Quantamental Equity Research on MAHINDRA & MAHINDRA LTD

	Quantamental Equity Research on MAHINDRA & MAHINDRA LTD | Release: 23 Nov 2018 12:55:06 UTC+05:30 | Reporting Currency: INR | Trading Currency: INR | Exchange:NSE/BSE NSE CODE:M&M and BSE CODE:500520
	Last Close:	INR 746.1
	Fair Value:	INR 1215.6
	Est. Price by Mar 19:	INR 798.9
	Market Capitalization (INR Crs):	92754.60
	Industry:	Cars & Utility Vehicles
	Rating:	STRONG BUY
	Upside:	63%
	Company Profile
	Mahindra and Mahindra Limited is engaged in the manufacture of passenger cars, commercial vehicles and tractors.
	Growth Per Share
	Particulars	1-Year	3-Year	5-Year
	Revenue %	10%	44%	79%
	EBIT %	43%	92%	82%
	Earnings %	103%	139%	83%
	Book Value %	24%	43%	85%
	Stock Total Return %	25%	32%	86%
	Share holding pattern
	Particulars	%age
	(A) Promoter & Promoter Group	22
	(B) FII/FPI	34
	(C) DII/Insurance Companies	21
	(D) Public holding < 2 lakhs of cap.	7
	(E) Others	16
	Grand Total	100
	Fundamentals (Historical and Estimated)
	Particulars	Mar-10	Mar-11	Mar-12	Mar-13	Mar-14	Mar-15	Mar-16	Mar-17	Mar-18	Mar-19 E	Mar-20 E	Mar-21 E	Mar-22 E	Mar-23 E
	Price	261	369	351	431	509	606	642	644	803	799	993	1180	1358	1525
	Return on Equity	24%	22%	19%	21%	20%	12%	12%	12%	20%	12%	14%	14%	14%	14%
	Price to Earning	6.1	7.4	6.9	6.2	6.7	12.0	12.7	10.8	13.3	19.5	19.5	19.5	19.5	19.5
	EVTI	0.8	0.9	0.7	0.7	0.8	0.9	0.9	0.9	1.4	1.3	1.4	1.4	1.5	1.5
	EVTIFM	6.1	7.4	6.9	6.2	6.7	12.0	12.7	10.8	13.3	19.5	19.5	19.5	19.5	19.5
	Price to Book Value	1.5	1.6	1.3	1.3	1.3	1.5	1.5	1.3	2.7	2.4	2.6	2.8	2.8	2.8
	Debt to Equity	1.4	1.2	1.4	1.4	1.5	1.5	1.6	1.6	1.5	1.3	1.0	0.8	0.6	0.4
	Dividend Yield	4%	3%	3%	3%	3%	2%	2%	2%	1%	1%	1%	1%	1%	1%
	Cash Flow to Firm	6%	-3%	-2%	3%	3%	10%	10%	5%	1%	9%	9%	8%	8%	8%
	Detailed Estimates
	Title	Mar-18	Mar-19 E	Mar-20 E	Mar-21 E	Mar-22 E	Mar-23 E
	Sales	92,093.95	100,733.40	109,080.02	116,923.49	124,050.31	130,252.83
	EBITDA	17,592.51	15,731.69	17,035.19	18,260.12	19,373.12	20,341.78
	EBIT	14,312.61	12,144.09	13,870.27	15,468.06	16,910.01	18,168.86
	PBT	10,325.52	8,157.00	10,139.22	12,048.65	13,866.20	15,571.89
	NPAT	7,510.39	5,081.72	6,316.61	7,506.16	8,638.48	9,701.10
	Price to Earning	13.29	19.54	19.54	19.54	19.54	19.54
	Price to Book Value	2.71	2.41	2.65	2.77	2.80	2.76
	Debt to Equity	1.52	1.27	1.03	0.80	0.60	0.42
	Return on Equity	0.20	0.12	0.14	0.14	0.14	0.14
	Enterprise Value to Total Income (EVTI)	1.45	1.30	1.37	1.43	1.46	1.49
	Enterprise Value to Total Income to Firm Margin(EVTIFM)	23.12	35.12	35.24	35.25	35.20	35.08
	Price or Est. Share Prices	803.11	798.90	993.05	1,180.10	1,358.15	1,525.25
	DISCOUNTED CASH FLOW
	Title	Mar-19 E	Mar-20 E	Mar-21 E	Mar-22 E	Mar-23 E
	PBT	8,157.00	10,139.22	12,048.65	13,866.20	15,571.89
	Interest	3,987.09	3,731.04	3,419.42	3,043.82	2,596.97
	Depreciation	3,587.59	3,164.92	2,792.05	2,463.11	2,172.92
	Cash Flow Before Tax	15,731.69	17,035.19	18,260.12	19,373.12	20,341.78
	Tax Rate	33.99	33.99	33.99	33.99	33.99
	Cash Flow After Tax	10,384.49	11,244.93	12,053.50	12,788.20	13,427.61
	Terminal Cash Flow	-				235,993.81
	Total Cash Flow	10,384.49	11,244.93	12,053.50	12,788.20	249,421.41
	Present Value of Cash Flow					180,180.21
	Debt					29,060.99
	Value of Equity					151,119.22
	Fair Value Per Share					1,215.60
	Equity	92,755
	Debt	55,898
	Beta	0.83	Take from Reuters
	Risk Free Rate	8%	Prevailing Yield in India
	Market Risk Premium	9%	Assuming 8.82% premium for Equity Investments
	Interest Paid					3,987
	Tax Benefit					914
	Interest Net of Tax					3,073
	Debt					55,898
	Cost of Debt					5%
	Cost of Equity					15%
	Debt Weight					38%
	Equity Weight					62%
	WACC					11%
	Cash Flow of Mar-23 E					13,427.61
	Growth					5.1%
	Present Value of Terminal Cashflow					235,993.81
	Peer Comparision
S.No	Name	CMP Rs.	Mar Cap Rs.Cr.	B.V. Rs.	Annualized ROE %	ROCE %	Latest EVTI	Latest EVTIFM	CMP / BV	P/E	Debt / Eq	Div Yld %	Growth Rate R %	SGR %	Ann Total Income	PQEIOI	QoQ Sales %	Qtr Sales Var %	QoQ Profits %	Qtr Profit Var %	Graham's Number Rs.
1	Maruti Suzuki	7,411.10	223,875	1,423.83	26.95	23.98	2.05	26.61	5.21	28.35	-	1.08	18.52	1,329.31	91,839	56.21	131	-0.12	3.05	13.42	-9.82
2	M & M	746.10	92,755	295.81	-	13.64	-	-	2.52	16.19	1.52	1.01	-	-	-	19.28	-	-	-	-	-
3	Ashok Leyland	109.30	32,085	24.09	31.88	28.40	0.86	14.28	4.54	16.26	0.14	2.22	17.37	100.20	30,481	49.25	72	21.73	25.21	24.18	42.26
4	Force Motors	1,700.30	2,241	1,416.34	11.02	11.16	0.61	20.82	1.20	14.38	-	0.59	10.04	9.09	3,581	61.06	87	-1.02	-1.30	-3.03	-4.91
5	Tata Motors	182.55	57,725	300.71	-5.55	8.55	0.32	50.67	0.61	381	0.93	-	-5.55	-5.14	288,796	35.48	-49	8.11	2.47	-49.49	-146.18
6	SML ISUZU	714.10	1,033	283.26	-9.11	3.77	1.03	-49.02	2.52	59.11	0.53	0.21	-6.78	-5.88	1,186	43.96	-117	-34.73	30.10	-138.49	-130.36