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Mahindra & Mahindra (Q2 FY14)

Q2 FY14 was the second consecutive quarter wherein Passenger UV segment de-grew for M&M.

January 01, 1970 5:30 IST | India Infoline News Service
CMP Rs895, Target Rs1,041, Upside 16.3%
  • Revenues fall by 9% yoy on back of 15.9% yoy volume and 3.9% yoy realization decline in automotive segment, 18.9% growth in tractors volume restricted the fall to some extent, Net sales were in line with our expectations

  • Including MVML, OPM was higher by 65bps yoy driven by strength in EBIT margins in farm equipment segment which rose 220bps yoy; automotive segment EBIT margins (including MVML) were lower by 96bps yoy

  • PAT at Rs9.9bn was higher than our estimates on back of higher other income and lower than expected tax rate

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

  • Top pick in Auto sector, retain BUY with a 9-month TP of Rs1,041

Result table
(Rs m)
Q1 FY14
Q1 FY13
% yoy
Q4 FY13
% qoq
Net sales
89,296
98,130
(9.0)
100,225
(10.9)
Material costs
(63,825)
(73,543)
(13.2)
(73,113)
(12.7)
Personnel costs
(5,024)
(4,743)
5.9
(4,984)
0.8
Other overheads
(8,997)
(8,654)
4.0
(9,254)
(2.8)
Operating profit
11,449
11,189
2.3
12,874
(11.1)
OPM (%)
12.8
11.4
142 bps
12.8
-2 bps
Depreciation
(1,970)
(1,784)
10.4
(1,806)
9.1
Interest
(623)
(475)
31.2
(493)
26.2
Other income
3,606
3,229
11.7
1,642
119.6
PBT
12,463
12,160
2.5
12,217
2.0
Tax
(2,568)
(3,142)
(18.3)
(2,838)
(9.5)
Effective tax rate (%)
20.6
25.8

23.2

PAT
9,895
9,018
9.7
9,379
5.5
PAT margin (%)
11.1
9.2
189 bps
9.4
172 bps
Ann. EPS (Rs)
67.0
61.1
  9.7
63.6
  5.5

Segmental performance
Revenue (Rs mn)
Q2 FY14
Q2 FY13
% yoy
Q1 FY14

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