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

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AGENDA

Company Overview• Shareholding Pattern• Financial Assessments

Fundamental Analysis• Economic Analysis• Industry Analysis• Ratio Analysis

Technical Analysis

Conclusion

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• 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

www.mahindra.com

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Bolero SUV Reva

Chairman W Navistrar Truck

ALFA

Products

Crop Harvesting

Yuvraj Rice Farming

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Shareholding Pattern

25%

37%

21%

18%

Shareholding Pattern

Promoter

FII/NRI

Banks/MFs/Fis

Others

100% value 61,39,80,756

Source: The Annual Report of Company

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902.40

Symbol- MNM52 week High-974.8052 week low- 621.75

904.20Symbol-M&M52 Week High - 976.0052 week low - 621.10

Market Share

Source: BSE & NSE Website

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FY07 FY08 FY09 FY10 FY110%

20%

40%

60%

80%

100%

120%

Farm EquipmentAutomotive

REVENUE BREAKUP

Source: The Annual Report of the Company

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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 StatementRs. In crores

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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%

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FUNDAMENTAL ANALYSIS

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• 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

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• 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

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•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

www.autoindia.com

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2011 ET 500Rank

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

Source: ICICI Direct

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76%

16%4% 4%

Indian Automobile industry Market Share

Two Wheelers Passenger CarsCommercial vehicle & Three wheeler Three Wheelers4%

Source: Automotive Industry Report

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• 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

Farm Equipment Sector

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F05 F06 F07 F08 F09 F10 F11 F12

226263

318 302 304

400

480

535

Domestic Tractor Industry Growth

32%

20%

11%

Source: Mahindra F12 Financial Report

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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%

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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%

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TECHNICAL ANALYSIS

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• 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

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www.mahindra.com

www.angelbroking.com

www.motilaloswal.com

www.moneycontrol.com

www.icicidirect.com

www.topstockresearch.com

www.siam.com

Karvybroking

Autoindia

Sources

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THANK YOU