Mahindra & Mahindra Ltd. · NSE:M&M
Mahindra & Mahindra — Q2 2024 Earnings Presentation
35 slides from Mahindra & Mahindra's earnings presentation, Nov 10, 2023
Slide 1: Delivering Scale
Delivering Scale Analyst Meet Dr Anish Shah | 10 November 2023 1
Slide 2: Key Messages
Key Messages • Robust operating performance, except TechM Auto delivers rapid growth … PAT 2x Farm resilient despite tough market … share 150 bps MMFSL GS3 lowest ever at 4.3% ... PAT 48% due to PY writeback Growth Gems on track … PAT 2.5x TechM weak demand and reduction in non core … EBIT
Slide 3: Standalone M&M results: Q2 F24
Standalone M&M results: Q2 F24 Rs cr. Revenue PAT 20% YTD 25,773 17% 79% YTD 22,105 3,452 67% 2,068 Q2 F23 Q2 F24 Q2 F23 Q2 F24 PAT vs PY Q2 67%, YTD 79% 3
Slide 4: Consolidated M&M results: Q2 F24
Consolidated M&M results: Q2 F24 Rs cr. Revenue PAT 17% YTD 34,436 15% 29,871 33%* YTD SEL 2,348 6%* 564 reval gain 2,209* Q2 F23 Q2 F24 Q2 F23 Q2 F24 PAT vs PY (excl. SEL) Q2 6%, YTD 33% 4 * Excluding Swaraj Engines Ltd revaluation gain on stake increase with status change in Q2 F23 of Rs 564 c
Slide 5: Strategy Recap: Delivering Scale
Strategy Recap: Delivering Scale Rs cr. Rs cr. Auto and Farm TechM and MMFSL Growth Gems Capitalize on market leadership Unlock full potential 5X challenge 33%* (54)% 2.5x 1,815 619 1,369* 169 285 67 Q2 F23 Q2 F24 Q2 F23 Q2 F24 Q2 F23 Q2 F24 ▪ Market share gains ▪ MMFSL … turnaround on track ▪ e3W s
Slide 6: Capitalize on market leadership
Capitalize on market leadership Rs cr. Auto Farm ▪ SUV revenue 28% ▪ Resilient performance despite industry decline ▪ LCV market share 280 bps ▪ Mega launch of Oja and Naya Swaraj ▪ Operating leverage … margin 200 bps$ ▪ International markets remain muted Q2 F24 VPY Q2 F24 VPY SUV rev. market
Slide 7: MMFSL … Turnaround on track
MMFSL … Turnaround on track Rs cr. Commitment Update Current Quarter GS2% + GS3% Quarterly trends* Provisions PAT 21.9 19.8 16.4 276 14.3 10.4 10.7 10.0 Improve asset quality (345) 448 235 Q4 F22 Q1 F23 Q2 F23 Q3 F23 Q4 F23 Q1 F24 Q2 F24 Q2 F23 Q2 F24 Q2 F23 Q2 F24 ▪ Increasing share of non-cash col
Slide 8: Deep dive: Credit costs
Deep dive: Credit costs GS2% + GS3% Exit Rate* 21.5 21.9 17.9 10.4 F20 F21 F22 F23 F24E Provisions (%*) End Losses (%*) Credit Costs (%*) 2.1 1.7 3.3 2.9 4.9 2.6 -0.2 -1.4 + = 2.9 3.1 1.5 - 1.7 1.2 1.2 F20 F21 F22 F23 F24E F20 F21 F22 F23 F24E F20 F21 F22 F23 F24E Structural improvement in asset qua
Slide 9: Tech Mahindra … Transformation initiated
Tech Mahindra … Transformation initiated Strengths Actions Deep client relationships Complete leadership transition in 3Q End to End offerings across multiple domains Announced new customer & delivery organization Market Leadership in Telecom Industry veteran COO put in place Deep expertise in Manuf
Slide 10: Growth Gems 5X challenge
Growth Gems 5X challenge Rs cr. Susten LMM Real estate GWp Electric 3-wheelers Residential presales 2.6 7.0 8 5 74 0.7 2+ 1.5 Mar'23 Nov'23 Mar'27 F21 F24E F27E F21 F24E F28E Bids won Volume ‘000 Rs ‘000 cr. Hospitality Logistics CLPL ▪ Plan to outline 5x revenue by ▪ Targeting 10k cr. revenue by ▪
Slide 11: Consistent delivery on commitments
Consistent delivery on commitments Rs cr. RoE (%) EPS (Rs) 19.9 20.0# 52.4 14.8 44.5 13.8 30.3 21.0 0.3 4.4 11.4 0.3 ^ F19 F20 F21 F22 F23 H1 F24 H1 F19 H1 F20 H1 F21 H1 F22 H1 F23 H1 F24 # Annualised basis the YTD RoE 11 ^ Considering continuing & discontinued operations
Slide 12: Q2 F24 Analyst Meet: Automotive & Farm Sectors
Q2 F24 Analyst Meet AUTOMOTIVE & FARM SECTORS RAJESH JEJURIKAR EXECUTIVE DIRECTOR & CEO, AUTO & FARM SECTORS 10th November 2023
Slide 13: Automotive Business
AUTOMOTIVE BUSINESS mi Rise mahinedra
Slide 14: Q2: Auto
Q2: AUTO TOTAL VOLUMES* 212K 18% YoY REVENUE MS 19.9% 90 bps YoY #2 IN SUV REVENUE MS LCV <3.5T MS 49.6% 280 bps YoY HIGHEST QUARTERLY MS IN LAST 5 YRS 14 *Numbers include sales made by MLMML from Sep’23 onwards
Slide 15: Market Leadership in SUV
MARKET LEADERSHIP IN SUV VOLUMES REVENUE MARKET SHARE #2 in MS for 5 consecutive quarters RMS >19% for 5 consecutive quarters 20.6% 20.2% 19.9% 1,14,742 19.6% 19.0% 99,112 1,00,162 17.9% 17.1% 15.6% 75,420 91,632 90,797 56,887 12.9% 49,446 74,779 Q2F22 Q3F22 Q4F22 Q1F23 Q2F23 Q3F23 Q4F23 Q1F24 Q2F24
Slide 16: Strong UV Performance & Pipeline
STRONG UV PERFORMANCE & PIPELINE Open Bookings: ~286k 10k open bookings 70k open bookings 76k open bookings 11k open bookings 119k open bookings ~6k per month ~9k per month ~10k per month ~9k per month ~17k per month XUV3OO & THAR BOLERO SCORPIO-N XUV4OO XUV7OO (Incl RWD) (incl NEO) (incl Classic) ~
Slide 17: Robust Offtake to Support Bookings & Billings
ROBUST OFFTAKE TO SUPPORT BOOKINGS & BILLINGS ▪ M&M average dealer stock for Q2 F24 is ~ 30 days ▪ Priority to meet customer delivery sequence ▪ Month-end skew in ramp up due to steel shortage 17
Slide 18: #1 in LCV <3.5T
#1 IN LCV <3.5T Q2 F24 MS 49.6%, gain of 2.8% YoY LCV <3.5T Volumes LCV <3.5T MS 65,425 61,839 61,345 49.1% 49.6% 59,000 57,029 58,327 57,932 46.8% 46.5% 44.3% 44.4% 42.7% 44,165 37.5% 34.9% 34,351 Q2F22 Q3F22 Q4F22 Q1F23 Q2F23 Q3F23 Q4F23 Q1F24 Q2F24 Q2F22 Q3F22 Q4F22 Q1F23 Q2F23 Q3F23 Q4F23 Q1F24
Slide 19: Last Mile Mobility
LAST MILE MOBILITY Highest ever E-3Ws volumes1 at 18.6k in Q2 F24 Market Leadership in E-3W with 63.0% MS in H1 F24 Sales Volume1 27,439 Big Opportunity for electrification in 3W segment 22,619 23,131 22,945 21,459 8,878 ▪ EV penetration in L5 category2 is ~10.5% in Q2 F24 (~7.2%, Q2F23) 8,476 8,285
Slide 20: Auto Conso Financials Q2 F24
AUTO CONSO FINANCIALS Q2 F24 Rs cr. Revenue PBIT 20% 64% 18,869 15,685 1,431 875 Q2 F23 Q2 F24 Q2 F23 Q2 F24 20 PBIT is net of intercompany eliminations, stock reserve and after share of profit from JV/ Associates
Slide 21: Auto Margin Improvement Continues
AUTO MARGIN IMPROVEMENT CONTINUES Auto Standalone PBIT% 7.5% 7.5% 7.9% 6.6% 7.1% 5.3% 5.9% F19 Q1 F23 Q2 F23 Q3 F23 Q4 F23 Q1 F24 Q2 F24 Q2 F24 PBIT excludes Rs 210 cr. on account of sale of business / assets to MLMML Auto Standalone Segment includes Spares business and manufacturing of Two-Wheelers
Slide 22: Farm Equipment
FARM EQUIPMENT TRANSFORM FARMING ENRICH LIVES
Slide 23: Q2: Farm
Q2: FARM M&M VOLUMES 89K 3.8% YoY Industry down by 5.6% YoY MARKET LEADERSHIP 41.6% 150 bps YoY 23 Market Share includes Gromax
Slide 24: Market Leadership
Q1 F19 MS includes Gromax Q2 F19 39.8% Q3 F19 Q4 F19 Q1 F20 Q2 F20 41.3% Q3 F20 Q4 F20 MARKET LEADERSHIP Q1 F21 Q2 F21 38.2% Q3 F21 Q4 F21 Q1 F22 FES Market Share Q2 F22 40.1% Q3 F22 Q4 F22 Q1 F23 Q2 F23 40.1% Q3 F23 Q4 F23 Q1 F24 Q2 F24 41.6% 24
Slide 25: Market Strategy
MARKET STRATEGY Q2 F24 MS 41.6% (1.5% YoY gain) H1 F24 MS 42.3% (0.8% YoY gain) Strengthening Product Portfolio Signage Change OJA Global Launch Swaraj Target - LWT National Launch – Naya Swaraj
Slide 26: Farm Machinery – Scaling Up for Quantum Growth
FARM MACHINERY – SCALING UP FOR QUANTUM GROWTH FM Revenue (Rs cr.)* 223 197 165 172 161 157 139 120 Q3 F22 Q4 F22 Q1 F23 Q2 F23 Q3 F23 Q4 F23 Q1 F24 Q2 F24 ▪ Revenue: Q2 F24 Rs 223 cr. (35% YoY Growth); H1 F24 Rs 420 cr. (29% YoY Growth) ▪ Market Share: No. 2 in Rotavators; 21.5% MS in H1 F24 (17.9%
Slide 27: Farm Conso Financials Q2 F24
FARM CONSO FINANCIALS Q2 F24 Rs cr. Revenue PBIT 3% 564 * 564 * -12% 8,140 8,373 1,188 1,047 Q2 F23 Q2 F24 Q2 F23 Q2 F24 Q2 F24 nos are after hyper inflation accounting for Turkey companies 27 *SEL investment reval. gains of Rs 564 cr. in Q2 F23 PBIT is net of intercompany eliminations, stock reserv
Slide 28: Farm Margins
FARM MARGINS Farm Standalone PBIT % Core Tractor* PBIT% 19.8% 18.7% 18.6% 17.5% 17.5% 17.3% 17.9% 17.5% 16.3% 16.3% 16.4% 16.9% 15.9% 16.0% F19 Q1 F23 Q2 F23 Q3 F23 Q4 F23 Q1 F24 Q2 F24 F19 Q1 F23 Q2 F23 Q3 F23 Q4 F23 Q1 F24 Q2 F24 ▪ 0.9% of one-time impact of OJA, Naya Swaraj & Target launches ▪ 0.
Slide 29: Stability in Volatility
STABILITY IN VOLATILITY Core Tractor PBIT % Industry Growth % 38.9% 26.9% 23.4% 19.8% 19.7% 20.8% 19.5% 18.2% 17.0% 16.9% 17.5% 17.3% 17.9% 18.6% 17.5% 10.5% 18.7% 8.0% 15.8% 4.8% -5.8% -1.9% -13.5% -9.9% -10.6% -25.7% F19 F20 F21 Q1F22 Q2F22 Q3F22 Q4F22 Q1F23 Q2F23 Q3F23 Q4F23 Q1F24 Q2F24 Core Trac
Slide 30: Financials
Financials Analyst Meet Manoj Bhat | 10 November 2023
Slide 31: Financial results: Q2 F24
Financial results: Q2 F24 STANDALONE M&M Rs cr. Revenue PAT 20% YTD 25,773 17% 79% YTD 22,105 3,452 67% 2,068 Q2 F23 Q2 F24 Q2 F23 Q2 F24 PAT vs PY Q2 67%, YTD 79% 31
Slide 32: Financial results: Q2 F24
Financial results: Q2 F24 CONSOLIDATED M&M Rs cr. Revenue PAT 17% YTD 15% 34,436 29,871 33%* YTD SEL 564 2,348 6%* reval gain 2,209* Q2 F23 Q2 F24 Q2 F23 Q2 F24 PAT vs PY (excl. SEL) Q2 6%, YTD 33% 32 * Excluding Swaraj Engines Ltd revaluation gain on stake increase with status change in Q2 F23
Slide 33: PAT excl. SEL reval gain: Q2 F24
PAT excl. SEL reval gain*: Q2 F24 CONSOLIDATED M&M Rs cr. Q2 F23 Q2 F24 Q2 F23 to Q2 F24 Auto 513 1,015 56 6% 307 2,348 Farm 856* 800 2,209* 502 Services 840 533 TechM 363 139 MMFSL 256 146 Growth Gems & Invt 220 248 Total 2,209* 2,348 PAT (Q2 F23) AUTO FARM SERVICES PAT (Q2 F24) 33 * Excluding Swar
Slide 34: Cash flow: H1 F24
Cash flow: H1 F24 Rs cr.Rs cr. STANDALONE M&M + MEAL + LMM Co Auto Farm Services Total Rscr. Rs cr. Opening Balance@ 15,238 + Inflow 4,516 1,095 2,034 7,645 - Capex (1,944) (527) (2,471) - EV: MEAL + LMM Co net# (967) (967) : PE funds raised 900 900 - Investments (204) (20) 4 (220) Net cash generate
Slide 35: Thank You
Thank You 35