Views on Mahindra & Mahindra 4QFY2014 results - Angel Broking

Views of Mr. Yaresh Kothari (Research Analyst – Auto & Auto Ancillary, Angel Broking) on Mahindra & Mahindra 4QFY2014 results:

"Mahindra & Mahindra's (MM) reported results for 4QFY2014 are not comparable (yoy as well as sequential) due to the merger of Mahindra Trucks and Buses Ltd's. truck business (MTBL) with the company. The full year impact of the results of the truck business of MTBL has been incorporated in the 4QFY2014 results of MM. For MM + MVML, the reported top-line and bottom-line stood at Rs. 10,214cr and Rs. 915cr respectively with EBITDA margins of 10.4%. It also includes tax benefits of Rs. 298cr arising from the carry forward unabsorbed past losses and deferred tax positions of the trucks business of MTBL.

Excluding the impact of MTBL merger, MM +MVML, top-line recorded a better-than-expected growth of 4.3% yoy to Rs. 10,413cr. EBITDA margins, however, registered a decline of 160bp qoq to 13.4%, which were lower than our expectations of 14%. The EBITDA margins were impacted primarily owing to adverse product-mix, with the share of higher margin tractor business in the total volumes at ~29% as against ~38% in 3QFY2014. The EBIT margins in the automotive and tractor business witnessed a decline of 60bp and 50bp qoq respectively to 11.3% and 17.1% respectively. Consequently, adjusted bottom-line stood at Rs. 923cr, a decline of ~8% qoq.

We retain our positive view on MM given its diversified business model which we believe enables the company to face the macroeconomic challenges better than its competitors. We maintain our Accumulate rating on the stock; however, our target price is currently under review."

Mahindra & Mahindra 4QFY2014 Result Review (CMP: Rs. 1,231/ TP: Under review/ Recommendation: Accumulate)

Shares of MAHINDRA & MAHINDRA LTD. was last trading in BSE at Rs.1229.65 as compared to the previous close of Rs. 1199.35. The total number of shares traded during the day was 100791 in over 7708 trades.

The stock hit an intraday high of Rs. 1236 and intraday low of 1196.2. The net turnover during the day was Rs. 122868346.

Source : Equity Bulls

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