Mahindra & Mahindra Posts Flattish Numbers In Q4FY14

Mahindra & Mahindra (M&M) today announced its financial results for the quarter ended March 31, 2014. On standalone basis the total income of M&M for the quarter ended March 2014 was Rs 11000 crore as against Rs 10486.53 crore reporting a jump of 5% on yearly basis. The increase in revenue from the farm equipment segment (up by 11.7% on yearly basis) and automotive segment (up by 2.6% on YoY basis), helped the company to post such increase in revenue during the last quarter of FY14. 

The EBITDA of the company stood at Rs 906.57 crore, reporting a fall of 28.6% on yearly basis for the quarter ended March 2014. Whereas, the EBITDA margin during this quarter plunged by 386 basis points. This was due to increase in employees cost (up by 39%) and other expenses (up by 43%) on yearly basis during Q4FY14. 

The company has reported a net profit of Rs 896.88 crore during Q4FY14, reporting a jump of mere 0.86% on yearly basis. The net profit includes Rs 52.79 crore as exceptional gain during Q4FY14 and Rs 90.62 crore during Q4FY13. Excluding the exceptional gain, the net profit of the company stands at Rs 844.09 crore, reporting a jump of 5.7% on yearly basis for Q4FY14 as compared to the corresponding quarter of previous year.

Mahindra Vehicle Manufacturers (MVML), is 100% subsidiary of M&M. Hence, combined result will show the comprehensive view of the company's performance. After combining, the total revenue of the company stood at Rs 10214.44 crore, up by 2.3% on yearly basis for the quarter ended March 2014. On segment wise, other than farm equipment segment (up by 11.7% on yearly basis), all the other segments saw declining trend. The EBITDA during Q4FY14 stood at Rs 1060.42 crore, plunging by 26% as compared to the same quarter of previous year.

On margin front, the EBITDA margin during Q4FY14, plunged by 400 basis points standing to 10.38% on yearly basis for the quarter ended March 2014. This was due to increase in employees cost (up by 37% on YoY basis) and other expenses (up by 42% on yearly basis) during the quarter.

While on combined basis the net profit during this quarter rose by mere 0.5% on yearly basis standing to Rs 967.65 crore in Q4FY14. The net profit includes the exceptional gain and hence after excluding the exceptional gains the net profit stood at Rs 914.86 crore, reporting a jump almost 5% on yearly basis for the quarter ended March 2014.

On the financial performance, the company said, “The deceleration in the gross revenue in this quarter was due to the challenging times the Indian auto industry is currently passing through with volumes shrinking by 11.6% in Q4FY14. Despite this, the entity could deliver a healthy operating margin and growth in its profits in the quarter due to a strong sales performance by its farm equipment sector and a tight control on material costs and all other expenses.”

M&M declared total dividend of Rs 14 per share for the fiscal year 2014. On the valuation front, the stock is trading at a price to earnings of 19.4x. Today the scrip of the company on BSE opened at Rs 1182 and closed at Rs 1230.5 per share up by 4.43% as compared to the pevious close (Rs 1178.35).