VN Corporate VN Research & Consulting VN Sourcing Practice IndiaNotes
 Like us on facebook  Follow us on twitter  Follow us on LinkedIn  IndiaNotes on Google Plus  IndiaNotes on Pinterest  IndiaNotes on Stumbleupon  Subscribe to our feeds

lanterns

Stocks  A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z
Search
Feedback
You are here : IndiaNotes >> Research & Analysis >> Companies >> Mahindra & Mahindra Ltd. >> Research

M&M: Strong volume growth, maintain buy

Motilal Oswal | 10 Aug, 2012  | Follow Author | Add to my Favourites 


M&M 1QFY13 results (incl MVML) were above estimates with EBITDA margins of 13.9% (v/s est 12.6%) and PAT up 26% at Rs7.78b (v/s est Rs6b), driven by higher realizations and lower other expenses. Results are not comparable on y-o-y basis due to merger of MADPL from 4QFY12.

Key Highlights:


- S/A net sales grew by 40% y-o-y to Rs92.5b (v/s est Rs84.6b), driven by volume growth of 14.4% y-o-y (-6.8% q-o-q) to 182,149 units (v/s est 180k). Realizations were up 7.4% q-o-q (22% y-o-y) at Rs507,173 (v/s est Rs468,645/unit) driven by a) product mix improvement (led by XUV5OO), b) price increase to offset cost pressures and c) benefit of weaker Rson exports.

- S/A EBITDA grew by 24% y-o-y (+14% q-o-q) to Rs11.1b (v/s est Rs9.1b), translating into EBITDA margins of 11.8% (v/s est 10.7%) driven by higher realizations and lower other expenses. Lower than expected interest cost, depreciation and tax further boosted S/A PAT at Rs7.3b (v/s est Rs5.4b).

- Incl MVML, EBITDA Margins declined by 30bps y-o-y (+180bps q-o-q) to 13.9% (v/s est 12.6%). PAT grew 26% y-o-y (-3% q-o-q) to Rs7.8b (v/s est Rs6b).

- The management has lowered its tractor industry guidance to upto 2% growth (v/s 5-6% earlier) for FY13. However, it maintained its guidance for UV volumes at 12-14%. Inventory, both in the tractor and UV business, remains at comfortable levels.

Valuation & view: EPS estimates are upgraded for FY13/FY14 for M&M+MVML by 9%/5% to Rs55.3/Rs61.2, and consolidated EPS by 8%/4% to Rs62/Rs81 respectively. The stock trades at 11.8x FY14 S/A EPS (incl MVML) and 8.8x FY14 consol. EPS. Maintain Buy with target price of Rs973 (FY14 SOTP).

  Read full report Click here to read the full report

logo
BSE
1,265.15 +4.45
(0.35%)
NSE
1,263.70 +3.05
(0.24%)
Read More
About Motilal Oswal

Motilal Oswal was founded in 1987 as a small sub-broking unit, with just two people running the show. Today it has a 2000 member team with a networth of Rs7 bn and market capitalization as of March 31, 2008 at Rs19 bn.

 

For more information please write in to editor@indianotes.com

Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor IndiaNotes.com accept any liability whatsoever arising from the use of any of the above contents.



Technical Calls

What are technical calls?

Other Articles


Have a question?

Lakshmi Ramachandran
Founder, Vipreet Safe Trading - Founder, Vipreet Safe Trading



[X] Amazon Deals