CRISIL has reaffirmed its 'CRISIL AAA/Stable/CRISIL A1+' ratings on the bank loan facilities and debt instruments of Mahindra and Mahindra Limited (M&M).
The ratings continue to reflect M&M's leadership in the Indian tractor industry and healthy market position in light commercial vehicles (LCVs), with the benefit of diversification also supporting its business profile. 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) disrupted both the supply chain, and end-demand in the major segments M&M operates, in the initial few months of this fiscal. However, demand has picked up since easing of restrictions and the production is also back on track.
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.615.05 as compared to the previous close of Rs. 592.7. The total number of shares traded during the day was 215896 in over 5927 trades.
The stock hit an intraday high of Rs. 617.85 and intraday low of 593.3. The net turnover during the day was Rs. 131529901.