We expect recovery from hereon as markets open up. The management is focusing to clear supply chain constraints and increase utilization level to meet up the demand. We reiterate our HOLD rating on the stock...

Mahindra & Mahindra's business is diversified across farm equipment, auto and automotive components, real estate, hospitality, information technology, defence and aerospace and financial services, Q1FY21 PAT slumps 94% to Rs 55 cr...

M&M; + MVML Profit for the quarter de-grew by 97% YoY to Rs 678 Mn during Q1FY21.Net sales stood at Rs. 55,894 mn (-56.4% YoY / -37.9% QoQ). Gross margins expanded by 31 bps to 35.2% driven by commodity cost benefits and cost rationalization measures by the company. EBITDA was at Rs. 5,732 mn (-68.0% YoY / -53.3% QoQ) with margin of 10.3% (-38bps YoY / 34bps QoQ). The total volumes (auto + tractors) de-grew by 58.5% YoY to 90,536 units led by subdued demand. The blended realisation has seen an...

Positive tractor outlook and focus on capital allocation to drive performance Mahindra & Mahindra (M&M;) posted 1QFY21 adjusted PAT of Rs389.6mn, down ~96% YoY and lower than our expectation of Rs1.1bn, mainly due to lower than expected other income. It reported an exceptional gain of Rs288mn for the quarter towards profit on the sale of certain non-current assets by Ssangyong (SYMC). Net revenue of Rs55.89bn fell by ~56.4% YoY and was 3% above our estimate. Average selling price (ASP) for the Automotive and Farm Equipment segments grew by 13.4% YoY and 0.3% YoY, respectively. Net sales for the two segments declined by 74.5% YoY and ~24% YoY, respectively. EBITDA margin stood at 10.3%, down 370bps YoY and 70bps below our estimate. This decline was largely due to negative operating leverage partially...

Domestic tractor industry is continuing to be at the forefront of post-Covid automotive recovery in India. Against overall auto industry's ~36% YoY fall in July retail volumes, tractor segment volumes rose 35%. M&M;, as market leader with dominant 41.2% domestic market share as of FY20, is also benefitting from present sector tailwinds. Rural income levels stay on a relatively firmer footing with cash flows healthy on the back of strong Rabi harvest, rise in crop MSPs, healthy water table levels. Moreover, amid ongoing normal monsoon progress (1% above LPA as of July 31), strong...

M&M;'s (MM) Q1FY21 revenues dropped 56% YoY to Rs 56bn, EBITDA declined 68% to Rs 5.7bn and PAT nosedived 96% to Rs 389mn.

Tractors market share declined 39.1% in 1QFY21 (v/s 41.2% in FY20) due to supply side Current demand is 50-60% of normal; however, a clearer picture would emerge over the next 3-4 months. However, MM's SUVs business is severely challenged, and we do not see any respite for the company in this category in The Tractors segment has been seeing volume recovery since Dec19, driven by improvement in farm-level indicators such as output prices, lower input prices, higher government spend in rural areas, and unusually strong water reservoir levels. We upgrade FY21/FY22E EPS by 9%/3% to reflect the volume upgrade in tractors and UVs, as well as the improving mix MM's recent outperformance, valuations are still at a substantial discount to its five-year average (which captures both pain points of deterioration in the UV market share and the subsidiaries' performance).

Besides listing out priority areas for the auto and FES businesses, it also explains future growth areas for farm mechanization and M&M; is focused on using the current crisis (in the form of substantial losses in global businesses) to reboot (streamline capital allocation policy and bring accountability), reinvent (realize the potential of few unlisted businesses) and reignite value creation for all its stakeholders. M&M; is continuing its focus on farm mechanization to address concerns of farm productivity and labor shortage. aims to provide an integrated agronomy advisory, mechanized services and high-tech digital solutions to small farmers to reduce their cost of cultivation, enhance productivity and improve farming outcomes. M&M; is also focusing on the shared logistics segment for both personal mobility as well as cargo logistics. It further expanded its presence in this segment by acquiring stake in (shared personal mobility).

M&M;'s (MM) FY20 annual report focuses on strengthening core business and Change in Estimates | Target | Reco tightening capital allocation based on renewed management focus on turning around its core/strategic subsidiaries. Losses at key auto/farm subsidiaries...

Q4FY20 consolidated revenue fell 25.7% to Rs. 20,182cr, while EBITDA margin shrank 270bps YoY to 12.0% on increased costs. Adj. PAT declined 37.9% YoY to Rs. 448cr. Company wrote down its investments in US-based electric 2-wheeler business GenZe and S. Korea based automaker SsangYong Motor Co. We expect recovery in upcoming quarters as markets open up. As a market leader in farm equipment business, M&M; should benefit from pickup in tractor sales in coming months. We maintain our HOLD rating...

Mahindra & Mahindra (M&M;) reported a healthy operational performance in Q4FY20. Standalone net sales at | 9,144 crore were down 35% YoY (automotive revenues down 46%, tractor revenues down 3%), with automotive segment ASPs at | 6.1 lakh/unit and tractors segment ASP at | 5.3 lakh/unit being positive surprises. Standalone EBITDA margins at 12.4% were down 100 bps QoQ, with 290 bps gross margin expansion being overshadowed by negative operating leverage. Consequent standalone loss at PAT level of | 2,500 crore tracked exceptional charge of | 2,800 crore for...

Positive tractor outlook & focus on capital allocation to drive performance Mahindra & Mahindra (M&M;) posted 4QFY20 adj PAT of Rs3.22bn, down 70.0% YoY and 28.2% below our estimate, mainly on account of higher depreciation and higher tax rate. It reported an exceptional loss of Rs35.78bn for the quarter towards provision for impairment of investments made in Ssangyong (SYMC) and GenZe. Net revenue of Rs90.05bn fell by ~35% YoY and was 2% above our estimate. Average selling price (ASP) for the Automotive segment grew by 1.8% YoY while Farm Equipment segment's ASP declined by 0.4% YoY. Net sales for the two segments declined by 46.1% YoY and 3.0% YoY, respectively. EBITDA margin stood at 13.6%, up 10bps YoY and 310bps above our estimate. This improvement was largely driven...

MM to quit GenZe E-2W business while indicating no further investment in SsangYong going forward. Infact it would look to exit the business. MM+MVML 4QFY20 performance were operationally better with EBITDA at Rs12.3b (PLe Rs9.5b) due to improved gross margins at 35.7% (PLe 33.8%)....

FY2224 capex could reduce to ~INR90b over three years v/s the earlier three Dr Shah (designated CEO) has laid out the path to create c) a differentiating core SUV positioning, and d) realizing the potential of nine has laid out a clear game plan on capital allocation for the past and future. Although it would tighten capital allocation norms, the company is not scaling back its growth ambition and would continue to invest in growth with a hurdle rate of The Tractors business is nearing normalcy with over 90% of dealers operational, 85% plant utilization, and good demand on the ground. However, MM's SUVs business is severely challenged, and we do not see any respite for MM in this category in the The Tractors segment has been seeing volume recovery since Dec19, driven by improvement in farm-level indicators such as output prices, lower input prices, higher government spend in rural areas, and unusually strong water reservoir levels.

Mahindra & Mahindra's (MM+MVML) Q4FY2020 operating results were ahead of our as well as street estimates as the company managed to maintain margins despite the steep fall in the topline. Better mix, soft commodity prices, and cost-control measures enabled the company to retain margins in a challenging demand environment. Going ahead, management expects quicker recovery in rural areas, driven by record rabi production, higher MSPs, outlook of a normal monsoon, and increased rural spending by the government. We expect M&M; to perform better than other automotive players, given it derives 35%...

2 June 2020 After a gap of almost 24 years, MM would see a leadership change with both Executive Chairman (Mr. Anand Mahindra) and MD & CEO (Dr. Pawan Goenka) retiring in 2021. Dr. Anish Shah would take over as MD & CEO from 2 in turn becoming the 5 MD of MM over the last 40 years. Dr. Shahs priorities seem clearly set out for the next few years, which includes (a) revisiting capital allocation in subsidiaries (over next 12 months), (b) funding of other group businesses, and (c) evaluating segregation of auto and FES business (over next 3-5 years). The initial signs on capital allocation are positive as is visible from the MM boards decision against investing a further USD406m in Ssangyong in Apr20; this, despite giving an approval earlier in Feb20. According to our estimates, rural markets should contribute ~62% to revenues, 81% to core PAT and ~70% to SOTP in FY22E. We have slotted MMs core business into three buckets viz.

Rural slate forms > 50% of HMCL volumes. The company is the undisputed leader in the domestic motorcycle segment (a predominantly rural product), commanding 52% market share in the space as of FY20. In a post-Covid-19 world, enhanced awareness around social distancing (pan India basis) and apprehension around usage of congested public transport (largely relevant to urban, metro areas) are seen acting as a tailwind for lower ticket priced means of private transport, including entry and mid-level motorcycles (75125 cc). Consequently, HMCL's leadership in 75-110 cc products (Splendor, HF Deluxe & Passion) and 110-125 cc products (Glamour, Splendor 125)...

Maintain NEUTRAL as (1) Competition remains intense, with several SUV models displayed at the auto expo (2) Post BSVI, price hikes on diesel SUVs will impact profitability in the near term (3) The expected revival in tractor demand will partially offset the above. We advise investors to turn constructive on the stock after further clarity emerges on BSVI/favorable market responses to new launches. M&M;+MVMLs PAT at Rs 9.8bn was below estimates due to higher depreciation/tax rates. Demand outlook remains mixed. While SUV sales are likely to be impacted due to BSVI related price hikes, tractor demand will hold up on the back of good monsoons. The subsidiaries remain an overhang on the financial performance. We reiterate NEUTRAL with a Dec-21 SOTP of Rs 570.

Wait for Ssangyong profit gets longer, tractor outlook is positive Mahindra & Mahindra (M&M;) posted 3QFY20 adj PAT of Rs9.81bn, down 33.6% YoY and was 8.7% below our estimate, mainly on account of lower other income and higher tax rate. It reported exceptional loss of Rs6.0bn during the quarter towards provision for impairment of investments made in Ssangyong (SYMC). Net revenue of Rs121.2bn, down 6.0% YoY, was in line with our estimate. Average selling price (ASP) for the Automotive segment grew by 1.5% YoY while Farm Equipment segment's ASP declined by 2% YoY. Net sales for the two segments declined by 6.2% and 7.7% YoY, respectively. EBITDA margin stood at 14.8%, up 160bps YoY and 90bps above our estimate. This improvement was largely driven by lower...

profit declined by 6% to Rs 3395.47 crore in Q3 FY20 from Q3 FY19. The combined operating margin (OPM) stood reported flat to 13.57% in Q3 FY20 as against 13.80% in Q3 FY19. The combined profit after tax declined by 85% to Rs 199.94 crore in Q3 FY20 from Q3 FY19. The vehicle sales fell 8% to 1.23 lakh units in Q3 FY20 from 1.33 lakh units in Q3 FY19. Tractor sales declined 6% to 81,435 units in Q3 FY20 compared with 87,036 units in Q3 FY19. Total...