Q3FY21 Result Update - Mahindra & Mahindra - ICICI Direct

Mahindra & Mahindra (M&M) reported a healthy operational performance in Q3FY21. Standalone net sales were at Rs. 14,216 crore (up 15.2% YoY) - with automotive and tractor ASPs at Rs. 6.92 lakh/unit (down 1.6% QoQ) and Rs. 5.19 lakh/unit (flat QoQ), respectively. Standalone EBITDA margins at 16% dipped 12 bps QoQ, as operating leverage benefits cancelled out 150 bps contraction in gross margins. Automotive EBIT margins rose ~210 bps QoQ to 6.3% while tractor margins were down ~100 bps QoQ to 23.4%. Standalone PAT for the quarter came in at Rs. 31 crore, impacted by a large impairment hit of Rs. 1,692 crore in relation to long term investments.

Valuation & Outlook

We expect sales, adjusted PAT to grow at 20%, 40% CAGR, respectively, in FY21E-23E. Volume visibility, sharper capital allocation focus (SsangYong Motor now classified as discontinued operation, not to be consolidated into financials) & EV proactiveness help us maintain BUY on M&M. We value it at Rs. 1,000/share on SOTP basis (8.5x FY23E EV/EBITDA for base business; 20% holding company discount to its investments; previous target: Rs. 870).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_MahindraMahindra_Q3FY21.pdf

Shares of MAHINDRA & MAHINDRA LTD. was last trading in BSE at Rs.928.2 as compared to the previous close of Rs. 865.6. The total number of shares traded during the day was 1648471 in over 29712 trades.

The stock hit an intraday high of Rs. 952.15 and intraday low of 888. The net turnover during the day was Rs. 1531088840.

Source : Equity Bulls

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