust performance in the Farm equipment segment; Standalone revenues were slightly below our expectations on back of lower than estimated realizations

  • Including MVML, OPM was higher by 53bps yoy driven by strength in EBIT margins in farm equipment segment which rose 100bps yoy; automotive segment EBIT margins were flat yoy

  • PAT at Rs9.4bn was higher than our estimates on back of receipt of dividend of Rs810mn from subsidiaries

  • Sustained tractor segment growth will remain key for FY14 earnings as UV segment slows down

  • Top pick in Auto sector, retain BUY with a revised 9-month TP of Rs1,076

Result table
(Rs m)
Q1 FY14
Q1 FY13
% yoy
Q4 FY13
% qoq
Net sales
100,225
93,674
7.0
104,865
(4.4)
Material costs
(73,113)
(70,354)
3.9
(78,465)
(6.8)
Personnel costs
(4,984)
(4,516)
10.4
(4,424)
12.6
Other overheads
(9,254)
(7,710)
20.0
(9,280)
(0.3)
Operating profit
12,874
11,094
16.0
12,697
1.4
OPM (%)
12.8
11.8
100 bps
12.1
74 bps
Depreciation
(1,806)
(1,548)
16.7
(1,986)
(9.0)
Interest
(493)
(460)
7.2
(511)
(3.5)
Other income
1,642
599
174.4
922
78.1
Extraordinary items
-
-

906
(100.0)
PBT
12,217
9,684
26.2
12,028
1.6
Tax
(2,838)
(2,428)
16.9
(3,136)
(9.5)
Effective tax rate (%)
23.2
25.1

26.1

PAT
9,379
7,256
29.3
8,892
5.5
PAT margin (%)
9.4
7.7
161 bps
8.5
88 bps
Ann. EPS (Rs)
63.6
49.3
29.0
60.3
5.5

Segmental performance
BSE 1,415.85 26.90 (1.94%)
NSE 1,416.35 28.20 (2.03%)

***Note: This is a NSE Chart

 

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