V S Parthasarathy Group CFO Mahindra & Mahindra ‘Manthan’ redux? 1 May 30, 2016
Churn…… Churn all Cascading Mahindra in Performance – Q4 & F16 around to India this churn Nectar? 2
Churn…… Churn all Cascading Mahindra in Performance – Q4 & F16 around to India this churn Nectar? 3
Churning all around - Faltering global growth US has seen some growth European economies are still struggling Record low commodity and oil prices Saving is… to repay debt 1 st rate hike by Fed since’06 The Bloomberg Commodity index Negative int. rate at Euro dropped to lowest in 12 yrs Divergent Interest rate policies
Churning all around - Faltering global growth ‘ India ’ is the star -yet to shine Migration issue but it is appreciating as safe haven currency Japan wants currency to depreciate
Churn…… Churn all Cascading Mahindra in Performance – Q4 & F16 around to India this churn Nectar?
India in churn of its own
India in churn of its own Government with good agenda, but lacks numbers Excellent macro-economic conditions; but, weak demand & investment growth Favourable oil / commodity prices, falling interest rate, but poor exports Long term directional growth of auto is bullish; however, short-term challenges remains 60% of Indian agriculture is dependent on monsoon. 2 consequent monsoon deficit
India in churn of its own Govt. focusing on long term measures Experiencing short term pains Over- Lower MSP Ballooning of GST, Land bill ‘Bharat’ still leveraged increase NPAs stuck struggling Balance Sheet
Churn…… Churn all Cascading Mahindra in Performance – Q4 & F16 around to India this churn Nectar? 10
M&M, a microcosm of India… ‘Manthan @ Mahindra ’ Pressure on Tough year for M&M businesses In difficult times, tough get tougher.. Volumes Revenue 14 new launches in Auto and 2 Margins Two successive monsoon failure new Launches in FES New launches helped improve Moderate increase in MSP Tractor Market Share Demonstrating Successful launch of ground-up Rural slow-down impacting both tractor ‘Resilience’ and auto businesses gasoline KUV100 Increased competition in compact UV Focus on Agri – Consolidation segment impacting market share Discipline on Cost & Working Increase in cess on auto - 2% to 4% Capital Global focus – PMTC, Pininfarina & Expiry of Fiscal incentives (Haridwar) MAM Global slowdown affecting exports Benign Commodity & Oil prices 11
Churn…… Churn all Cascading Mahindra in Performance – Q4 & F16 around to India this churn Nectar? 12
FINANCIALS SNAPSHOT
Rs Crs Quarterly PERFORMANCE M&M + MVML SNAPSHOT Q4 FY 16 Q4 FY 15 12.0% 43,415 nos. 38,761 nos. Volume – FES 14.1% 1,40,509 nos. 1,23,169 nos. Volume - Auto 9,000 10,160 Net Sales & Operating Inc. 12.9% 1,269 1,004 EBIDTA 26.4% PBT Before EI 931 740 25.8% 662 550 PAT Before EI 20.4% OPM 12.5% 11.2% 130 bps PAT After EI 668 586 14.0% 14 14
SEGMENT REVENUE & RESULT – Q4 AS FES SEGMENT REVENUE SEGMENT REVENUE Q4 F 16 7451 Q4 F 16 2743 Q4 F 15 6515 Q4 F 15 2519 % Inc/ (Dec) 14.4% % Inc/ (Dec) 8.9% SEGMENT RESULT SEGMENT RESULT Q4 F 16 713 Q4 F 16 353 Q4 F 15 583 Q4 F 15 283 % Inc/ (Dec) 22.3% % Inc/ (Dec) 24.7%
Yearly PERFORMANCE Rs Crs M&M + MVML SNAPSHOT FY 16 FY 15 8.8% Volume – FES 2,14,173 nos. 2,34,766 nos. 6.3% Volume - Auto 4,94,096 nos. 4,64,850 nos. 36,968 Net Sales & Operating Inc. 38,857 5.1% EBIDTA 5,199 4,603 12.9% PBT Before EI 4,508 4,021 12.1% 3,292 3,088 PAT Before EI 6.6% OPM 13.4% 12.5% 90 bps 3,298 3,423 PAT After EI 3.7% 16 16
Performance Indicators Particulars F – 2016 F – 2015 OPM (%) 13.4 12.5 ROCE 17.4 17.4 Interest Coverage Ratio 18.8 14.0 EPS (Basic) (Rs.)* 56 52 * PAT before EI 17
Growth at ‘Churning’ stage M&M + MVML (Standalone) Net Revenue EBIDTA CAGR 0.7% CAGR -1.3%% 45000 6000 5329 5248 5197 38357 388173696838857 40000 5000 4603 35000 31370 4150 CAGR 26% CAGR 27% 30000 4000 3621 23564 25000 2965 3000 18604 20000 100261154113094 15000 2000 1257 1367 1093 10000 1000 5000 0 0 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 CAGR 16% CAGR 17% 18
Robust Financial Risk Profile DE Ratio M&M + MVML Gearing Multiple M&M + MVML Lower the better Lower the better 2.79 1.2 3.00 Net Gross 0.77 1 2.50 0.6 0.8 2.00 1.66 0.45 0.32 0.37 0.6 1.50 0.46 1.06 1.06 0.82 0.98 0.3 0.76 0.83 0.82 0.65 0.4 0.31 1.00 0.28 0.27 0.22 0.19 0.17 0.17 0.2 0.50 0.09 0.09 0.03 0.02 0.01 0 0 - FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
F-2016 Consolidated Result
Financial Highlights M&M Consolidated – FY 16 Vs FY 15 Total income EBIDTA PAT before EI Rs. 83,207 crs Rs. 6,777 crs Rs. 3,206 crs 10% 10% 12% Rs. 75,514 crs Rs. 6,150 crs Rs. 2,863 crs
Consolidated Segment Report
Segment Revenue Real Estate Aerospace & Steel Others Segment Revenue 1200 1110 1200 6000 1022 4920 1000 1000 5000 835 812 3914 800 800 4000 -25% -21% 600 600 3000 +26% 400 400 2000 200 200 1000 0 0 0 FY 15 FY 16 FY 15 FY 16 FY 15 FY 16 Segment Result 500 -105 0 448 450 -100 FY 15 FY 16 FY 15 FY 16 -110 400 -200 -115 350 -300 -62% -43% -16% 300 -116 -400 -120 250 -500 171 -125 200 -600 150 -700 -618 -130 100 -800 -135 50 -900 -134 -881 0 -140 -1000 FY 15 FY 16 23
Segment Revenue Steel trading Farm Equipment Financial Services Segment Revenue 1340 17500 6700 6594 17212 1320 6600 1320 17000 6500 1300 6400 16500 6300 -5% 1280 +9% +9% 6200 1253 6053 1260 15789 16000 6100 6000 1240 15500 5900 1220 5800 1200 15000 5700 FY 15 FY 16 FY 15 FY 16 FY 15 FY 16 Segment Result 1990 110 1450 1980 1394 1968 -2% -12% 109 1970 1400 1960 108 +1% 1350 1950 107 106 1300 1940 1928 106 105 1224 1930 1250 105 1920 1200 104 1910 1150 103 1900 1890 102 1100 FY 15 FY 16 FY 15 FY 16 FY 15 FY 16 24
Segment Revenue Automotive Hospitality IT Services Segment Revenue 47000 1800 500 1599 46298 434 450 1600 46000 353 400 1400 350 45000 1200 +8% +97% 300 +23% 812 1000 44000 250 800 42995 200 43000 600 150 400 100 42000 200 50 41000 0 0 FY 15 FY 16 FY 15 FY 16 FY 15 FY 16 Segment Result 2500 250 70 66 2197 199 60 2000 200 45 50 1321 1500 150 40 +117% 92 +66% 30 +45% 1000 100 20 500 50 10 0 0 0 FY 15 FY 16 FY 15 FY 16 FY 15 FY 16 25
Listed companies performance -PAT TML MMFSL MLDL MHRIL* PAT before EI PAT Q4 Q4 Q4 Q4 Rs 897 crs Rs 411 crs Rs 32 crs Rs 49 crs 16 16 16 16 Q4 Q4 Q4 Q4 Rs 472 crs Rs 367 crs Rs 10 crs Rs 31 crs 15 15 15 15 FY FY FY FY Rs 3,118 crs Rs.772 crs Rs. 93 crs Rs. 117 crs 16 16 16 16 * MHRIL results are on Standalone basis
Value Creation Value Creation Group Market Cap (Rs Cr) F-2016 Market Cap (31st Mar16) Rs Crs 154510 Mahindra & Mahindra 75,196 Tech Mahindra 45,966 MMFSL 13,881 Ssangyong 6,564 Mahindra Holidays 3,432 Mahindra Lifespaces 1,729 Swaraj Engines 1,064 6583 1434 Mahindra CIE 6,343 F1995 F2005 F2016 EPC Industries 335 Prices as on 31 ST March Total 1,54,510 $ = INR 66.35 $ 23.3bn 27
Result speaks Returns in No. of times & CAGR % As at 31st March 2016 Last 15 years Last 5 years LAST 25 YEARS M&M 116.9 40.3 1.7 21% 28% 12% 13% Sensex 21.0 7.0 1.3 14% 5 % Gold $/Oz 3.5 5% 3.5 0.9 5% -3 % Gold $/Oz Sensex M&M
Mahindra received the Best Risk Management award from ICICI Lombard & CNBC TV18 M&M won the Business Today “Best Companies to Work For” award in 2016 Keshub Mahindra was honoured with the Lifetime Achievement Award from ASSOCHAM Golden peacock award for Excellence in Corporate Governance M&M: 2015 & 2006 MMFSL: 2013 Anand Mahindra was declared Best CEO overall in the Large Companies Tech Mahindra: 2014 by Business Today 29
MWCJ becomes first project in Asia to reach C40 Stage 2 MMFSL is among the best in the prestigious Dun & Bradstreet’s India’s Top 500 Companies 2014 Mahindra received ICSI award for Best Governed Company in 2015 Mahindra in top 2 in Finance Asia poll in the ‘ Investor Relations' category in India Tech Mahindra bags the Forbes Top100 Global Meets Local 2015 Award MMFSL is among the best in the prestigious Dun & Bradstreet’s India’s Top 500 Companies 2014 TechM won Golden Peacock Award 2015 for Risk Management 30
MLDL domestic rating Debut International MVML domestic rating AAA rating upgraded by two notches from Rating at par with India upgraded to AAA reconfirmed A+ to AA Digitisation @ Mahindra String of Pearls - PMTC, MAM & Pininfarina
This has been the most exciting year of New launches for us New Age XUV New Thar CRDe XUV 500 AT TUV300 500 Imperio KUV100 Swaraj 960 NuPro and Soboro Supro Minivan Jeeto Minitruck Supro Maxitruck
Churn…… Churn all Cascading Mahindra in Performance – Q4 & F16 around to India this churn Nectar?
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