X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
M & M 2Q margins to decline - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Oct 24, 2000

    M & M 2Q margins to decline

    Mahindra & Mahindra Ltd (M & M), India's leading tractor manufacturer, will report its 2QFY01 results tomorrow. The company is expected to report a decline in profits and operating margins, as both its businesses, tractors and utility vehicles (UVs) have not performed well in the first half of the current financial year.

    M & M's UV volumes have declined by 18% YoY to 25,798 units for the 1HFY01. The main reasons for this performance has been the uniform sales tax at 12% and the drought like conditions that prevailed earlier in certain states. Its market share in the UV segment has fallen to 46.2% in the 1HFY01, as compared to 60.7% in 1HFY00. The reason for this fall in market share is declining UV volumes and spectacular performance of Toyota Qualis, which has eaten into the market share of other UV manufacturers.

    In the tractor industry, M & M has managed to increase its volumes in a declining market. Its volumes for the 1HFY01 went up by 9.5%YoY to 40,150, while all other players saw a decline in their volumes. Its market share too rose from 28.8% in the 1HFY00 to 35.7% in the 1HFY01. The main reason mentioned by the company for better performance is the strong efforts of the company's sales force, even in the drought like conditions.

    UVs volumes on a decline
      Volumes (nos.) % growth Market share
    Utility vehicles 25,798 -18.0% 46.2%
    Light commercial vehicles 3,377 6.5% 13.9%
    Tractors 40,150 9.5% 35.7%

    However as the overall tractor market has been lacklustre, the company's realisations in this segment have been under pressure. Besides the costs related to Euro compliance too are being absorbed by M & M, as they do not want to pass it on to consumers. This too will put a pressure on the company's operating margins.

    M & M's operating margins declined from 12% in the 1QFY00 to 8.3% in the 1QFY01, we do not expect any improvement on this front in the 2QFY01.

    On the current price of Rs 136 it is trading at 5.7x, FY00 EPS of Rs 23.8.

     

     

    Equitymaster requests your view! Post a comment on "M & M 2Q margins to decline". Click here!

      
     

    More Views on News

    Mahindra & Mahindra Ltd: Robust Performance amid Uncertainties! (Quarterly Results Update - Detailed)

    Jul 4, 2017

    The Growth in the Farm Segment offsets mediocre performance in the auto business.

    Mahindra & Mahindra Ltd: Tractor Demand offsets the Notebandi hit Auto Segment! (Quarterly Results Update - Detailed)

    Mar 20, 2017

    Mahindra & Mahindra has announced its financial results for the third quarter of the financial year 2016-17 (2QFY17).

    Mahindra & Mahindra Ltd: Tractors Demand Upbeat, Gaining Market Share in Auto (Quarterly Results Update - Detailed)

    Nov 22, 2016

    Mahindra & Mahindra has announced its financial results for the second quarter of the financial year 2016-17 (2QFY17). During the quarter, revenues grew by 15.6% YoY and adjusted net profits grew by 18.5%.

    Tata Motors Ltd: Another Disappointing Quarter, Management fails to Perform! (Quarterly Results Update - Detailed)

    Aug 14, 2017

    Tata Motors Ltd disappoints again for both India and JLR business. Management commentary indicates a slow year ahead.

    Maruti Suzuki Ltd: Bumpy First Quarter. GST dents Margins! (Quarterly Results Update - Detailed)

    Aug 2, 2017

    GST realted cost impacts Margins, Management expects good year ahead.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    M&M SHARE PRICE


    Aug 18, 2017 (Close)

    TRACK M&M

    M&M - TATA MOTORS COMPARISON

    Compare Company With Charts

    COMPARE M&M WITH

    MARKET STATS