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M&M: Another tepid quarter - Views on News from Equitymaster
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M&M: Another tepid quarter
Nov 25, 2015

Mahindra & Mahindra (M&M) announced the second quarter results of financial year 2015-2016 (2QFY16). The company has reported a decline of 3% YoY in sales, while net profit growth has been flat (M&M and MVML combined). Here is our analysis of the results.

Performance summary

  • Revenues (M&M and MVML combined) decline by 3% YoY during 2QFY16 as revenues from both the automotive and farm equipment segments remain subdued.
  • Operating margins, however, expand by 1% to 13.2% in 2QFY16; thus the operating profits grow by 6% YoY.
  • Net profit growth is flat on account of higher tax expenses.

Financial performance: M&M and MVML** combined

(Rs m) 2QFY15 2QFY16 Change 1HFY15 1HFY16 Change
Sales 90,446 87,937 -2.8% 188,627 182,308 -3.4%
Expenditure 79,442 76,311 -3.9% 163,431 157,153 -3.8%
Operating profit (EBDITA) 11,005 11,626 5.6% 25,197 25,156 -0.2%
Operating profit margin (%) 12.2% 13.2%   13.4% 13.8%  
Other income 4,906 4,885 -0.4% 6,353 6,046 -4.8%
Depreciation 2,783 2,830 1.7% 5,585 5,471 -2.0%
Interest 727 577 -20.6% 1,543 1,138 -26.3%
Profit before tax 12,401 13,104 5.7% 24,421 24,592 0.7%
Tax 2,660 3,323 24.9% 5,717 6,501 13.7%
Profit after tax/(loss) 9,741 9,781 0.4% 18,705 18,092 -3.3%
Net profit margin (%) 10.8% 11.1%   9.9% 9.9%  
No. of shares (m)       589.3 589.9  
Diluted earnings per share (Rs)*         34.7  
P/E ratio (x)*         32.2  

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

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