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M&M: A Pick-Up in Tractor Volumes - Views on News from Equitymaster
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M&M: A Pick-Up in Tractor Volumes
Jul 26, 2016

Mahindra & Mahindra (M&M) announced the fourth quarter results of financial year 2015-2016 (4QFY16). The company has reported a 13% YoY and 14% YoY growth in sales and net profits respectively (M&M and MVML combined). Here is our analysis of the results.

Performance summary
  • Revenues (M&M and MVML combined) grow by a decent 13% YoY during 4QFY16 led by the automotive business.
  • Operating margins expand by 1.3% to 12.5% in 4QFY16; thus the operating profits grow by 26% YoY.
  • Net profit growth is restricted to 14% YoY on account of higher tax expenses.

    Financial performance: M&M and MVML** combined
    (Rs m) 4QFY15 4QFY16 Change FY15 FY16 Change
    Sales 90,003 101,602 12.9% 369,677 388,566 5.1%
    Expenditure 79,963 88,908 11.2% 323,645 336,579 4.0%
    Operating profit (EBDITA) 10,039 12,694 26.4% 46,033 51,988 12.9%
    Operating profit margin (%) 11.2% 12.5% 12.5% 13.4%
    Other income 950 935 -1.6% 8,201 7,910 -3.6%
    Depreciation 2,757 3,685 33.7% 10,980 12,484 13.7%
    Interest 833 637 -23.5% 3,039 2,329 -23.4%
    Profit before tax 7,400 9,307 25.8% 40,215 45,084 12.1%
    Exceptional items 364 60 3,357 60
    Tax 1,903 2,686 41.1% 9,339 12,166 30.3%
    Profit after tax/(loss) 5,861 6,681 14.0% 34,233 32,978 -3.7%
    Net profit margin (%) 6.5% 6.6% 9.3% 8.5%
    No. of shares (m) 589.3 589.9
    Diluted earnings per share (Rs)* 55.8
    P/E ratio (x)* 26.1

    (*On a trailing 12-month basis)
    (**Mahindra Vehicle Manufacturers Ltd)

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  1. 'subject company' is a company on which a buy/sell/hold view or target price is given/changed in this Research Report.
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  3. Equitymaster's Associate has financial interest in Mahindra and Mahindra.
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