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Apr-Jul 2013 Earnings Preview
Mahindra & Mahindra
Rating
Accumulate
Price (Rs) 948
Target Price (Rs) 1,098
M/Cap (Rs bn) 620.5
Shares o/s (m) 654.7
Key Figures (Rs m) ‐ Standalone
Y/e March FY13 FY14E FY15E
Net Sales 404,413 458,880 512,621
EBITDA 47,094 56,336 62,406
Margin (%) 11.6 12.3 12.2
PAT 32,623 38,717 42,873
EPS (Rs) 49.8 59.1 65.5
Growth (%) 17.7 18.7 10.7
RoE (%) 24.3 24.0 22.4
PE (x) 14.5 12.2 11.0
P / BV (x) 4.2 3.5 3.0
EV / E (x) 13.5 11.2 9.8
*Adj. for subs. Valuation at Rs204/share
Led by strong volume growth of 25.2% YoY in tractor volumes, we expect EBITDA
margins to improve by 60bps YoY. Tractor volumes accounted for 38.3% as against
32.7% of overall volumes in Q1FY13. At the same time, raw material cost during the
quarter was stable. Standalone margins to improve by 60bps. Including MVML, PAT
is to grow at 19.1% YoY to Rs9.3bn led by 70bps improvement in EBITDA margins.
Quarterly Table (Rs m) ‐ Standalone
Y/e March
Q1
FY14E
Q1
FY13
YoY gr.
(%)
Q4
FY13
12M
FY14E
12M
FY13
YoY gr.
(%)
Net Sales 105,232 93,674 12.3 104,866 458,880 404,413 13.5
EBITDA 13,074 11,094 17.8 12,701 56,336 47,094 19.6
Margin (%) 12.4 11.8 58 bps 12.1 12.3 11.6 63 bps
Reported PAT 8,421 7,256 16.1 8,890 38,717 33,523 15.5
PAT (Excl. Ex Items ) 8,421 7,256 16.1 7,990 38,717 32,623 18.7
Operating Metrics
Automotive Sales 120,385 122,571 (1.8) 146,562 607,077 551,471 10.1
Tractor sales 74,577 59,578 25.2 49,665 250,749 223,883 12.0
Total Vol. 194,962 182,149 7.0 196,227 857,826 775,354 10.6
Net Real. / Veh. 539,758 514,271 5.0 534,414 549,014 521,585 5.3
EBITDA / Veh. 67,058 60,908 10.1 64,725 67,402 60,739 11.0
Maruti Suzuki
Rating
BUY
Price (Rs) 1,551
Target Price (Rs) 1,721
M/Cap (Rs bn) 468.5
Shares o/s (m) 302.1
Key Figures (Rs m)‐ Consolidated
Y/e March FY13 FY14E FY15E
Net Sales 435,879 463,284 555,276
EBITDA 42,297 51,288 64,131
Margin (%) 9.7 11.1 11.5
PAT 23,921 28,449 37,114
EPS (Rs) 79.2 94.2 122.9
Growth (%) 39.9 18.9 30.5
RoE (%) 14.2 14.3 16.2
PE (x) 19.6 16.5 12.6
P / BV (x) 2.5 2.2 1.9
EV / E (x) 11.2 9.1 7.1
MSIL reported 10.0% YoY de-growth in the overall volumes on account of demand
pressure on both petrol as well as diesel cars. Diesel vehicles accounted for ~39% of
the domestic volumes. MSIL is likely to gain from Yen depreciation (~18%) on a YoY
and favorable product mix (‘Dzire’ accounted for 19% of volumes vs 16.4% YoY). On
account of merger of SPIL (YoY comparison not possible), PAT could grow by 70%.
Quarterly Table (Rs m)
Y/e March
Q1
FY14E
Q1
FY13
YoY gr.
(%)
Q4
FY13
12M
FY14E
12M
FY13
YoY gr.
(%)
Net Sales 103,267 107,782 (4.2) 133,040 463,284 435,879 6.3
EBITDA 11,721 7,863 49.1 19,996 51,288 42,297 21.3
Margin (%) 11.4 7.3 406 bps 15.0 11.1 9.7 137 bps
Reported PAT 7,198 4,238 69.9 12,396 28,449 23,921 18.9
PAT (Excl . Ex Items ) 7,198 4,238 69.9 12,396 28,449 23,921 18.9
Operating Metrics
Total Vol. (nos) 266,434 295,896 (10.0) 343,710 1,205,434 1,171,435 2.9
Net Real./Unt. (Rs) 387,589 364,255 6.4 387,071 377,941 367,909 2.7
RM Cost/Unit (Rs) 278,289 283,555 (1.9) 253,980 289,114 286,508 0.9
EBITDA/Unit (Rs) 43,993 26,573 65.6 58,177 36,358 30,369 19.7
Net Profit/Unit (Rs) 27,017 14,321 88.7 37,317 22,081 19,634 12.5
July 8, 2013 47