Mahindra & Mahindra Ltd. · NSE:M&M
Mahindra & Mahindra — FY2023 Earnings Presentation
66 slides from Mahindra & Mahindra's earnings presentation, May 26, 2023
Slide 1: Cover letter to stock exchanges
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: 26th May, 2023 National Stock Exchange of India Limited BSE Limited "Exchange Plaza", 5th Floor, Phiroze Jeejeebhoy Towers, Plot No.C
Slide 2: Reignited Value Creation
Reignited Value Creation Press Meet 26 May 2023 1
Slide 3: Key Messages
Key Messages • Consolidated PAT crosses Rs 10,000 Cr … significant growth … Standalone PAT (after EI) at Rs 6,549 Cr (6.7x over F21, 1.3x over F22) … Consolidated PAT (after EI) at Rs 10,282 Cr (3.1x over F21*, 1.6x over F22) • Consistent delivery on our Commitments … Pivot to growth in core busines
Slide 4: Standalone M&M results: F23
Standalone M&M results: F23 Rs Cr Revenue PAT before EI* PAT after EI 84,960 47% 57,787 7,770 52% 6,549 34% 5,120 4,870 F22 F23 F22 F23 F22 F23 Strong volume growth with operating leverage 3 * PAT before EI (net of taxes)
Slide 5: Consolidated M&M results: F23
Consolidated M&M results: F23 Rs Cr Revenue PAT before EI* PAT after EI 34% 1,21,269 90,171 10,282 56% 42% 8,893 6,272 6,577 F22 F23 F22 F23 F22 F23 ‘Core’ transformation yielding results 4 * PAT before EI (net of taxes)
Slide 6: Farm Equipment
FARM EQUIPMENT TRANSFORM FARMING ENRICH LIVES
Slide 7: Farm Highlights
FARM HIGHLIGHTS Q4 F23 VOLUMES: 89.1k VOLUMES: 404k 24% YoY 15% YoY MARKET SHARE 40.7% MARKET SHARE 41.2% 230 bps YoY 120 bps YoY Highest Q4 Market Share in last 12 years ~3% gain in Last 2 years 6
Slide 8: Market Leadership: Highest Q4 MS in last 12 years
MARKET LEADERSHIP: HIGHEST Q4 MS IN LAST 12 YEARS F23 MS at 41.2% (gain of 1.2% vs PY) Q4 F23 MS at 40.7% (gain of 2.3% vs PY) 40.7% 39.4% 37.9% 38.4% 35.8% Q3 F21 Q1 F19 Q2 F19 Q3 F19 Q4 F19 Q1 F20 Q2 F20 Q3 F20 Q4 F20 Q1 F21 Q2 F21 Q4 F21 Q1 F22 Q2 F22 Q3 F22 Q4 F22 Q1 F23 Q2 F23 Q3 F23 Q4 F23 7 M
Slide 9: Naya Josh | Naya Andaaz | Naya Swaraj
NAYA JOSH | NAYA ANDAAZ | NAYA SWARAJ New styling: appealing to young & new customers while retaining the loyalists Retaining the Signature Cues ▪ Straight lines, mesh grille, Dual tone colour ▪ Enhanced power & reliability ▪ Better ergonomics & comfort ▪ Upgraded engine & lift capacity Digital Inst
Slide 10: Swaraj Light Weight Tractor Platform
SWARAJ LIGHT WEIGHT TRACTOR PLATFORM Launch: 2nd June 25 & 29 HP Light Weight Tractor portfolio New segment: Specialist Spraying & Inter culture 9
Slide 11: Global Launch: Most technologically advanced Global Tractor Platform
Global Launch: 15th Aug Most technologically advanced Global Tractor Platform
Slide 12: Farm Machinery – Scaling Up for Quantum Growth
FARM MACHINERY – SCALING UP FOR QUANTUM GROWTH Highest ever Volumes & Revenue F23 Revenue: 38% YoY growth Rotavators Performance ▪ F23 MS at 16.5%, 3.5% gain YoY ▪ #2 in Rotavators ▪ Launch of Medium Segment Rotavator 11
Slide 13: Farm Q4 Financials
FARM Q4 FINANCIALS Rs Cr Revenue PBIT (Before EI) 29% 38% Standalone 5,584 932 4,327 678 Q4 F22 Q4 F23 Q4 F22 Q4 F23 30% 25% Consolidated 8,023 929 743 6,178 Q4 F22 Q4 F23 * Q4 F22 Q4 F23 * 12 * Farm consolidated Q4 F23 nos are after hyper inflation accounting for Turkey companies
Slide 14: Farm F23 Financials
FARM F23 FINANCIALS Rs Cr Revenue PBIT (Before EI) 22% 10% Standalone 24,089 19,767 3,953 3,580 F22 F23 F22 F23 18% 8% Consolidated 32,028 4,212 3,891 27,060 F22 F23* F22 F23 * 13 * Farm consolidated F23 nos are after hyper inflation accounting for Turkey companies
Slide 15: FES Margin Improvement Continues
FES MARGIN IMPROVEMENT CONTINUES FES Standalone PBIT % Core Tractor1 PBIT % 19.9% 19.3% 18.3% 16.7% 17.8% 16.6% 17.5% 16.4% 16.0% 17.1% 17.0% 15.7% F19 Q4 F22 Q1 F23 Q2 F23 Q3 F23 Q4 F23 F19 Q4 F22 Q1 F23 Q2 F23 Q3 F23 Q4 F23 14 1Core Tractor comprises of Tractor business (incl exports) and excludes
Slide 16: Low Correlation of Tractor Sales Growth with El Niño
LOW CORRELATION OF TRACTOR SALES GROWTH WITH EL NIÑO Historically, El Niño has had low correlation with tractor sales growth Industry growth at 8% in El Niño Years % Deviation of Year Tractor industry rainfall (LTA) 1972-73 -20.4% 1976-77 0.1% 5% 1977-78 5.3% 24% ▪ Average tractor industry growth in
Slide 17: Automotive Business
AUTOMOTIVE BUSINESS mi Rise mahinedra
Slide 18: Auto Highlights
AUTO HIGHLIGHTS Q4 F23 VOLUMES: 189.2k VOLUMES: 698.5k 21% YoY 50% YoY SUV REVENUE MS 19.6% SUV REVENUE MS 19.1% 170 bps YoY 370 bps YoY #1 Revenue MS for last 5 Quarters 17
Slide 19: #1 in SUV
#1 IN SUV VOLUMES REVENUE MARKET SHARE #2 in MS for 3 consecutive quarters #1 for 5 consecutive quarters 20.6% 99,112 19.6% 19.0% 91,632 90,797 17.9% 17.1% 74,779 75,420 15.6% 56,887 14.2% 52,521 49,446 12.6% 12.9% 42,570 Q4 F21 Q1 F22 Q2 F22 Q3 F22 Q4 F22 Q1 F23 Q2 F23 Q3 F23 Q4 F23 Q4 F21 Q1 F22 Q
Slide 20: Strong UV Performance & Pipeline
STRONG UV PERFORMANCE & PIPELINE Open Bookings: ~292k 29k open bookings 78k open bookings 58k open bookings 8.2k open bookings 117k open bookings ~10k per month ~8k per month ~14k per month ~10k per month ~14k per month XUV3OO & THAR BOLERO SCORPIO-N XUV4OO XUV7OO (Incl RWD) (incl NEO) (incl Classic
Slide 21: High Decibel Unveil of BEVs
ONE-OF-A-KIND HIGH DECIBEL UNVEIL OF BEVS Fashion x Bollywood x Sports to unveil the BE.05, XUV.e9 and BE-RALL-E for the first time in India 65 Mn + Reach 25 Mn + Views 2.7 Mn + Engagements 20 20
Slide 22: #1 in LCV <3.5T
#1 IN LCV <3.5T F23 MS 45.5%, gain of 5.2% YoY LCV <3.5T Volumes LCV <3.5T MS 61,839 61,345 48.1% 59,000 57,029 58,327 46.9% 46.5% 44.2% 44.4% 42.7% 44,165 37.5% 37,782 33,166 34,351 34.9% 33.2% Q4 F21 Q1 F22 Q2 F22 Q3 F22 Q4 F22 Q1 F23 Q2 F23 Q3 F23 Q4 F23 Q4 F21 Q1 F22 Q2 F22 Q3 F22 Q4 F22 Q1 F23
Slide 23: All New Bolero Maxx Pik-Up Range
ALL NEW BOLERO MAXX PIK-UP RANGE Segment First Features Height adjustable iMAXX Telematics seat Category Creation with 2T Pay Load New m2Di engine Architecture Redefined Turn Safe Lights 10 feet Cargo 22 Length
Slide 24: Last Mile Mobility
LAST MILE MOBILITY Highest ever E-3Ws volumes1 at 14.7k in Q4 F23 Market Leadership in E-3W with 67% MS in Q4 F23 Sales Volume1 22,619 23,131 21,459 17,499 8,476 16,436 11,994 9,658 11,072 9,930 ▪ Investment by IFC 14,655 - Rs.600 cr investment at Rs.6,020 cr valuation 10,625 11,801 ▪ Investment in
Slide 25: Auto Q4 Financials
AUTO Q4 FINANCIALS Rs Cr Revenue PBIT (Before EI) 35% 82% Standalone 16,400 12,185 1,190 653 Q4 F22 Q4 F23 Q4 F22 Q4 F23 34% 83% Consolidated 16,742 1,113 12,493 608 Q4 F22 Q4 F23 Q4 F22 Q4 F23 24 Auto Standalone numbers are post-merger with MEML
Slide 26: Auto F23 Financials
AUTO F23 FINANCIALS Rs Cr Revenue PBIT (Before EI) 63% 194% Standalone 58,511 3,750 35,928 1,276 F22 F23 F22 F23 62% 191% Consolidated 3,651 59,815 37,013 1,254 F22 F23 Q4 F22 Q4 F23 25 Auto Standalone numbers are post-merger with MEML
Slide 27: Auto Margin Improvement Continues
AUTO MARGIN IMPROVEMENT CONTINUES Auto Standalone PBIT% 7.8% 7.3% 6.7% 6.0% 5.4% 5.5% F19 Q4 F22 Q1 F23 Q2 F23 Q3 F23 Q4 F23 26 Numbers are Post-Merger with MEML
Slide 28: 3 Year Journey
3 YEAR JOURNEY 27
Slide 29: FES Conso Highlights
FES CONSO HIGHLIGHTS Rs Cr Rs Cr Revenue PBIT (before EI) ROCE % 1.5x + 28% 1.9x pts 32,028 61.6% 4,212 21,113 2,277 33.7% F20 F23 F20 F23 F20 F23 28 F23 nos are after Hyperinflation accounting adjustment for Turkey companies Capital employed on 2 point average
Slide 30: Auto Conso Highlights
AUTO CONSO HIGHLIGHTS Rs Cr Rs Cr Revenue PBIT (before EI) ROCE % 2.1x + 20% 2.8x pts 59,815 30.9% 3,651 28,824 1,310 10.9% F20 F23 F20 F23 F20 F23 29 Published consolidated segment results of Auto excluding SYMC Capital employed on 2 point average
Slide 31: AFS 2025 Commitments: Updates
AFS 2025 COMMITMENTS1: UPDATES Revenue Growth of 15-20%+ CAGR Achieved 2-year CAGR of 34% in F23 Leadership in SUV segment (Revenue) #1 in SUV revenue MS with 19.1% MS in F23 Leadership in LCV<3.5T Achieved 45.5% MS in LCV<3.5T (gain of 4% vs F21) Grow Market share in Tractors 3% MS gain in last 2 y
Slide 32: What Next?
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Slide 33: Farm | Strategic Imperatives
FARM | STRATEGIC IMPERATIVES Build a domestic fortress Grow market share through product launches and channel expansion Scale FM1 exponentially: 10x by F26 Building out product portfolio and channel expansion Significantly grow international business: 1.6x by F26 Focus on product launches and new ma
Slide 34: Auto | Strategic Imperatives
AUTO | STRATEGIC IMPERATIVES Propel ICE SUVs with cutting edge products: #1 in Revenue MS Turn-on Design, Democratize Technology, Class leading Performance, Advanced Safety, Premiumization Pioneering a new era with category creating E-SUVs Purpose-built platforms, Software defined architecture, Ecos
Slide 35: Financial results: Q4 F23 (Standalone)
Financial results: Q4 F23 STANDALONE M&M Rs Cr Revenue PAT before EI* PAT after EI 22,571 31% 17,238 1,975 67% 1,549 22% 1,185 1,269 Q4 F22 Q4 F23 Q4 F22 Q4 F23 Q4 F22 Q4 F23 34 * PAT before EI (net of taxes)
Slide 36: Financial results: Q4 F23 (Consolidated)
Financial results: Q4 F23 CONSOLIDATED M&M Rs Cr Revenue PAT before EI* PAT after EI 32,366 25% 25,934 2,600 28% 2,637 18% 2,026 2,237 Q4 F22 Q4 F23 Q4 F22 Q4 F23 Q4 F22 Q4 F23 35 * PAT before EI (net of taxes)
Slide 37: F23 Financials
F23 Financials D Ri. mahindra ~
Slide 38: Standalone M&M results: F23
Standalone M&M results: F23 Rs Cr Revenue PAT before EI* PAT after EI 84,960 47% 57,787 7,770 52% 6,549 34% 5,120 4,870 F22 F23 F22 F23 F22 F23 37 * PAT before EI (net of taxes)
Slide 39: Consolidated M&M results: F23
Consolidated M&M results: F23 Rs Cr Revenue PAT before EI* PAT after EI 34% 1,21,269 90,171 56% 42% 10,282 8,893 6,272 6,577 F22 F23 F22 F23 F22 F23 38 * PAT before EI (net of taxes)
Slide 40: TechM & MMFSL
TechM & MMFSL Rs Cr Revenue PAT Highlights TechM 19% ▪ TCV of $2.9Bn+ … soft market demand 53,290 44,646 (13)% ▪ Improved free cash flow conversion 5,566 4,831 ▪ Margins under pressure F22 F23 F22 F23 Disbursements PAT Highlights 80% MMFSL 49,541 ▪ Highest ever disbursements; AUM 27% 27,581 1,984
Slide 41: Growth Gems (Listed)
Growth Gems (Listed) Rs Cr Rs Cr Logistics* Hospitality Real estate 155 115 71% (35)% 101 PAT PAT PAT 68 26 50% 18 F22 F23 F22 F23 F22 F23 ▪ Crossed 5K of revenue 24%; ▪ Membership sales 70%; member ▪ Record pre-sales of 1,812 Cr EBITDA margin 60 bps adds at 17.5K & upgrades ▪ Foray into socie
Slide 42: PAT (After EI): F23
PAT (AFTER EI): F23 CONSOLIDATED M&M Rs Cr F22 F23 F22 to F23 Auto & Farm* 3,654 5,986 56% 1,084 10,282 TechM & MMFSL* 2,229 2,515 286 64 61 2,332 Growth Gems* 280 344 6,577 Investments* 109 48 EI net of tax 305 1,389 PAT AFTER EI AUTO & TECHM & GROWTH INVESTMENTS EI PAT AFTER EI Total 6,577 10,282
Slide 43: Cash Flow: F23
Cash Flow: F23 Rs Cr Rs Cr STANDALONE M&M RsCr Rs Cr Auto and Farm Group companies Total Opening Balance 12,099 6,228 + Inflow 9,659 3,018 12,677 - Capex (3,431) (3,431) - Capital deployed (2,890) (262) (3,152) Net cashflow (incl. invt) 3,338 2,756 6,094 - M&M Debt repayment & others (2,348) - Divid
Slide 44: Cash Deployment (F22-F24)
Cash Deployment (F22-F24) Rs Cr Rs Cr RsCr Rs Cr Base Invt Change Total Comments Auto capex (excl MEAL^) 7,900 +1,600 9,500 Capacity & Regulatory MEAL Investments 2,075 +1,125 3,200 Farm capex 3,400 - 3,400 Auto & Farm Investments* 1,500 +500 2,000 Group Cos. Investments 2,700 (1,100) 1,600 External
Slide 45: Thank You
Thank You 44
Slide 46: Segment results: Q4 F23
Segment results: Q4 F23 Rs Cr Rs Cr Revenue PBIT RsCr Cr Rs Q4 F22 Q4 F23 Q4 F22 Q4 F23 Automotive 12,493 16,742 608 1,113 Farm equipment 6,178 8,023 743 929 Financial services 2,844 3,420 850 912 Hospitality 542 712 16 87 Real estate 163 263 (24) (11) Others 4,456 4,195 236 12
Slide 47: Segment results: F23
Segment results: F23 Rs Cr Rs Cr Revenue PBIT RsCr Cr Rs F22 F23 F22 F23 Automotive 37,013 59,815 1,254 3,651 Farm equipment 27,060 32,028 3,891 4,212 Financial services 11,209 12,554 1,404 2,789 Hospitality 2,059 2,525 99 201 Real estate 397 616 (81) (101) Others 15,108 17,273
Slide 48: Strategy Refresh
Strategy Refresh Press Meet|. May 2023
Slide 49: Regained #1 position in value creation
Regained #1 position in value creation M&M is best-performing stock in Nifty50 since 20021 1st in last 20 years 2nd in last 1 year Company TSR% Ranking Company TSR% Ranking Mahindra 27% 1 ITC 68% 1 Britannia 27% 2 Mahindra 57% 2 Dabur India 26% 3 Coal India 41% 3 Bajaj Holdings 26% 4 NTPC 34% 4 HCL
Slide 50: PAT Lens: History of value creation with accelerating trajectory
PAT Lens: History of value creation with accelerating trajectory PAT* (Rs. Cr.) FY2002-2023 +75% 10,282 -5% 4,667 3,347^ +43% 66 FY02 FY14 FY21 FY23 * After Exceptional Items after Non-Controlling Interest 3 ^ PAT after EI for continuing operations
Slide 51: We created a sharp strategy and followed through
We created a sharp strategy and followed through FY23 FY22 FY21 Capital allocation Pivot to growth (1 year agenda) (2 years agenda) Strategy − Turnaround or exit loss − Transform Core making companies − Establish Growth Gems Commitments 18% RoE 15-20% EPS growth Purpose and Values 4
Slide 52: FY21: We focused on disciplined capital allocation
Deep dive FY21: We focused on disciplined capital allocation 1 B 2 PAT^ (Rs. Cr.) Loss making entities Turnaround Exit (26)* (3,429) In process FY20 FY23 * FY23 PAT is for continuing operations and does not include any losses of exited entities. It excludes hyperinflation accounting impact of Rs 120
Slide 53: FY22 and FY23: Transforming core
Deep dive FY22 and FY23: Transforming core… Actions Outcome • 5 mega launches…Quantum leap UV revenue MS: 13.2% → 19.6% • Regaining EV leadership; $9.1 Bn valuation (Q4F20) (Q4F23) Auto • Strengthened leadership through new launches and network expansion Market share: 39.4% → 40.7% Transform (Q4F20)
Slide 54: Establishing growth gems
…and establishing growth gems Progress made so far Valuation¹ ($ Mn) On track to achieve target FY20 FY23 67% market share in 3W EV; IFC investment <1002 +630 Mn 734 Unlock OTPP investment to accelerate scale-up <200 +90 Mn 290 Robust launch pipeline with 9 launches; 4000+ Crs GDV acquired 120 +550
Slide 55: We delivered, and built foundation for growth
We delivered, and built foundation for growth Return on Equity EPS Market cap* in INR in INR '000 Cr. +6.1 pts 19.9% 1.9X 92 144 1.7X 13.8% 49 99 84 4.4% 16 FY19 FY21^ FY23 FY19 FY21^ FY23 FY19 FY21 FY23 Enablers Data & Customer Purpose Talent Synergy Technology Experience *M&M Limited market cap; C
Slide 56: Opportunity today?
Opportunity today? India is well positioned India is poised to make Mahindra portfolio is across global world class products well positioned macrotrends at scale 9
Slide 57: Global Macrotrends and India Advantage
Global Macrotrends and India Advantage Impact India Advantage Attitudinal shifts and new Rapid acceleration in consumer "Income Pyramid" to "Income Diamond"; consumer demand 63%1 population with income >Rs. 500K by '47 Leading tech stacks – personal, financial, Digital economy Transformation of busi
Slide 58: India will add $4.2 Trillion to its GDP by 2030
India will add $4.2 Trillion to its GDP by 2030 Sectors mapped to macrotrends Sector contribution to GDP growth ($ Bn) FY23 FY30 Consumer, lifestyle and eCommerce 740 +1185 1925 Agriculture solutions 540 +415 955 Presence in Sectors Manufacturing and capital goods 400 +430 830 Financial services 180
Slide 59: Presence in Sectors
Our businesses are well aligned with growth opportunities Sectors mapped to macrotrends Current portfolio Core Growth Gems Consumer, lifestyle and eCommerce Agriculture solutions Presence in Sectors SUVs LCVs Manufacturing and capital goods Financial services Logistics and mobility Green energy Tech
Slide 60: Deliver Scale
Strategic imperatives FY24 - 26 FY22 - 23 FY21 Deliver Scale Market Leadership Pivot Resilience Capital to growth Allocation Value Creation 13
Slide 61: How will we deliver scale?
How will we deliver scale? Capitalize on Unlock 5X Challenge for Market Leadership Full Potential Growth Gems SUVs LCVs 14
Slide 62: Capitalize on Market Leadership
Capitalize on Market Leadership Auto Farm Customer Obsessed Brands Build a domestic fortress Propel ICE SUVs with cutting edge products Significantly grow international business Pioneering a new era with category Pioneering technology leadership creating E-SUVs Build CV Moat Leverage partnerships Go
Slide 63: Unlock Full Potential
Unlock Full Potential MMFSL Tech Mahindra Improve asset quality Drive 300 bps margin expansion Lead the market and drive 5G proliferation Digital transformation Grow new age offerings Growth through diversification Augment Deep-Tech High-impact Ecosystem partnerships Drive synergy from portfolio com
Slide 64: 5X Challenge for Growth Gems
5X Challenge for Growth Gems Strategic Imperatives Launch 10+ products/upgrades with best-in-class powertrain efficiency and design Unlock Scale-up from 1.5 GW to 7.0 GW by F27 with value unlock through InvIT structure Focus on key markets (MMR, Pune and BLR) through bock-bluster launches (15+ annua
Slide 65: Summary
Summary Re-ignited Well positioned to Deliver scale, with Global Value tap India transformation of our Leadership in Creation Opportunity core businesses and a Sustainable 5x challenge for Development growth gems 18
Slide 66: Thank You
THANK-YOU | 5 * 5 he a *