The document provides details about a financial management project proposal submitted to Ms. Priya Malhotra. It includes an overview of Mahindra and Mahindra Ltd, the automobile industry, the impact of COVID-19, future prospects, Mahindra's product portfolio and new launches, financial performance analysis, and a comparison with other automakers. Mahindra reported a revenue decline in FY2020 due to lower sales, though the long term outlook remains positive if policies support consumption and electric vehicles. The analysis found the company maintaining stable equity levels but with lower profitability ratios.

1. FINANCIAL MANAGEMENT
PROJECT PROPOSAL
SUBMITTED TO: Ms. PRIYA MALHOTRA
PRESENTED BY:
Aakansha Jain (2K20/BMBA/01)
Sagar Dutt Phuloria (2K20/BMBA/04)

2. Details of the company
 Name – Mahindra and Mahindra Ltd.
Mahindra & Mahindra Limited is an Indian multinational automotive manufacturing corporation
headquartered in Mumbai, Maharashtra, India. It is a part of the Mahindra Group, an Indian
conglomerate. It was ranked 17th on a list of top companies in India by Fortune India 500 in 2018.
 Industry – Automobiles
 Established – 2nd October 1945
It was established in 1945 as Muhammad & Mahindra and later renamed as Mahindra and Mahindra.
 Subsidiaries - Tech Mahindra , Mahindra & Mahindra Financial Services Limited, Mahindra
Logistics Limited , Mahindra Holidays & Resorts India Limited , Mahindra CIE Automotive Limited ,
Mahindra Lifespace Developers Limited , Mahindra EPC

3. Automobile Industry Overview
 The automotive industry is an engine of economic growth. The mid to long-term outlook for the
Indian auto industry is positive. As per the Automotive Mission Plan 2026 (AMP 2026), the
Indian auto industry is expected to grow at a double digit CAGR between the period 2016-2026.
However, there is uncertainty in the short to mid-term due to the COVID-19 pandemic. Policies
announced by the Government to boost consumption as the country exits from the COVID-19
lockdown, will be beneficial. The Government has also formulated policies to boost the adoption
of electric and hybrid vehicles in India, in order to improve air quality and reduce the fuel
import bill.
 Strong Government focus on development of agriculture sector, increasing adoption of
mechanisation & modern agricultural practices and rural development at large, is expected to
drive sustainable growth in the farm sector. Important reforms in the farm sector announced by
the Government, which are focused on improving the state of agriculture in India in the mid to
long-term, will benefit the sector.

4. Impact on industry due to Covid-19 Pandemic
 The automobile industry was hit hard in FY 2019-20 as sales fell across vehicle segments.
According to data released by SIAM, the Indian automobile industry recorded a
20.3% decline in domestic sales in FY20 as compared to a 5.9% growth in FY19.
 The Passenger Vehicle segment declined 17.3% in FY20 (as compared to 2.8% growth
in FY19) due to weak consumer sentiment, the rising cost of vehicle ownership, and general
economic slowdown.
 The Commercial Vehicle industry in India registered a 30.0% decline in FY20
compared to 17.1% growth in FY19, as a result of subdued demand, and higher capacity
arising from the transition to BSVI.
 After an outstanding growth in FY19, Indian industry's domestic sale of motorcycles in
FY20 saw a decline of 17.5%. It was not just the relative lack of demand as the motorcycle
industry was subjected to several regulations which significantly increased the cost of
ownership.
 Industry-wide domestic sales of three-wheelers fell as well. After enjoying growth of
over 10% in FY19, it fell by 9.2% in FY20.

5. Future Prospects of the Industry
 With the rise in fuel price of diesel and increased focus of the government
towards increasing the CNG distribution infrastructure across the country,
the demand for CNG vehicles could see an upsurge in the near future.
 The electric vehicles/hybrid market is buzzing with a lot of activity especially
in the two-wheeler and three-wheeler segments with a host of new entrants
eyeing the market. The Indian automobile industry is expected to move
forward in this direction with increased local production especially in the
battery segment.

6. About Mahindra & Mahindra Ltd.

7. Product Basket offered
The company operates in nine segments : automative segment comprises of sales of automobiles,
spare parts and related services; farm equipment segment comprises of sales of tractors, spare
parts and related services; information technology(IT) services comprises of services rendered
for IT and telecom; financial services comprise of services relating to financing, leasing and hire
purchase of automobiles and tractors; steel trading and processing comprises of trading and
processing of steel; infrastructure comprise of operating of commercial complexs, project
management and development; hospitality segment comprises of sales of timeshare; Systech
segment comprises of automotive components and other related products and services, and its other
segment comprises of logistics, after-market, two wheelers and investment.

8. Products offered by company in Automotive sector
Some more category wise :-
SUV (Thar, XUV300, Alturas G4, Scorpio, Bolero),
Electric (E-Verito, Treo, E Alfa),
Pickup (Bolero Pik-up, Bolero Maxitruck Plus, Bolero Camper),
Truck (Blazo Tipper, Blazo Tractor Trailer, Furio, Jayo),
Buses (Cruzio), Two wheeler (Gusto 125, Centuro Rockstar)

9. New Products launched during Covid-19 Pandemic
 XUV500 – W3
 Thar 700
 XUV300 AMT
 Jeeto Plus
 New Bolero City Pik-Up
 New Bolero Camper Range
 SP PLUS Series
 XP PLUS Series
 Supro Minitruck VX

10. Selection Criterion of the company
 Minimum 5 years of existence in the industry – Founded in 1945
 Turnover of more than 500 CR per year- Rs. 95,179.09 in March 2020
Net Sales (in Cr.)
 Minimum 3 years of reported profits – Unless 2020, it had reported increasing profits
for last 10 years.
Profit after tax - (in Cr.)

11.  Share Capital of 500 CR and above- Rs. 554.28 CR in March 2020
 Listed on BSESensex / NIFTY50/ BankNIFTY/ S&P BSE Midcap/ S&P BSE
Largecap/ S&P BSE SmallCap- Listed on Nifty50

12. Business Analysis
 Analysis of current investment of the company and upcoming products and
investment of the company.
 Market share in the industry : 6.4%
The share of promoter in the company is low at 19.44%

13. Number of Years Dividend/Share (in Rs.)
1 Yr. 2.35
3 Yr. 6.12
5 Yr. 8.67
Mahindra & Mahindra pays a dividend of 2.35 Rs
per share. It tells us that a company dislikes to
share profits with its shareholders. The dividend
yield is low at 0.28 %.
Dividend Payout

14. M&M''s South Korean subsidiary files for bankruptcy
SsangYong Motor Company (SYMC), the South Korean subsidiary of Mahindra
and Mahindra (M&M), has filed for bankruptcy. The subsidiary informed the
Korean Stock Exchange regarding start of a rehabilitation procedure with the
Seoul Bankruptcy Court. The development comes a week after the struggling
automaker missed the repayment of Rs 480 crore to JP Morgan Chase Bank which
was due and payable on December 14.

15. Financial Analysis
 Analysis of Financial Statements of the Company (Vertical Analysis)
2019 2020 REASONS FOR INCREASE/DECREASE
Non Current Assets 65.71% 70.02% Increase in intangible assets under
development.
Current Assets 34.29% 29.98% Substantial Decrease in Investments and Trade
Receivables.
Equity 64.92% 68.25% Equity amount is almost same but there is a
decrease in total liabilities and equity in 2020.
Non Current Liabilities 7.88% 10.02% Substantial increase in Net Deferred Tax
Liability.
Current Liabilities 26.95% 21.73% Decrease in Total outstanding dues.

16.  Analysis of the current profitability of the company using profit-loss statements.
2019 2020 REASONS FOR
INCREASE/DECREASE
REVENUE Rs.55302.97 Rs.47155.59 Significant decrease in
revenue from operations.
EXPENSES 88.51% of Total
Income
89.12% of Total
Income
Not Much change seen.
PROFIT 8.67% of Total
Income
2.82% of Total
Income
Revenue decrease and
Expenditure Increase

17.  Financial ratios - Debt-Equity ratio (0.09 : a low value which is good), Interest Coverage ratio(15.90 :
quite healthy), Net Profit Margin Ratio(2.8), Current Ratio(1.08), Inventory Turnover Ratio (12.57 :
managing its inventory poorly), Return on Equity (3.9% : which is very poor)

19. Technological advancements done by the company
 To enable lifelike experience of products before they are manufactured or
prototyped and thereby save precious resources and time, Mahindra Research
Valley has set up a Virtual Reality Lab.
 On the customer side the business is using virtual reality to take the showroom
experience where showrooms do not exist and also enhance the experience
within showrooms. The business is trying to leverage blockchain and other
digital technologies to deliver products and services in a better manner.

20. Mahindra – Ford Joint Venture
 Announcement of Mahindra – Ford Joint Venture
Mahindra and Mahindra Ltd (M&M), on October 1, 2019, announced an agreement with Ford
Motor Company Inc., USA (FMC) for the formation of a joint venture (JV), which will acquire the
automotive (auto) business of Ford India Pvt Ltd (FIPL). M&M will acquire 51% in the JV (Ardour
Automotive Pvt Ltd), valuing it at an enterprise value of Rs 1,925 crore (including likely debt of Rs
636 crore). For acquiring 51% stake and for the future operations of the JV, M&M has committed to
fund an amount not exceeding Rs 1,400 crore.
 Benefit of this JV
CRISIL believes that the deal could be a medium-to-long-term positive for M&M. The JV would be
able to leverage FMC's global expertise in product development and enjoy higher economies of
scale, including benefits of joint sourcing. M&M would also be able to leverage FIPL's distribution
reach in emerging markets to sell its vehicles. Joint product development could also help reduce
capital expenditure.

21.  Decision taken to scrap this JV agreement
Mahindra & Mahindra (M&M) and US auto major Ford Motor Company have decided to scrap
their previously announced automotive joint venture and it will continue its independent
operations in India as it is. The two companies determined that they will not complete a
previously announced automotive joint venture between their respective companies.
 Why this decision has been taken
The decision follows the passing of the December 31, 2020 ''longstop'' or expiration date of a
definitive agreement the organisations entered into in October 2019. The outcome was driven
by fundamental changes in global economic and business conditions – caused, in part, by the
pandemic – over the past 15 months. Those changes influenced separate decisions by Ford and
Mahindra to reassess their respective capital allocation priorities.

22. Comparison with new and old Players
 Profit/loss statement comparisons.
 Investment trend comparisons.
 Old players – Maruti Suzuki(1981), Tata(1984)
Maruti Suzuki India Limited, formerly known as Maruti Udyog Limited, is an Indian automobile
manufacturer company, founded by Government of India in 1981, headquartered in New Delhi, India. It
is a subsidiary of the Japanese automotive manufacturer Suzuki Motor Corporation. As of July 2018, it
had a market share of 53% in the Indian passenger car market.
Product Basket offered : Hatchbacks(CelerioX, Celerio, Swift, Alto, WagonR), Vans(Eeco,Omni),
MUVs/SUVs(SPresso, Brezza, Ertiga, Scross), Sedan(Dzire,Ciaz)

23. Tata Motors Limited is an Indian multinational automotive manufacturing company headquartered
in Mumbai, Maharashtra, India. It is a part of Tata Group, an Indian conglomerate. Its products include
passenger cars, trucks, vans, coaches, buses, sports cars, construction equipment and military vehicles.
Product Basket offered : Cars(Tiago, Altroz, Tigor), SUVs(Safari, Harrier, Nexon)
 New Players – Renault(2011), Nissan(2005)
Nissan Motor India Pvt Ltd (NMIPL) is a wholly owned subsidiary of Nissan Motor Co. Ltd Japan. The
company was incorporated in 2005 and offers innovative and exciting products across hatchback, MUV,
SUV and sedan segments in India. Nissan in India has a portfolio of two brands, Nissan and Datsun.
Product Basket offered : Nissan Kicks, Nissan Magnite, Nissan GT-R, Datsun Go, Datsun Go+,
Datsun redi-Go
Renault India Private Limted is a wholly owned subsidiary of Renault S.A., France and currently
offers three models in the Indian market: the SUV Duster, the compact MPV Triber, and budget
car Kwid.
Product Basket offered : KWID, Duster, Triber, Kiger

24. 47,155.59
79,031.40
987,886.60
45,311.22
357660.598
55,302.97
88,581.30
1,157,424.70
71,757.42
456902.899
49,721.91
81,808.20
1,195,116.90
60,389.01
472386.113
45,398.96
70,334.90
1,172,004.10
45,297.40
483500.79
41,725.00
58,999.10
1,218,951.90
44,247.78
421576.161
0.00 200,000.00 400,000.00 600,000.00 800,000.00 1,000,000.00 1,200,000.00 1,400,000.00
Mahindra and Mahindra
Maruti
Nissan
Tata
Renault
TOTAL REVENUE (in Rs. Crore)
Mar-16 Mar-17 Mar-18 Mar-19 Mar-20
Mar-20 Mar-19 Mar-18 Mar-17 Mar-16
Mahindra and Mahindra 47,155.59 55,302.97 49,721.91 45,398.96 41,725.00
Maruti 79,031.40 88,581.30 81,808.20 70,334.90 58,999.10
Nissan 9,87,886.60 11,57,424.70 11,95,116.90 11,72,004.10 12,18,951.90
Tata 45,311.22 71,757.42 60,389.01 45,297.40 44,247.78
Renault 357660.598 456902.899 472386.113 483500.79 421576.161

25. Mar-20 Mar-19 Mar-18 Mar-17 Mar-16
Mahindra and Mahindra 1,330.55 4,796.04 4,356.01 3,643.39 3,204.57
Maruti 5,650.60 7,500.60 7,721.80 7,350.20 5,364.30
Nissan -67,121.60 31,913.80 74,689.20 66,349.90 52,384.10
Tata -7,289.63 2,020.60 -1,034.85 -2,429.60 -62.3
Renault -65881.816 -1160.007 27165.554 42879.124 28128.113

26. Mar-20 Mar-19 Mar-18 Mar-17 Mar-16
Mahindra and Mahindra 2.82% 8.67% 8.76% 8.03% 7.68%
Maruti 7.15% 8.47% 9.44% 10.45% 9.09%
Nissan -6.79% 2.76% 6.25% 5.66% 4.30%
Tata -16.09% 2.82% -1.71% -5.36% -0.14%
Renault -18.42% -0.25% 5.75% 8.87% 6.67%

27. Future Value Predictions
 Preparation of Forecasted Financial Statements by using
Regression Analysis and Trend Analysis.
 Calculation of forecasted value of the Company.

28. References
 https://www.mahindra.com/investors/performance
 https://www.moneycontrol.com/stocks/company_info/print_main.php
 https://in.investing.com/equities/nissan-motor-co.,-ltd.-balance-sheet
 https://www.moneycontrol.com/india/stockpricequote/miscellaneous/tata
motorsltd-dvr/TATAM57000
 Mahindra & Mahindra Share Price, Financials and Stock Analysis
(finology.in)
 https://www.bseindia.com/bseplus/AnnualReport/500520/5005200320.pd
f
 Credit bulletin (crisil.com)