Mehabe score: 3 G Factor: 4 Piotski Score: 7 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 4 and Piotski score of 7.
Description
Mahindra & Mahindra is an India-based mobility products and farm solutions provider. The Company’s segments include Automotive, Farm Equipment, Financial Services, Real Estate, Hospitality and Others. Automotive segment comprises of sale of automobiles, spares, mobility solutions and construction equipment.(Source : Company Web-site)Site:M&MMain Symbol:M&M
Stock trades at 779.0, below its 50dma 794.02. However it is trading above its 200dma 748.46. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 794.02.
The 52 week high is at 952.15 and the 52week low is at 538.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– has been maintaining a healthy dividend payout of 92.02%
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -0.42% over past five years.
-Promoter holding is low: 19.44%
– has a low return on equity of 5.98% for last 3 years.
-Promoter holding has decreased over last 3 years: -3.39%
Competition
– The industry trades at a mean P/E of 51.2x. M & M trades at the industry’s max P/E of 53.46x. M&M trades at a P/E of 53.5x
– Industry’s mean G-Factor is 3.0 while the mean Piotski score is 7.0. M&M has a G-Factor of 4 and Piotski scoreof 7.
– Average 1 month return for industry is 2.6%. The max 1- month return was given by Hindustan Motors: a return of 8.64 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 21456.0 cr compared to Rs 16315.0 cr for period ended Mar 2020, a rise of 31.5%
Operating Profits reported at Rs 3399.0 cr for period ended Mar 2021 vis-vis 1577.0 for period ended Mar 2020 .
Operating Margins expanded 617.6 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 8.61 compared to Rs 5.67 for previous quarter ended Dec 2020 and Rs -10.74 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 74278.0 cr for period ended Mar 2021 vis-vis sales of Rs 95179.0 cr for the period ended Mar 2020, a fall of 28.1%. The 3 year sales cagr stood at -6.9%.
Operating margins expanded to 15.0% for period ended Mar 2021 vis-vis 13.0% for period ended Mar 2020, expansion of 200.0 bps.
Net Profit reported at Rs 1812.0 cr for period ended Mar 2021 vis-vis sales of Rs 127.0 cr for the period ended Mar 2020, rising 93.0%.
Company reported a poor Net Profit CAGR of -37.7% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 17909.0 cr for period ended Mar 2021 vis-vis Rs -1451.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 4.0% compared to 6.0% over the last 3 Years. – The stock has given a return of 39% on a 1 Year basis vis-vis a return of -6% over the last 3 Years. – The compounded sales growth on a TTM bassis is -22% vis-vis a compounded sales growth of -7% over the last 3 Years. – The compounded profit growth on a TTM basis is 1327% vis-vis a compounded profit growth of -32% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 38.93% vis-vis 37.9% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 9.91% vis-vis 10.02% for Dec 2020
Conclusion
– has reduced debt.
– has been maintaining a healthy dividend payout of 92.02% – has low interest coverage ratio.
-The company has delivered a poor sales growth of -0.42% over past five years.
-Promoter holding is low: 19.44%
– has a low return on equity of 5.98% for last 3 years.
-Promoter holding has decreased over last 3 years: -3.39%
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains below its 50 DMA 794.02 and is trading at 779.0. Shows a near term lack of buying interest.
