Mahindra & Mahindra (Q4 FY12)
India Infoline News Service | Mumbai |
Volume growth for auto business to outpace growth in the tractors business
CMP Rs657, Target Rs766, Upside 16.6%
Source: Company, India Infoline Research
Segmental performance
- Revenues increase 38% yoy driven by strong volume growth in both automotive segment, offset by decline in sales volumes for farm equipment segment
- OPM at 10.3% was lower than our estimates, OPM declined 253bps yoy and 188bps qoq driven by higher raw material costs
- Including MVML, OPM was lower by 191bps yoy and 166bps qoq at 12.1%
- Exceptional items and tax credit results in better than estimated PAT of Rs8.7bn
- Volume growth for auto business to outpace growth in the tractors business
- We value M&M at Rs766/share (9-month target), which includes Rs601 for its automotive business (11x P/E for FY14E) and Rs165 for its subsidiaries
Result table
| (Rs m) | Q4 FY12 | Q4 FY11 | % yoy | Q3 FY12 | % qoq |
| Net sales | 93,872 | 67,692 | 38.7 | 83,829 | 12.0 |
| Material costs | (70,894) | (47,883) | 48.1 | (62,354) | 13.7 |
| Personnel costs | (4,294) | (4,176) | 2.8 | (4,473) | (4.0) |
| Other overheads | (8,990) | (6,928) | 29.8 | (6,772) | 32.7 |
| Operating profit | 9,694 | 8,706 | 11.3 | 10,230 | (5.2) |
| OPM (%) | 10.3 | 12.9 | (253) bps | 12.2 | (188) bps |
| Depreciation | (1,997) | (1,171) | 70.6 | (1,408) | 41.8 |
| Interest | (709) | (171) | 314.9 | (348) | 103.9 |
| Other income | 956 | 716 | 33.5 | 667 | 43.4 |
| Extra ordinary items | 1,083 | - | - | - | - |
| PBT | 9,026 | 8,080 | 11.7 | 9,141 | (1.3) |
| Tax | (281) | (2,015) | (86.1) | (2,519) | (88.8) |
| Effective tax rate (%) | 3.1 | 24.9 | 27.6 | ||
| Adjusted PAT | 8,745 | 6,065 | 44.2 | 6,622 | 32.1 |
| Adj. PAT margin (%) | 9.3 | 9.0 | 36 bps | 7.9 | 142 bps |
| Ann. EPS (Rs) | 59.5 | 48.1 | 23.8 | 48.5 | 22.6 |
Segmental performance
| Revenue (Rs mn) | Q4 FY12 | Q4 FY11 | % yoy | Q3 FY12 | % qoq |
| Automotive | 66,137 | 39,567 | 67.2 | 51,152 | 29.3 |
| Farm equipments | 27,611 | 27,939 | (1.2) | 32,486 | (15.0) |
| Others | 196 | 288 | (32.2) | 248 | (21.3) |
| Total | 93,944 | 67,794 | 38.6 | 83,886 | 12.0 |
| EBIT (Rs mn) | Q4 FY12 | Q4 FY11 | % yoy | Q3 FY12 | % qoq |
| Automotive | 5,759 | 4,182 | 37.7 | 4,179 | 37.8 |
| Farm equipments | 4,342 | 4,756 | (8.7) | 5,084 | (14.6) |
| Others | 31 | 60 | (47.2) | 36 | (13.0) |
| Total | 10,132 | 8,997 | 12.6 | 9,299 | 9.0 |
| EBIT Margin (%) | Q4 FY12 | Q4 FY11 | bps yoy | Q3 FY12 | bps qoq |
| Automotive | 8.7 | 10.6 | (186) | 8.2 | 54 |
| Farm equipments | 15.7 | 17.0 | (130) | 15.7 | 7 |
| Others | 16.1 | 20.6 |
***Note: This is a
NSE Chart
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