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Mahindra & Mahindra Ltd: Robust Performance amid Uncertainties! - Views on News from Equitymaster

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  • Jul 4, 2017 - Mahindra & Mahindra Ltd: Robust Performance amid Uncertainties!

Mahindra & Mahindra Ltd: Robust Performance amid Uncertainties!

Jul 4, 2017

Mahindra & Mahindra has announced its financial results for the third quarter of the financial year 2016-17 (3QFY17). During the quarter, revenues grew by 4.3% YoY and adjusted net profits grew by 17.3%.

Performance summary
  • For 4QFY17, net sales grew by 4.3% YoY. The growth in the Farm segment (up 18% YoY) compensated for the mediocre auto performance (up 2% YoY).
  • Over all volumes for the quarter grew at 2.3% YoY and realizations were up by 1.9%.
  • Operating profits for the quarters declined by 4.4% YoY with margins contracting by 106.3bps to 11.7%. The rise in the raw material cost and higher employee cost (up 18.8% YoY) resulted in the lower margins.
  • Adjusted net profits were up by 17.3% YoY with margins expanding by 84.9 bps to 7.5%. Net profits for the quarter got boosted by increase in the other income.
  • For FY17, topline grew by 8.7% YoY and adjusted net profits grew by 17.3% YoY. The company has declared a Final dividend of Rs 13 per share.

    Financial performance: M&M and MVML** combined
    (Rs m) 4QFY16 4QFY17 Change FY16 FY17 Change
    No. of Vehicles sold 183,924 188,192 2.3% 708,269 769,645 8.7%
    Net sales 101746 106121 4.3% 388879 418954 7.7%
    Expenditure 88806 93754 5.6% 336416 362398 7.7%
    Operating profit (EBDITA) 12,940 12,368 -4.4% 52,463 56,556 7.8%
    EBDITA margin (%) 12.7% 11.7%   13.5% 13.5%  
    Other income 957 2940 207.2% 7845 12035 53.4%
    Depreciation 3581 3782 5.6% 12047 14721 22.2%
    Interest 717 673 -6.2% 2653 2285 -13.9%
    Profit before tax 9,599 10,853 13.1% 45,608 51,585 13.1%
    Exceptional item 60 937   60 2012  
    Tax 2744 3053 11.3% 12230 14708 20.3%
    Profit after tax / (loss) 6,915 8,737 26.3% 33,438 38,889 16.3%
    Adjusted Profit 6,872 8,063 17.3% 33,394 37,451 12.1%
    Net profit margin (%) 6.8% 7.6%   8.6% 8.9%  
    No. of shares (m)         621.1  
    Diluted earnings per share (Rs)*         57.7  
    Price to earnings ratio (x)*         23.57  

    (*Trailing twelve-month earnings)
    (**Mahindra Vehicle Manufacturers Ltd)

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  3. Equitymaster's Associate(s) has/have financial interest in Mahindra and Mahindra Ltd.
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