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Equity Research on Mahindra & mahinra 205
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Equity Research on Mahindra & mahinra 205

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  • 1. CHETANA’S HAZARIMAL SOMANI COLLEGE OF COMM & ECO SMT. KUSUMTAI CHAUDHARI COLLEGE OF ARTS TOPIC: MAHINDRA & MAHINDRA LTD. Presented To: Prof. Madhavi Muleek Presented By : Manali Deshmukh
  • 2. AGENDA Company Overview • Shareholding Pattern • Financial Assessments Fundamental Analysis • Economic Analysis • Industry Analysis • Ratio Analysis Technical Analysis Conclusion 2
  • 3. • Company Name : Mahindra & Mahindra Ltd. • Sector: Automotive & Farm equipment • Established in : 1945 • India's premier utility vehicle (UV) and farm equipment company • Listed on: BSE/NSE • Chairman & M.D.: Anand G Mahindra • Products: Commercial Vehicle & Personal Vehicle Company Overview 3www.mahindra.com
  • 4. 4 Bolero SUV Reva Chairman W Navistrar Truck ALFA Products Crop Harvesting Yuvraj Rice Farming
  • 5. Shareholding Pattern 25% 37% 21% 17% Shareholding Pattern Promoter FII/NRI Banks/MFs/Fis Others 100% value 61,39,80,756 5Source: The Annual Report of Company
  • 6. 902.40 Symbol- MNM 52 week High-974.80 52 week low- 621.75 904.20 Symbol-M&M 52 Week High - 976.00 52 week low - 621.10 Market Share 6 Source: BSE & NSE Website
  • 7. 0% 20% 40% 60% 80% 100% 120% FY07 FY08 FY09 FY10 FY11 Farm Equipment Automotive REVENUE BREAKUP 7Source: The Annual Report of the Company
  • 8. Particulars Mar-12 Mar-11 Mar-10 Mar-09 Mar-08 NET SALES 59,418 36,864 29,227 24,705 22,379 %change 61.18% 26.12% 18.30% 10.39% (-) Total Expenditure 52068 30777 26066 23415 20952 % change 69.17% 18.07% 11.32% 11.75% EBITDA 7349 6087 3160 1290 1427 % change 20.73% 92.62% 144.96% -9.6% (-) Depreciation 1802 972 874 749 582 Revenue Statement Rs. In crores 8
  • 9. Particulars Mar-12 Mar-11 Mar-10 Mar-09 Mar-08 EBIT 5548 5115 2287 541 845 (-) Interest 1800 1135 1121 858 716 Other Income 787 655 3259 2565 2373 PBT 4184 4515 4033 2248 2502 Tax 1408 1317 1161 542 658 Net Profit (PAT) 3127 3079 2871 1706 1845 1.56% 7.24% 68.2% -7.53% 9
  • 10. FUNDAMENTAL ANALYSIS 10
  • 11. • GDP growth rate 4.5% as on 3QFY12 • IIP as on June 2012 8.2% • FII investment as on 2012 - 24304.7 • The Indian automotive industry has emerged as a 'sunrise sector' in the Indian economy • FDI investments in Automobile Sector for FY2012-13 4,089 crores • Contribution of automotive sector towards GDP is 5% is expected to grow double by 2016 Economic Analysis 11
  • 12. • Large Domestic Market • Sustainable Labor Cost advantage • Government Incentives for Manufacturing Cost • Strong Engineering skills in designing etc. Strength • Low Labor productivity • High interest costs & high overheads make the production uncompetitive • Various forms of taxes push up the cost of production • Low investment in Research & Development • Infrastructure Bottleneck Weaknesses Industry Analysis 12
  • 13. • Heavy thrust on mining and construction activity • Increase in the Income level • Cut in excise duty • Rising Rural demand Opportunities • Rising Input costs • Rising interest Rates • Cut throat competition Threats 13www.autoindia.com
  • 14. 2011 ET 500 Rank Name Last Price Market Cap. (Rs. cr.) P/E Ratio 21 Mahindra & Mahindra 904.20 54,702.62 17.76 19 Maruti Suzuki 1,425.00 41,169.68 23.40 7 Tata Motors 305.95 97,601.59 56.54 41 Hero Motocorp Lt 1713.20 34,210.46 15.94 Comparison with Rivals 14 Source: ICICI Direct
  • 15. 76% 16% 4% 4% Indian Automobile industry Market Share Two Wheelers Passenger Cars Commercial vehicle & Three wheeler Three Wheelers4% 15 Source: Automotive Industry Report
  • 16. • Agriculture forms 17% of India’s GDP • Exports, primarily of tractors, have been a key driver for growth in the sector • M&M have 55% of Market Share in Farm equipment 16 Farm Equipment Sector
  • 17. 17 226 263 318 302 304 400 480 535 F05 F06 F07 F08 F09 F10 F11 F12 Domestic Tractor Industry Growth Source: Mahindra F12 Financial Report
  • 18. Ratio Analysis Ratio Formula Actual Ratio Current Ratio Current Assets/ Current Liability 2.67% Quick Ratio Quick assets/Quick liability 1.37 Debt equity ratio Debt/equity 0.37 Interest coverage ratio EBIT+dep/interest 14.02times Operating profit margin ratio Operating profit/sales*100 7.00% 18
  • 19. Ratio Formula Actual Ratio Net profit margin ratio Net profit/sales*100 5.00% Debt Service Coverage Ratio EBDIT/Int.+Debt repayment 7.22 Return on capital employed EBITDA/capital employed 11.00% Earning per share PAT/No. of shares 51.74per share Price earning ratio MPS/EPS 17.76% 19
  • 20. TECHNICAL ANALYSIS 20
  • 21. 21
  • 22. • As per Fundamental & Technical Analysis would recommend to buy/ hold this stock • Target price- 1150 • With positive and supportive government policies expected to continue for the domestic farm equipment sector, Mahindra should benefit the most, being the largest tractor manufacturer in India. • Increase in demand for diesel-powered vehicles should benefit the company because diesel vehicles form 99% of Mahindra's overall PV portfolio. CONCLUSION 22
  • 23. 23 www.mahindra.com www.angelbroking.com www.motilaloswal.com www.moneycontrol.com www.icicidirect.com www.topstockresearch.com www.siam.com Karvybroking Autoindia Sources
  • 24. THANK YOU 24

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