CRISIL has assigned its 'CRISIL AAA/Stable' rating on the Rs.500 crore Non-Convertible Debenture (NCD) programme of Mahindra and Mahindra Ltd (M&M) while reaffirming its 'CRISIL AAA/Stable/CRISIL A1+' ratings on M&M's bank loan facilities and debt instruments.
The ratings continue to reflect M&M's leadership in the Indian tractor industry and healthy market position in light commercial vehicles (LCVs). The ratings also factor in a strong financial risk profile, supported by a robust balance sheet with low leverage and high financial flexibility. These strengths are partially offset by exposure to cyclicality inherent in the farm equipment (tractor) and automotive (auto) segments, exposure to risks pertaining to acquisitions and investments in subsidiaries/joint ventures (JVs), and decline in market share in the utility vehicle (UV) space over the last few years.
The outbreak of the Novel Coronavirus (Covid-19) is expected to affect each of the major segments over the near term both in terms of disruption of the supply chain, and/or end-demand. Nevertheless, M&M's strong capital structure and liquidity position, along with the benefit of diversification of its business profile supports its credit profile.
CRISIL has combined the business and financial risk profiles of M&M and its ventures in the UV, commercial vehicles (CV), and farm equipment segments, which are considered as its core businesses. The company also has investments in group entities in the agriculture, financial services, hospitality, aerospace, consulting services, defence, information technology, chemicals, energy, industrial equipment, logistics, real estate, retail, components, and steel industries. CRISIL believes these group entities will receive support from M&M, depending on their strategic importance to it, and the extent of its shareholding and investment in them.
CRISIL has made financial adjustments to factor in this support. For the financing business undertaken by Mahindra and Mahindra Financial Services Ltd (MMFSL; 'CRISIL AA+ / FAAA / Stable / CRISIL A1+'), CRISIL has made adjustments for its assets and liabilities as per its capital allocation approach.
Shares of MAHINDRA & MAHINDRA LTD. was last trading in BSE at Rs.436.4 as compared to the previous close of Rs. 440.05. The total number of shares traded during the day was 749993 in over 5474 trades.
The stock hit an intraday high of Rs. 449.5 and intraday low of 431.75. The net turnover during the day was Rs. 325761499.