M&M: PAT Grows By 9%

Mahindra & Mahindra, the flagship company of Mahindra group and India's biggest utility vehicle maker by sales, announced its unaudited quarterly result for the quarter ended December 31, 2013.

Mahindra & Mahindra reported a 2.4% YoY decline in its consolidated topline to Rs 11172.48 crore for the quarter ended December 31, 2013. The reduction in the total revenue was due to challenging times in the Indian auto industry with volumes shrinking by 11.7 % in Q3FY14. The non farm sector (automotive segment and the other segment) has declined by more than 10 % YoY to Rs 6166.5 crore in the Q3FY14 compared to the same period of the previous year. While the farm equipment sector has increased by more than 20 % YoY to Rs 4098.67 crore compared to the same period of the last year. 

Due to a good monsoon season in this quarter, the domestic tractor segment has sold 76362 tractors registering a growth of more than 22 % in the Q3FY14 compared to the same period of last year. The market share stood at 41.9 % in the Q3FY14 as against 41.4 % in the same period last year. The domestic tractor industry has grown by 20.6 % YoY by selling 181566 tractors in the Q3FY14. The market share of the company has grown mainly due to higher sales as compared to the industry.

In the passenger utility segment, the company has sold 54164 vehicles with a market share of 38.2 % in the Q3FY14. While in the car segment the company sold 1967 Verito and Verito Vibe cars. The entity has exported 8492 vehicles in the Q3FY14.

The total expenditure of the company decreased by 1.50 % YoY to Rs 8932.61 crore for the quarter ended December 31, 2013. The total expenditure has reduced mainly due to reduction in material cost. The material cost, which accounts 79 % of the total expenditure, reduced by more than 4 % YoY to Rs 7068.29 crore compared to the same quarter of the previous year. The cost on employee has increased by more than 10 % YoY to Rs 587.67 crore in the Q3FY14 as compared to the same period of the previous year.

On the EBITDA front, the company has posted a growth of 11 % YoY to Rs 1532.53 crore in the Q3FY14 compared to the same period of the previous year. The EBITDA increased mainly due to reduction in material cost. The EBITDA margin stood at 13.71 % for the quarter ended December 31, 2013 as compared to 12.05 % for the quarter ended December 31, 2012. The EBIT margin of Automotive sector stood at 11.89 % in the Q3FY14 as compared to 11.15 % in the Q3FY13. While the Farm Equipment Segment shows EBIT margin at 17.60 % in the Q3FY14 as compared to 15.49 % in the Q3FY13. The margins in this quarter has improved mainly due to strong sales performance by the farm equipment sector and cost control measure.

The company has posted a consolidated net profit of Rs 1000.12 crore, registering a growth of more than 9 % for the quarter ended December 31, 2013 as compared to the same period of the previous year. The increase in other income also helped the PAT to rise. The  other income of the company stood at Rs 97.54 crore in domestic farm in the Q3FY14 registering a growth of more than 28 % YoY as compared to the same period of the previous year. The PAT margin in this quarter stood at 8.95 % YoY in the Q3FY14 as compared to 8 % in the Q3FY13.

M&M said that it maintains at present a cautious and watchful outlook on the economy.

On BSE today the stock opened at Rs 907.10 and closed at Rs 902.60. The stock is currently trading at a P/E of 14.2x.