Analyst Conference
May 29, 2015
V S Parthasarathy
Group CFO
1
2
Key Theme
Economy: Global & Local
Mahindra’s resilience
Financial Performance
The Mahindra Way
Milestone & Achievement
-6
-4
-2
0
2
4
6
8
10
China India Russia Brazil South Africa
Emerging Market GDP Growth 2012 2013 2014 2015 2016 2017
Historical Forecast
Global Economy – Mixed signals
India – Stage is
ready
China – signs of
slowing down
-4
-3
-2
-1
0
1
2
3
4
US Japan UK Germany Italy France
Developed Market GDP Growth Historical Forecast
2012 20142013 201720162015
US - forecast are being revised
downwards; still growth is positive
Source: IMF, World Economic Outlook Database, April 2015
7%
India is the only country to have above 7% growth
World Financial Market - key action
Quantitative Easing -Divergent monetary path
Interest Rate Scenario -Push for growth
US discontinued QE
Japan & Europe have started
Fed likely to increase interest rates
India to decrease, Japan & Europe to continue lower rate
Interest Rate
Growth
3.7
5.6
3.9
0.4 0.5
2.8
-4.2
3.93.2 2.8
4.9
2.1
IIP (% Change Y-O-Y)
8.37.47.87.7
6.55.5
4.45.05.25.45.34.9
India Inflation (% Change Y-O-Y)
-1.3-1
-1.3
-2.3
-2.8 -2.7
-4.2-4.7
-1.7
CAD (% TO GDP)
8.007.75
7.50
Ju
n-1
4
Ju
l-14
Au
g-1
4
Sep
-14
Oct-
14
No
v-1
4
Dec-1
4
Jan
-15
Fe
b-1
5
Ma
r-15
Ap
r-15
Ma
y-1
5
Ju
n-1
5
Ju
l-15
India Interest Rate (%Change Y-O-Y)
0
50000
100000
150000
200000
250000
300000
350000
2012 2013 2014 2015
India's Infrastructure Budget(Rs Crores)
India on path, directed by government focus
Rating outlook changed from ‘Stable’ to ‘Positive’ by Moody’s
6
Make In India
Ease of doing business
Budget Long Term focused
GST roll-out
Incr. FDI limits
Coal & Mining reforms
Interest rate-cut
India on right path - Government focus
Direct Subsidy TransferJAM Trinity
External FrontSeveral Trade agreement
But…is the worst over?
• Is Lower Crude Prices sustainable?
• When shrinking inflation will translate to higher IIP?
• When we will see credit growth?
• Is the real effect of Fed action seen yet?
• Will the interest rate-cut by RBI reaches borrower?
• Rupee depreciation?
• Agri GDP?7
8
Rural economy affected…
Unseasonal and erratic rainfall
Lower increase in MSP
High interest cost for most of the F15
Lower increase in non-agri income
Auto volume with Rural concentration impacted
Tractor Q4 F15 was worst in last 40 quarters–30% de-growth
9
In difficult times, Mahindra has shown resilience
Financials Snapshots
Q4 FY 14
10,048
1,282
1,173
With full year impact of MTBL Merger
12.8%
Quarterly Performance – M&M + MVML Snapshot
Total Income
EBIDTA
PAT 50.0%
21.7%
9.2%
OPM
11
586
1,004
9,123
Q4 FY 15
11.0%
As presented to stock exchange
Exceptional & One time items(Rs. Crs)
12
Particular F14 Q4 F15 Q4 Diff
MTBD merger 298 (298)
Sale of Shares 53 37 (16)
One time items (Post-tax) - (68) (68)
Total impact 351 (31) (382)
Q4 FY 14
10,048
1,282
823
With full year impact of MTBL Merger
12.8%
Quarterly Performance – M&M + MVML Snapshot
Total Income
EBIDTA
PAT 25.0%
16.3%
9.2%
OPM
13
617
1,073
9,123
Q4 FY 15
11.8%
Adjusted for one time & Exceptional Items
Demonstrated Resilience(Rs. Crs)
14
M&M + MVML (Standalone)
Resilient & agile to face difficult situation….
Net Revenue
EBIDTA
OPM %
PAT
2,519 2,950
39 339
1.5% 11.5%
1 405
AD Volumes 39025 50879
Q3 F2009 Vs F2008
FES Volumes 22191 26318
(14.6%)
(88.6%)
(99.7%)
(23.3%)
(15.7%)
9,123 10,048
1,073 1,282
11.8% 12.8%
617 823
1,23,169 1,36,478
Q4 F2015 Vs F2014
38,761 55,438
Change
(9.2%)
(16.3%)
(25.0%)
(9.9%)
(30.1%)
Change
Note: Adjusted for one time items & exceptional items.
Segment Revenue & Results – Q4
15
Q4 F 15 6621
Q4 F 14 6890
% Inc/
(Dec)(3.9)
Q4 F 15 613
Q4 F 14 619
% Inc/
(Dec)(1.0)
AS
Segment Revenue
Segment Result
Q4 F 15 2535
Q4 F 14 3188
% Inc/
(Dec)(20.5)
Q4 F 15 322
Q4 F 14 544
% Inc/
(Dec)(40.8)
FES
Segment Revenue
Segment Result
(Adjusted for Exceptional & one time items)
Adjusted for exceptional & one time items
16
Margin of Safety Q4 F15 (%)
MOS37%
BEP63%
AD+MVML
MOS38%
BEP62%
FES
MOS35%
BEP65%
M&M+MVML
Yearly Performance – M&M + MVML Snapshot
Total Income
EBIDTA
PAT 3,423
4,603
37,468
FY 15 FY 14
38,817
5,248
3,905 12.3%
12.3%
3.5%
OPM 12.3% 13.5%
17
As presented to stock exchange
Performance Indicators
Particulars F – 2015 F – 2014
OPM (%) 12.3 13.5
ROCE 18.8 22.8
Interest Coverage Ratio 15.2 14.9
Debt / Service Ratio 2.4 5.7
EPS (Basic) (Rs.) 58.0 66.2
Book Value (Rs.) 335.92 293.26
18
19
Strong Growth Trajectory
Net Revenue PAT
8571,068 1,103
868
2,068
2,6872,997
3,6343,905
3,503
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
M&M + MVML (Standalone)
8,223 10,026 11,541 13,094
18,60423,564
31,370
38,356 38,817 37,468
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
EBITDA
9671,257 1,367
1,093
2,965
3,6214,150
5,329 5,248
4,603
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
(Rs. Crs)
20
20
DE Ratio
M&M + MVML
Gearing Multiple
M&M + MVML
Robust Financial Risk Profile
0.31
0.46
0.60
0.77
0.45
0.32 0.37
0.30 0.28 0.22
(0.14)
(0.02)
0.27 0.31
0.09
0.19 0.17
0.09
0.01 0.03
F06 F07 F08 F09 F10 F11 F12 F13 F14 F15
Gross Net
0.79
1.06
1.66
2.79
1.06
0.82 0.98
0.76 0.83 0.82
F06 F07 F08 F09 F10 F11 F12 F13 F14 F15
21
29th May 2014 7th August 2014
8th September 2014 29th September 2014
Resilience in earnings despite cyclical
upturns/downturns
22
Market leader in India, with 33% market share*
World’s largest tractor company by units sold;
Market leader in India for >30 years with 41% share*
Largest rural NBFC in India
AUTOMOTIVE
FARM
FINANCE
HOLIDAYS India’s No.1 Vacation Ownership company
IT Top 5 IT service provider from India
PRE-OWNED CARS India’s largest multi-brand, pre-owned car company
We are leaders in most of our businesses
* Sep2014
We also demonstrated leadership resilienceContinued leadership
23Copyright © 2013 Mahindra & Mahindra Ltd. All rights reserved. 23
F-2015
Consolidated Result
Rs. 5,154 crs
Rs. 3,382 crs
34%
Financial Highlights
Total income
Rs. 78,736 crs
Rs. 76,015 crs
4%
M&M Consolidated – FY 15 Vs FY 14
Rs. 7,843 crs
Rs. 6,150 crs
22%
EBIDTA PAT before MI
24
Consolidated Segment Report
25
44875
43349
35000
37000
39000
41000
43000
45000
47000
2358
1319
1000
1500
2000
2500
1688415929
10000
11000
12000
13000
14000
15000
16000
17000
18000
2480
1968
1000
1500
2000
2500
3000
Farm Equipment
5306
6053
3000
4000
5000
6000
7000
14611394
500
1000
1500
2000
Segment Revenue
Segment Result
Automotive
FY14 FY15 FY14 FY15
Financial Service
FY14 FY15
FY14 FY15 FY14 FY15 FY14 FY15
-3% -6% 14%
-44% -21% -5%
26
817 812
500
1000
121
92
50
100
150
722
1110
200
500
800
1100
1400
161
448
100
200
300
400
500
IDS
1298 1320
500
1000
1500
95
105
50
70
90
110
Hospitality
FY14 FY15 FY14 FY15
Steel Trading
FY14 FY15
FY14 FY15 FY14 FY15 FY14 FY15
-1% 54% 2%
-24% 179% 11%
Segment Revenue
Segment Result
27
Segment Revenue
Segment Result
28
-27
-114
10
40
70
100
3812
1029
0
1000
2000
3000
4000
5000
Systech
FY14 FY15
FY14 FY15
-73%
-324%
30
45
0
50
FY14 FY15
292 353
0
300
600
900
1200
1500
IT Services
FY14 FY15
21%
49%
Others
-503
-618
100
200
300
400
500
600
700
-23%
FY14 FY15
3208
3914
2000
2500
3000
3500
4000
4500
22%
FY14 FY15
Listed companies performance - PAT
F15 – Rs.913 crs
F14 – Rs.954 crs
F15 – Rs 266 crs
F14 – Rs 101 crs
F15 – Rs. 2,628 crs
F14 – Rs. 2,682 crs
F15 – Rs.95 crs
F14 – Rs.87 crs
29
PAT before EI PAT before EI
Other unlisted companies growing in strength..
Last 3 years PAT…. CAGR
Mahindra Integrated Township 88%
Mahindra World City Jaipur 51%
Mahindra South Africa 66%
Mahindra Logistics Limited 30%
Mahindra Rural Hosing Finance 47%
30
31
356.5
228.2 182.5 161.9 127.9
87.2 133.1
65.2 114.1
36.4
335.7
52.8 90.6
-120.8
99.6 38.4 187.0 128.4
170.1
F 2015F 2014F 2013F 2012F 2011F 2010F 2009F 2008F 2007F 2006
Value from group companies
Fruits at regular interval
Dividend
Bonus & Split from TechM
32
Invested in small cap…now they are blue chip
Tech Mahindra
165
2644
Investment Current Value
MMFSL
25
1,211
Investment Current Value
Mahindra Holidays
4.4
281
Investment Current Value
Mahindra Lifespaces
45.4
160
Investment Current Value
$ Mil
Mahindra CIE
87
232
Investment Current Value
Ssangyong
350
838
Investment Current Value
Market Price as on 31st March 2015
Convenience rate assumed $ = Rs 61
33
Value Creation
Group Market Cap (Rs Cr)
1434 6583
168353
F1995 F2005 F2015
•Prices as on 31ST March
Market Cap* (31st Mar15) Rs Crs
Mahindra & Mahindra 73,773
Tech Mahindra 60,492
MMFSL 14,441
Ssangyong 6,995
Mahindra Holidays 2,289
Mahindra Lifespaces 1,923
Swaraj Engines 1,004
Mahindra CIE 6,987
EPC Industries 447
Total 1,68,353$ 27.6bn
34
We are federation of businesses…
10 different business sector run by Independent President / Group President
Independence to Board of Director, strategy formation & execution
Group role is to Review, Challenge & Recommend - MAPC
Listed co. to raise the money own their own – PE, Borrow, Rights etc.
Federation enables liberations - leadership, bandwidth and financial return
It enables huge growth in individual businesses
Federation is to Enable – Enhance – Engender (3E)
It enables Innovation & Entrepreneurship
Federation is Synergy without bureaucracy
35
CORE PURPOSE
AC
CE
PT
ING
NO
LIM
ITS
ALT
ER
NA
TIV
E
TH
IHN
KIN
G
DR
IVIN
G P
OS
ITIV
E
CH
AN
GE
CORE VALUES
What unites us…
Code of Conduct
Corporate Governance Policy
Corporate Social Responsibility
Golden Peacock Award for Corporate Governance
Core Purpose & Rise Philosophy Focus on Governance
3.03
7.40
56.53
0.00 10.00 20.00 30.00 40.00 50.00 60.00
Gold
Sensex
M&M
Last 5 years
2.18
1.60
1.06
Last 11 years
10.22
5.00
2.78
Last 21 years
As at 31st March 2015
Result speaks
$/Oz
36
Returns in No. of times & CAGR %
21%
10%
5%
24%
16%
10%
17%
10%
1%
37
Awards & Accolades
India's Best Boards BY The Economic Times - Hay Group survey 2014
India's Best companies for CSR 2014 – 3rd Ranked at by The Economic Times
Best Place to Work –No. 2 in India’s Best Manufacturing Companies
Top Companies for Leaders 2014 Ranked No. 10 worldwide and No. 3 in India
Mahindra Insurance Brokers Ltd. declared
“Broker of the Year”at 18th Asia Insurance Industry Awards 2014
Mahindra Reva bags prestigious Manufacturing Today Award 2014
Excellence in Technology
Mahindra Logistics wins the '3PL Company of the Year - Automotive' Award
"No stars gleam as brightly as those which
glisten in the polar sky. No water tastes so
sweet as that which springs amid the desert
sand. And no faith is so precious as that which
lives and triumphs through adversity“
- Charles H Spurgeon
38
Thank You