Mahindra & Mahindra - Q1FY21 Result Update - ICICI Securities

Mahindra & Mahindra (M&M) reported a relatively healthy operational performance in Q1FY21. Standalone net sales fell 56.6% YoY. Automotive ASPs surprised positively, coming in at Rs. 6.9 lakh/unit while ASP for farm equipment segment (FES) i.e. tractor was at Rs. 5.1 lakh/unit. Standalone EBITDA in Q1FY21 was at Rs. 549 crore with corresponding EBITDA margins at 9.8% (down 261 bps QoQ), primarily tracking a rise in staff costs (percentage of sales basis). Automotive segment posted EBIT loss of Rs. 576 crore while EBIT margins in FES expanded strongly by 280 bps QoQ to 20.4%. Consequent standalone PAT for the quarter came in at Rs. 112 crore, crimped by lower other income and higher interest costs.

Valuation & Outlook

We expect sales, EBITDA to grow at 5%, 11.6% CAGR, respectively, in FY20-22E. We continue to like M&M for its strong rural presence and sharpened capital allocation focus, although pace of recovery on automotive side remains a monitorable. We maintain BUY rating on M&M, valuing it at Rs. 700/share on SOTP basis (7.5x FY22E EV/EBITDA for base business; 30% holdco discount to its investments).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_MahindraMahindra_Q1FY21.pdf

Shares of MAHINDRA & MAHINDRA LTD. was last trading in BSE at Rs.629.25 as compared to the previous close of Rs. 629.15. The total number of shares traded during the day was 150139 in over 4114 trades.

The stock hit an intraday high of Rs. 640.5 and intraday low of 622.5. The net turnover during the day was Rs. 94403495.

Source : Equity Bulls

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