Mahindra and Mahindra 18052024 LKP
Mahindra and Mahindra 18052024 LKP
Mahindra and Mahindra 18052024 LKP
M&M reported decent Q4 FY24 numbers wherein the topline was reported at ₹254 bn, a
Rating BUY
growth of 12.7% yoy and flattish qoq. Volumes rose by 9.3% yoy and realizations went up by
about 3.1% yoy. Automotive division revenues came in at ₹199 bn, an increase of 20% yoy Current Market Price (₹) 2,372
led by success of Thar, Bolero, XUV & Scorpio families with ~220K order book. Automotive 12M Price Target (₹) 2,740
segment reported strong EBIT margins, which rose by 170 bps yoy and 50 bps qoq to 8.8% Potential upside (%) 16
on positive operating leverage, stable commodity basket and model mix. Tractor margins
came at 15.8% which was 30 bps up qoq and lower 60 bps yoy as lower monsoons and
unseasonal rains led to fall in volumes but margins improved qoq on lower RM basket costs. Stock Data
Overall EBITDA margins therefore came in higher at 14% (flattish qoq and 160 bps up yoy).
Sector : Autos & FES
Lower other income coupled with higher tax rate, led PAT to come in 4.3% up yoy at ₹21.6
Face Value (₹) : 5
bn. On a sequential basis, the growth was 12% lower. Overall results were quite decent
Total Market Cap (₹ bn) : 3,131
despite tractor business being on weak wicket.
Free Float Market Cap (₹ bn) : 2,411
SUV demand remains strong on robust demand for XUV 3XO 52-Week High / Low (₹) : 2558 / 1237
M&M witnessed 28% growth in the SUV segment volumes during the year. The company
BSE Code / NSE Symbol : 500520 / M&M
has received an excellent response for the new XUV 3XO with 50K bookings on the opening
Bloomberg : MM IN
day. Scorpio N (incl. Classic) with 86K open bookings since its launch (~17 k per month)
is another recent big success. The Thar and high cost XUV 7oo are still having huge order
book of ~7K and ~8K each per month respectively, as their waiting periods are reducing Shareholding Pattern
now. Neo Bolero was launched in July 2021 which still has received strong order bookings (%) Mar-24 Dec-23 Sep-23 Jun-23
(~9.5K monthly bookings for the entire Bolero family). With the smooth phasing out of XUV Promoter 18.59 19.32 19.34 19.37
3oo, the company has managed to bring in XUV 3XO at attractive price point. With this, the FPIs 41.75 40.87 40.26 40.14
company was able to increase its SUV revenue market share at 20.4%, 130 bps up yoy and MFs 12.72 13.06 13.73 13.94
40 bps up qoq. Competition is intensifying in the hot SUV segment with MSIL launching an Insurance 10.88 10.51 10.53 10.72
array of launches, thus M&M conceding its #1 position to MSIL. M&M might turn once again
Others 16.06 16.24 16.14 15.83
market leader as the company plans to launch its EV and ICE variants (recent XUV 3XO and Source: BSE
5 door Thar) in CY24. From existing ICE capacity of 39K p.m by FY23 end, the company has
ramped it upto 49K p.m by FY 24 end, which will be scaled up further to 64K and 72K by the
Price Performance
end of FY25 and FY26 respectively. SUV as an industry is attracting bulk of the PV demand
(%) 1M 3M 6M 12M
now (>50%) and since M&M is driving substantial part of it, we expect this segment to
register 19%/15% growth in FY24E/FY25E/FY26E respectively. M&M plans to launch 9 ICE M&M 16.8% 29.2% 51.1% 87.8%
Out of the planned portfolio, there will be a strong presence of EV products (7 new products
starting from CY 24 till 2030). M&M has planned to increase its capex up to ₹270 bn (o/w ₹140
bn will be for ICE SUVs, ₹120 bn for EVs and ₹10 bn for other subsidiaries) in the period between
FY 25-27. M&M is looking for building partnerships with various EV players (Volkswagon)
globally and build products such as XUV 7oo EV and XUV 62o EV.
Also on the CV side, the company has launched the Bolero Max Pick-up 2T soon and has plans
to launch several CVs and pick-ups over the next 5 years with a capacity expansion plan for each
of the existing model in place. In the LCV business, M&M has gained about 350 bps yoy market
share to reach market share of 49% in the <3T market. The recent launch of Supro Profit Truck
has strengthened offering in 0-2T 4W segment. M&M launched Jeeto CNG and Maxx Pick up in
the LCV segment resulting in strong market share growth. We expect 7%/8% volume growth in
CVs in FY25E/26E.
M&M has garnered 58.7% market share in the e-3W space with the success of E-Alfa, Jeeto,
Treo Auto (recently launched Metal body) and Treo Zor launched few quarters ago. A variant of
Treo-Zor, named as Zor Grand was launched in Q2, which is also gaining momentum. M&M sold
66K units of E-3Ws in FY 24 as compared to 43.6K units in FY 23. Despite increasing competition,
we expect 23%/15% (on a high base) growth in 3Ws in FY25E/26E respectively.
Tractor segment may see revival with above normal expected monsoons in CY24
M&M witnessed about 29% qoq and a 20% yoy de-growth in tractor volumes in Q4 FY24, while
in FY 24, they declined by 6%. M&M lost market share by 130 bps yoy in Q4 at 39.4% while in
FY24 the company gained 40 bps at 41.6%. The fall in FES volumes has been led by El Nino and
its impact on the southern states and Maharashtra, leading to a deficit of 94.4% in CY 2023,
GoI’s reduced spending on Agricultural and Rural development, slow Rabi sowing are also some
of the reasons for low tractor growth. However, success of newly launched Oja, Target and Naya
Swaraj tractors in the 20HP and 30HP range led M&M to win market share of 12.8% quickly.
In the farm machinery segment, M&M sees a robust demand with 15 new products launches
in the Rice Cultivators, Rice and Vegetable Transplantors, Rotavators space. M&M is #2 in the
Rotavator space with 20.3% market share (16.5% in FY23) leading to a growth of 32% in the
farm Machinery segment in FY24. On high base of FY23, we saw base effect as well in FY24.
Currently we expect domestic FES segment to grow at 7%/10% in FY25E/26E respectively as
against 6% fall in FY24. We believe that due to election year, first half of the year may remain
soft while on expectations of strong monsoons and weakening El Nino (as predicted by MET
departments), we believe H2 FY25 to be stronger than H1.
LKP Research 2
MAHINDRA & MAHINDRA LIMITED | Q4 FY24 Result Update
LKP Research 3
MAHINDRA & MAHINDRA LIMITED | Q4 FY24 Result Update
SOTP Valuation
Particulars Basis Subs Discount Value per share (₹)
M&M P/E (@15x FY 26E EPS) - 2364
M&M Financial Services Market cap 25% 49
Tech Mahindra Market cap 25% 282
Mahindra Lifespaces Market cap 30% 8
Mahindra Logistics Market cap 30% 11
Mahindra Holiday & Resorts Market cap 30% 14
Swaraj Engines Market cap 30% 9
RBL Market cap 25% 3
Subsidiaries Total SOTP value 376
Total 2740
LKP Research 4
MAHINDRA & MAHINDRA LIMITED | Q4 FY24 Result Update
LKP Research 5
MAHINDRA & MAHINDRA LIMITED | Q4 FY24 Result Update
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