Mahindra & Mahindra - Result Update - ICICI Securities

Mahindra & Mahindra (M&M) reported a healthy operational performance in Q4FY20. Standalone net sales at Rs. 9,144 crore were down 35% YoY (automotive revenues down 46%, tractor revenues down 3%), with automotive segment ASPs at Rs. 6.1 lakh/unit and tractors segment ASP at Rs. 5.3 lakh/unit being positive surprises. Standalone EBITDA margins at 12.4% were down 100 bps QoQ, with 290 bps gross margin expansion being overshadowed by negative operating leverage. Consequent standalone loss at PAT level of Rs. 2,500 crore tracked exceptional charge of Rs. 2,800 crore for impairment of investments due to Covid-19 and others.

Valuation & Outlook

We expect sales, adjusted PAT to grow at 4.3%, 50.1% CAGR, respectively, in FY20P-22E. M&M's sharpened focus on capital allocation provides us further confidence in our constructive stance on the company. We maintain BUY rating on M&M, valuing it at Rs. 600/share on SOTP basis (6.5x FY22E EV/EBITDA for base business; 30% holdco discount to its investments).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_MahindraMahindra_Q4FY20.pdf

Shares of MAHINDRA & MAHINDRA LTD. was last trading in BSE at Rs.508.35 as compared to the previous close of Rs. 508.7. The total number of shares traded during the day was 407930 in over 10528 trades.

The stock hit an intraday high of Rs. 520.7 and intraday low of 499. The net turnover during the day was Rs. 208973950.

Source : Equity Bulls

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