Mahindra & Mahindra Ltd. · NSE:M&M
Mahindra & Mahindra — Q2 FY2023 Earnings Presentation
43 slides from Mahindra & Mahindra's earnings presentation, Nov 11, 2022
Slide 1: Exchange Intimation Letter - Analyst Meeting Presentation
Mahindra & Mahindra Ltd. Mahindra Towers, Dr. G. M. Bhosale Marg, Worli, Mumbai 400 018 India Tel: +91 22 2490 1441 Fax: +91 22 2490 0833 www.mahindra.com REF:NS:SEC: 11th November, 2022 National Stock Exchange of India Limited BSE Limited "Exchange Plaza", 5th Floor, Phiroze Jeejeebhoy Towers, Plot
Slide 2: Reigniting Value Creation
Reigniting Value Creation Analyst Meeting Dr Anish Shah | 11 November 2022 1
Slide 3: Key Messages
Key Messages • Auto drives strong financial results … Standalone: revenue 57% & PAT* 46% • Steady performance across Group companies … Consolidated: revenue 39% & PAT* 44% • Value unlock continues … Susten–OTPP and MLDL-Actis * After EI 2
Slide 4: Financial Summary: Q2 F23 Standalone
Financial Summary: Q2 F23 STANDALONE M&M Rs Cr Revenue PAT after EI 61% YTD 20,839 57% 13,314 54% YTD 2,090 46% 1,433 Q2 F22 Q2 F23 Q2 F22 Q2 F23 Auto business performance driving results 3
Slide 5: Financial Summary: Q2 F23 Consolidated
Financial Summary: Q2 F23 CONSOLIDATED M&M Rs Cr PAT before EI PAT after EI 111% YTD 2,773 44% 73% YTD Fair value gain 1,975 2,040 3% 1,929 Q2 F22 Q2 F23 Q2 F22 Q2 F23 Steady performance across Group companies 4
Slide 6: Financial Summary: Q2 F23 Consolidated excl. MMFSL
Financial Summary: Q2 F23 CONSOLIDATED M&M Rs Cr Rs Cr PAT before EI PAT after EI (excl. MMFSL) (excl. MMFSL) 76% YTD 2,516 86% 41% YTD 1,754 25% 1,407 1,350 Q2 F22 Q2 F23 Q2 F22 Q2 F23 Steady performance across Group companies 5
Slide 7: Q2 F23: In a Snapshot
Q2 F23: In a Snapshot CONSOLIDATED M&M Rs Cr CORE CORE GROWTH GEMS INVESTMENTS Auto and Farm TechM and MMFSL Listed & unlisted Incl. Forex, others YTD YTD YTD YTD 57% 2.1x 82% 2.4x 1,262 58% 952 (32)% (29)% (54)% 797 648 106 75 119 55 Q2 F22 Q2 F23 Q2 F22 Q2 F23 Q2 F22 Q2 F23 Q2 F22 Q2 F23 Auto: Vol
Slide 8: Our commitments
Our commitments Target Performance ROE% Path to RoE 18% RoE 13.8% 4.4% 14.8% 20.5% # 0.3% Capital Allocation F19 F20 F21 F22 F23 YTD EPS: Rs. Growth 15 - 20% 48.7 16.2 58.8 44.5 Operational Excellence EPS Growth 1.0 F19 F20 F21 F22 F23 YTD MLDL market cap Susten – Ontario Teachers Rs Cr 6,324* Rs Cr
Slide 9: Q2 F23 Analyst and Investor Conference Automotive & Farm Sectors
Q2 F23 Analyst and Investor Conference Automotive & Farm Sectors Rajesh Jejurikar Executive Director, Auto & Farm Sectors 11 November 2022
Slide 10: Highlights – Q2 F23
HIGHLIGHTS – Q2 F23 Farm Auto #1 in Tractors #1 in SUVs ▪ Q2 F23 MS at 40.1% ( YoY) ▪ Revenue MS in Q2 (19.0%) & H1 F23 (18.1%) ▪ H1 F23 MS at 41.5% (50 bps YoY) ▪ Vol MS in Sep’22 (19.3%) Highest Q2 Overall volumes Highest ever Volumes (174k) Vol : 92.6k (5.2% YoY growth) ▪ SUV: 91.8K (85.6% YoY gr
Slide 11: Auto + Farm Segments: Standalone
AUTO + FARM SEGMENTS: STANDALONE* Rs Cr Revenue PBIT (Before EI) 58% 61% 20,263^ 1,812# 5,538 12,820 908 1,127 4,903 14,725 916 7,917 903 211 Q2 F22 Q2 F23 Q2 F22 Q2 F23 Auto Farm Auto Farm ^Highest ever quarterly Revenue #2nd Highest ever quarterly PBIT 10 *Addition of published standalone segment
Slide 12: Auto + Farm Segments: Consolidated
AUTO + FARM SEGMENTS: CONSOLIDATED* Rs Cr Revenue PBIT (Before EI) 52% 55% 1,918 22,737 7,506 1,239 1,002 14,968 6,723 1,021 15,231 916 8,245 218 Q2 F22 Q2 F23 Q2 F22 Q2 F23 Auto Farm Auto Farm 11 *Addition of published consolidated segment results of Auto and Farm (excludes Powerol & 2-Wheeler busi
Slide 13: Auto + Farm Segments: Sequential Margins
AUTO + FARM SEGMENTS: SEQUENTIAL MARGINS FES Standalone PBIT% Auto Standalone PBIT% 40 bps 40 bps 16.4% 6.1% 16.0% 5.7% 5.6% 15.7% Q4 F22 Q1 F23 Q2 F23 Q4 F22 Q1 F23 Q2 F23 12
Slide 14: Auto Margin Improvement
AUTO MARGIN IMPROVEMENT In Q3 F22, we mentioned achieving margin upside (~3%) in Auto over medium term driven by: ▪ End of introductory pricing for XUV 7OO & Thar ▪ Structured cost reduction program ▪ Operating leverage kicking in We have already achieved an improvement of 2.4% over Q3 F22: 2.4% 6.1
Slide 15: Auto + Farm Segments: Cost Optimization
AUTO + FARM SEGMENTS: COST OPTIMIZATION Reduction in Fixed Cost (incl Personnel Cost) FC as % to Revenue ▪ Savings of ~570 crs over F19* X + 140bps X ▪ 250 bps reduction through focused cost X - 20bps reduction initiatives X - 240bps X - 460bps ▪ 210 bps reduction due to operating leverage F19 F20 F
Slide 16: Farm Equipment
FARM EQUIPMENT TRANSFORM FARMING ENRICH LIVES
Slide 17: Above Average Monsoon and Healthy Reservoir Levels
ABOVE AVERAGE MONSOON AND HEALTHY RESERVOIR LEVELS Rainfall: % deviation from LPA Reservoir levels: % deviation from LPA 32% 30 30% 21 6 18% 15% -1 12% -22 1% East North All India West & South East North Central All India West South Central Source: Ministry of Agriculture As on 3rd Nov 16
Slide 18: Key Levers – F23
KEY LEVERS – F23 Build a Fortress in Domestic Business Aggressive Growth in Farm Machinery Global Expansion Reinvent Costs 17
Slide 19: Building Domestic Fortress
BUILDING DOMESTIC FORTRESS Market Share Uptick Oct YTD MS: 41.4% Uptick of 0.8% YoY Successful Yuvo Tech+ Launch 12.3% of H1 F23 volumes* FM Revenue H1 F23: 36% YoY growth On Track Projects 18 *of Mahindra brand
Slide 20: FES Global Businesses Q2 Performance
FES GLOBAL BUSINESSES Q2 PERFORMANCE MAgNA Sampo Negative impact of Russia- MS 5.8% [<110HP] Ukraine conflict MAM Tractor MS 5.6% Turkey Erkunt Traktor : MS 6.8% South Africa 16 dealers as on 30th Sep; Brazil 30 planned by year end MS 7.4% [ <100HP]; Portfolio & channel expansion 19
Slide 21: Automotive Business
AUTOMOTIVE BUSINESS mi Rise mahinedra
Slide 22: Auto YoY Performance
AUTO YOY PERFORMANCE 2x Revenue growth with 4x PBIT growth Rs Cr Standalone Revenue Standalone PBIT (Before EI) 1.9x 4.3x 14,725 903 7,917 211 Q2 F22 Q2 F23 Q2 F22 Q2 F23 21
Slide 23: Key Levers – F23
KEY LEVERS – F23 Maintain Strong Brand Value Develop Platform and EV Strategy Transform Customer Experience De-risk Supply Chain Optimize Costs 22
Slide 24: #1 in SUVs
#1 IN SUVs M&M UV Volumes M&M UV Revenue MS % 34,262 19.9% 27,380 26,620 18.2% 15.6% 15.0% 16.9% 16,636 17,469 13.9% 16,643 13.1% 12.9% 16,050 14,663 12,863 10.7% Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 #1 in Vol M
Slide 25: Strong SUV Performance & Pipeline
STRONG SUV PERFORMANCE & PIPELINE Highest Ever Monthly Bookings – 53k+ (Sept’22) Maintained Strong Pipeline with highest ever Sales ~13k open bookings 80k open bookings ~20k open bookings 13k open bookings 130k open bookings 6.4k per month 11.1k per month 4.9k per month 8.3k per month 17k in Oct’22
Slide 26: Action Packed Quarter
ACTION PACKED QUARTER XUV300 TurboSport 6th Oct Treo Zor Grand 29th Aug XUV400 VW 8th Sep Partnership 15th Aug Maxx BEV Design Pik-up 15 Aug 10th Aug Scorpio Scorpio-N Classic Booking 11th/12th 30th July Aug Jeeto CNG 400 8th Aug BII Investment 25 07th July
Slide 27: Born Electric Vision
BORN ELECTRIC VISION BE 05 BE 07 BE 09 XUV.e9 XUV.e8 Oct 2025 Oct 2026 TBC Apr 2025 Apr 2024 26 26
Slide 28: All Electric C-SUV
ALL ELECTRIC C-SUY
Slide 29: Capacity Expansions
CAPACITY EXPANSIONS Q4 F22 Q4 F23 Q4 F24 H1 F25 Per Month Capacity Exit Capacity Exit Capacity Exit Capacity Exit Capacity Thar Family 4k 6k 6k + XUV3OO & XUV4OO 5k 7.5k 9.5k (Q3 F24) + XUV7OO 6k 6k 10k (Q3 F24) = Bolero Family 9.5k 9.5k 9.5k = Scorpio-N - 6k 10k = Scorpio Classic (incl IO PU) 5.5k
Slide 30: LCV <3.5T Market Share Gain
LCV <3.5T* MARKET SHARE GAIN LCV <3.5T MS Growth 46.9% 44.2% 42.7% 37.5% 34.9% Q2 F22 Q3 F22 Q4 F22 Q1 F23 Q2 F23 LCV 0-2T MS Growth LCV 2-3.5T MS Growth 60.0% 60.3% 24.4% 58.4% 19.3% 19.3% 52.2% 16.3% 16.9% 49.1% Q2 F22 Q3 F22 Q4 F22 Q1 F23 Q2 F23 Q2 F22 Q3 F22 Q4 F22 Q1 F23 Q2 F23 29 *As per SIAM
Slide 31: LMM: E-3Ws
LMM: E-3Ws Highest ever E-3Ws volumes (10,000+) in Q2 F23 Sales Volume 10,625 5,099 6,427 6,506 5,508 3,667 2,761 2,853 2,529 1,345 5,526 2,979 3,666 3,653 2,322 Q2 F22 Q3 F22 Q4 F22 Q1 F23 Q2 F23 Treo eAlfa Q2 Performance ▪ Market Share Q2 at 67.2% ▪ E-3Ws: increasing sales share (~70%) in LMM port
Slide 32: Summary
SUMMARY Highest ever Revenue* With 2nd Highest ever PBIT* Farm: Sequential Margin Improvement Auto: 2x Revenue growth with 4x PBIT growth Farm: YTD Oct 0.8% MS Uptick Auto: Leadership maintained in Revenue MS LMM E-3W: Continued leadership with Highest ever Qtrly Volumes 31 *Addition of published st
Slide 33: Financials
Financials Analyst Meeting Manoj Bhat | 11 November 2022
Slide 34: Financial Summary: Q2 F23 Standalone Revenue and EBITDA
Financial Summary: Q2 F23 STANDALONE M&M Rs Cr Revenue EBITDA 61% YTD 20,839 57% 13,314 47% YTD 2,496 50% 1,661 Q2 F22 Q2 F23 Q2 F22 Q2 F23 33
Slide 35: Financial Summary: Q2 F23 Standalone PAT
Financial Summary: Q2 F23 STANDALONE M&M Rs Cr PAT before EI PAT after EI 45% YTD 54% YTD 2,338 38% 2,090 46% 1,688 1,433 Q2 F22 Q2 F23 Q2 F22 Q2 F23 34
Slide 36: Financials Summary: Q2 F23 Consolidated Revenue
Financials Summary: Q2 F23 CONSOLIDATED M&M Rs Cr Revenue -1) 43% YTD 29,870 39% 21,470 Segment Q2 F22 Q2 F23 V% Auto 8,245 15,231 85% FES 6,723 7,506 12% Group Cos. 7,195 8,069 12% Inter-segment (693) (936) Q2 F22 Q2 F23 35 (1-Tech Mahindra (Associate) revenue not included above
Slide 37: Financial Summary: Q2 F23 Consolidated PAT
Financial Summary: Q2 F23 CONSOLIDATED M&M Rs Cr PAT before EI PAT after EI 111% YTD 2,773 44% 73% YTD 3% Fair value gain 1,975 2,040 1,929 Q2 F22 Q2 F23 Q2 F22 Q2 F23 36
Slide 38: TechM Performance
TechM Performance Rs Cr Profit after Tax Highlights (10)% YTD 1,339 1,285 (4)% ▪ TCV of $700M+ …Robust demand for transformation projects ▪ Operating rigor to drive margin improvement ▪ QoQ in PAT margin % and FCF Q2 F22 Q2 F23 Focus on operating metrics improvement 37
Slide 39: MMFSL Provisions
MMFSL Provisions STANDALONE MMFSL Rs Cr F22 provisions F23 provisions H1 F22: (1,753) H1 F23: 270 1,151 345 763 746 (75) (2,517) Q1 F22 Q2 F22 Q3 F22 Q4 F22 Q1 F23 Q2 F23 Q2 F23 Q2 PAT 56%, F23 PAT 56%, driven drivenby bylower provision lower provision reversals reversals 38
Slide 40: Growth Gems (Listed)
Growth Gems (Listed) Rs Cr RsCr Rs Cr Logistics* Hospitality Real estate YTD YTD YTD 3.1x 88% ++ 59 138% (31)% (218)% 41 PAT PAT PAT 7 12 (8) 5 Q2 F22 Q2 F23 Q2 F22 Q2 F23 Q2 F22 Q2 F23 ▪ Revenue 28% led by Auto recovery, ▪ 79% occupancy with room inventory ▪ 1H F23 sales of Rs. 1,000 Cr organic
Slide 41: PAT (After EI): Q2 F23
PAT (AFTER EI): Q2 F23 CONSOLIDATED M&M Rs Cr Q2 F22 Q2 F23 Q2 F22 to Q2 F23 Auto & Farm* 797 1,262 44% 2,773 TechM & MMFSL* 952 648 779 304 31 65 1,929 464 Growth Gems* 106 75 Investments* 119 55 EI (46) 733 PAT AFTER EI AUTO & FARM TECHM & GROWTH INVESTMENTS EI PAT AFTER EI (Q2 F22) MMFSL GEMS (Q2
Slide 42: Thank you
Thank you _— 41
Slide 43: Segment results: Q2 F23
Segment results: Q2 F23 Rs Cr Rs Cr Revenue PBIT RsCr Cr Rs Q2 F22 Q2 F23 Q2 F22 Q2 F23 Automotive 8,245 15,231 218 916 Farm equipment 6,723 7,506 1,021 1,002 Financial services 2,910 2,974 1,428 698 Hospitality 560 598 71 58 Real estate 59 70 11 (42) Others 3,666 4,427 229 205
Mahindra & Mahindra — Q2 FY2023 Earnings Presentation on 6ix