Initiating coverage Mahindra & Mahindra ltd

Mahindra & Mahindra

BUY

- 1 of 26 - Friday 20th April, 2012

This document is for private circulation, and must be read in conjunction with the disclaimer on the last page.

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Target Price `975 CMP `727 FY14 PE 14.1x

Index Details We initiate coverage on Mahindra & Mahindra Ltd (M&M) as a BUY with a Price Objective of `975. At CMP of `727, the stock is trading at 16.2x and 14.1x its estimated earnings for FY13 & FY14 respectively, representing a potential upside of ~34% over a period of 15 months. UV sales (XUV500 and Xylo) and LCVs (Maximmo, Genio and Gio) are expected to be the key drivers of growth, while the tractor business is expected to weather the cyclical downturn and experience moderate traction. In addition the tangible benefits of the Ssangyong acquisition would be felt over the medium term as the joint R&D efforts and new product launches materialize. We forecast revenues and earnings to grow at a CAGR of 15.6% and 10.7% to `40,062.3 and `3,169.7 crore, respectively over FY12-14.

XUV 500 and refurbished Xylo to sustain volume growth in the UV segment

After having witnessed a CAGR of 23% over FY09-12, M&M UV sales are expected to moderate going ahead on account of new launches by competitors, rising fuel prices and higher interest rates. We expect M&M UV sales to post a CAGR of 13.2% over FY12-14 to ~2,60,000 units led by capacity ramp up of XUV 500 and strong demand for its existing products.

Weathering the cyclical downturn in tractor sales

The tractor industry being cyclical in nature has been witnessing a downturn since November 2011, after posting robust growth in the preceding two years. We expect this moderation in growth to continue in the near term led by a host of new capacity additions which will affect pricing power, expectation of an unfavorable monsoon and rising interest rates, which would affect serviceability of tractor loans.

However, favorable factors like increasing budgetary allocation towards the rural sector, rising non-farm usage, higher MSP among others are likely to partially offset the downturn. While CMIE expects the volumes to grow by 8% for the entire industry, we are less optimistic and expect much lower growth of ~6%. However, southern India which is under penetrated is expected to grow much faster than the industry growth. On the back drop of its new facility of 1,00,000 units p.a. being commissioned at Zaheerabad in Karnataka, we expect M&M the market leader to grow faster than the industry.

Sensex 17,374

Nifty 5,291

BSE 100 9,176

Industry Car & UV’s

Scrip Details

Mkt Cap (` cr) 44,614

BVPS (`) 168.0

O/s Shares (Cr) 61.4

Avg Vol (Lacs) 1.2

52 Week H/L 875/617

Div Yield (%) 1.9

FVPS (`) 5.0

Shareholding Pattern

Shareholders %

Promoters 25.3

DIIs 20.7

FIIs 26.5

Public 27.5

Total 100

M&M vs. Sensex

Key Financials (` in Cr)

Y/E Mar Net

Revenue EBITDA PAT EPS

EPS Growth (%)

RONW (%)

ROCE (%)

P/E (X) EV/

EBITDA(X)

2011 23493.7 3431.3 2662.1 43.4 - 25.8 31.5 16.8 13.5

2012E 29973.7 3648.7 2584.7 42.1 -2.9 21.4 26.7 17.3 12.7

2013E 34926.3 4008.6 2763.6 45.0 6.9 19.7 25.5 16.2 11.6

2014E 40062.3 4662.2 3169.7 51.6 14.7 19.3 25.8 14.1 9.9

- 2 of 26 - Friday 20th

April, 2012


We expect M&M (market leader with a share of ~40%) to post a CAGR of 7.5% over FY12-14 to reach ~2,72,000 units by FY14 and consequently revenues from this segment are expected to reach ~`11,500 crore by FY14 (CAGR of 8.6%). However, we expect significant pressure on margins led by higher raw material costs and lack of pricing power given the large capacity expansions across the industry.

LCV growth momentum to continue

Despite being a late entrant in the commercial vehicles (CV) market, M&M has carved for itself an enviable market share of ~30% in a relatively short span of time. Although the growth in the LCV markets is expected to tone down to a CAGR of 14% (from a 3 year CAGR of 32.9% over FY09-11), we expect M&M to outperform the industry and clock a volume growth of CAGR 17% over the next two years. The key drivers of growth are the increasing demand for transportation of consumer goods within cities and migration from three wheelers to nouveau products. Accordingly, we expect volumes from this segment to reach 2,10,000 units by FY14 on the back of strong showing from its portfolio brands – Maximmo, Genio and Gio.

Ssangyong on the growth path; but profitability still a while away

Post the acquisition of Ssangyong (`2,100 crore) in 2011, M&M has emerged as a

global SUV player with a presence across 98 countries with 1200 dealerships. The acquisition will give M&M access to Ssangyongs’ technology and distribution network; whereas economies of scale resulting from combined sourcing will benefit both the firms. Currently, Ssangyong is experiencing losses and we believe, Ssangyong will not achieve a break even in the near term despite significant volume ramp up.

Other business yet to prove their mettle

Other than its core business, M&M has ventured into an array of new business segments – Two Wheelers, Commercial Vehicles, Defense goods and Aerospace among others. We expect the commercial vehicle arm – Mahindra Navistar and the defence business to contribute fairly to the group led by the growing opportunities in these businesses. However, from the other businesses, like Two Wheelers and Aerospace, we expect the performance to be muted.


April, 2012


Valuation

We initiate coverage on Mahindra & Mahindra as a BUY with a sum of the parts (SOTP) valuation based price objective of `970 representing a potential upside of 33% from the CMP of `727. We have valued the standalone business at a P/E multiple of

13 on account of its leadership position in its core segments (Tractors and UV’s) while the subsidiaries have been valued on their respective P/E multiples and we have assigned a 30% holding company discount. While we have valued the profitable unlisted arm of M&M i.e. Mahindra Vehicle Manufacturers Ltd at P/E multiple of 10, the other non profitable businesses have been valued as shown in the table below. Also, we have not valued the defence business and Mahindra Reva Electric Vehicles Ltd as these businesses are in their nascent stage, but could add significant value to the group in the future. SOTP Valuation Assumptions

Company FY14 EPS Multiple Measure M&M's stakeHolding Co

Disc

Value per

share

Mahindra & Mahindra 51.6 13 P/E 670.8

Mahindra Financial Services Ltd 79.9* 2 P/B 56.0% 30% 62.7

Mahindra Lifespaces Ltd 3.0 6 P/E 51.0% 30% 6.4

Tech Mahindra 30.0 11.5 P/E 47.6% 30% 115.0

Mahindra Holidays 2.0 18 P/E 83.1% 30% 20.8

Mahindra Forgings 1.1 8 P/E 53.0% 30% 3.3

Mahindra Ugine 4.9** 2 EV/EBITDA 51.0% 30% 3.5

MVML 7.7 10 P/E 100.0% - 77.1

Mahindra Two Wheelers Ltd -2.7 100.0% - -12.4***

Mahindra Navistar Ltd 0.0

Total Domestic Business 947.2

CompanyMarket Cap

(Rs in crore)M&M's stake

Holding Co

Disc

Value per

share

Ssangyong Motor Company 3338.0 70.0% 60% 22.8

Total 970.0

Listed Entities

Unlisted Entitites

International Business

*Book Value, **Enterprise Value, ***Accumulated Loss per share


April, 2012


Company Background

Established in 1945, Mahindra and Mahindra (M&M), the flagship company of Mahindra group, has emerged as a leading player in the farm equipment and utility vehicles segment. Additionally, it has a presence in agribusiness, aerospace, components, consulting services, defense, energy, financial services, industrial equipment, logistics, real estate, retail, steel, and two wheelers. With the recent acquisition of Ssangyong Motor Company it has marked its foray in the international SUV market.

Mahindra Group – Overview

Mahindra and Mahindra

(Rs. 23,493 crore; 64%)

Utility

Vehicle Bolero, XUV500, Xylo,

Scorpio, Thar and Verito

Alfa, Gio, Bolero Maxi

truck, Genio and Maxximo

Arjun, Bhoomiputra,

Sarpanch, Shaan, and

Yuvraj

Commercial

vehicle

Tractors

Automotive

Sectors

Other business

(Rs. 2,613 crore; 7%)

Aircraft, Fighter Aircraft, and Lockheed-Martin

F-35

Axe, Marksman, Mine protected vehicle,

Rakshak, and Sea mines and Torpedo Decoy

Rexton ,Korando, Chairman W, Kryon, Actyon,

Rodius

Aerospace

Defense

Ssangyong

(70%)*

Mahindra Two

Wheelers LtdRodeo, Flyte, Duro and Stallio

Mahindra

Navistar LtdLCV’s and M&HCV’s

Mahindra & Mahindra Financial

Services Ltd. (56%)*

(Rs. 2,043 crore. 5.5%)

Mahindra & Mahindra Financial

Services Ltd. (56%)*

(Rs. 2,043 crore. 5.5%)

Mahindra Holidays & Resorts

India Ltd. (83.1%)*

(Rs. 500 crore; 1.4%)

Mahindra Forgings (53%)*

(Rs. 1,918 crore, 5.2%)

Mahindra Ugine (51%)*

(Rs. 522 crore, 1.4%)

42.7% stake in Mahindra Satyam

Tech Mahindra Ltd (47.6%)*

(Rs. 5,140.2 crore; 14%)

Source: M&M, Figures in ()* indicate the parent holding in the subsidiaries


April, 2012


XUV 500 and refurbished Xylo to sustain volume growth in the UV segment

After having witnessed a CAGR of 23% over FY09-12, M&M UV sales are expected to moderate going ahead on account of new launches by competitors, rising fuel prices and higher interest rates. We expect M&M UV sales to post a CAGR of 13.2% over FY12-14 to ~2,60,000 units led by capacity ramp up of XUV 500 and strong demand for its existing products.

UV Industry to regain momentum

After having experienced fiery growth of over 20% CAGR over the period 2009-11, the MUV industry has seen a brief slow down due to the impact of high interest rates. As per CMIE, the industry is expected to regain momentum and grow at a CAGR of 14% over the next couple of years despite the rising fuel cost, potential withdrawal of diesel

subsidy and interest rates remaining firm over the medium term.

M&Ms UV sales to grow in line with that of the industry

Although M&M’s growth has outperformed UV industry growth in the past, we do not expect the outperformance to continue going forward as it already has a dominant market share of 56% and competition is undertaking aggressive launches. Although the refurbished Xylo and XUV 500 are expected to take competition head on, we still expect a slight dip in the market share going forward. Thus, we expect volumes to post a CAGR of 13.2% over FY12-14 and reach ~2,60,000 units by FY14 from the current 2,02,000 units led by XUV 500 capacity ramp up and robust demand for Xylo.

UV Industry –Volume and Growth UV Industry - Monthly Volume and Growth

0%

5%

10%

15%

20%

25%

0

50000

100000

150000

200000

250000

300000

350000

400000

450000

500000

UV Growth RHS(%)

0%

10%

20%

30%

40%

50%

60%

70%

0

5000

10000

15000

20000

25000

30000

35000

40000

UV Growth RHS(%)

Source: M&M, IAS, Ventura Research Estimates



April, 2012


Refurbished Xylo and XUV 500 to be the stalwarts of the growth

story

M&M’s recently launched XUV 500, a premium SUV has received a favorable response in the markets - indicated by the 9,000 bookings received within 10 days of launch. XUV 500 competes with the higher end products in the segment and its lower pricing point has done wonders for the company. M&M is in the process of ramping up capacity for the vehicle to 3,000 units from the current 2,500 units to meet the growing demand. Also, the recently launched refurbished Xylo has evoked a positive response from the consumers. We expect these products to drive volume growth for the company in the near term and keep the portfolio invigorated.

M&M UV – Volume and Growth M&M UV - Monthly Volume and Growth

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0

50000

100000

150000

200000

250000

300000

M&M Growth RHS(%)

0%

10%

20%

30%

40%

50%

60%

70%

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

M&M Growth RHS (%)

Source: M&M, Ventura Research Estimates


Market share of various UV players

M&M56%Toyota

Motor18%

Tata Motor12%

General Motor

7%

Others7%



April, 2012


M&MUV portfolio vis-à-vis competition

Weathering the cyclical downturn in tractor sales

The tractor industry being cyclical in nature has been witnessing a downturn since November 2011, after posting robust growth in the preceding two years. We expect this moderation in growth to continue in the near term led by a host of new capacity additions which will affect pricing power, expectation of an unfavorable monsoon and rising interest rates which would affect serviceability of tractor loans.

However, favorable factors like increasing budgetary allocation towards the rural sector, rising non - farm usage, higher MSP among others are likely to partially offset the downturn. While CMIE expects the volumes to grow by 8% for the entire industry, we are less optimistic and expect much lower growth of ~6%. However, southern India which is under penetrated is expected to grow much faster than the industry growth. On the back drop of its new facility of 1,00,000 units p.a being commissioned at Zaheerabad in Karnataka, we expect M&M the market leader to grow faster than the industry.

We expect M&M (market leader with a share of ~40%) to post a CAGR of 7.5% over FY12-14 to reach ~2,72,000 units by FY14 and consequently revenues from this segment are expected to reach ~`11,500 crore by FY14. (CAGR of 8.6%). However,

we expect significant pressure on margins led by higher raw material costs and lack of pricing power given the large capacity expansions across the industry.

Company 6l - 7l 7l - 10l 10l - 14l >14l

M&M Bolero (11 variants) Scorpio (12 variants) Scorpio (9 variants) Ssangyong Rexton*

Xylo (10 variants) XUV 500 (3 variants) Ssangyong Korando*

GM Tavera (11 variants) Captiva (3 variants)

Tata Motors Sumo (7 variants) Safari (5 variants) Aria (4 variants) Aria (6 variants)

Safari Storme* Safari (7 variants)

Toyota Innova (8 variants) Innova (7 variants) Fortuner (3 variants)

Avanza*

Maruti Ertiga*

Ford Eco Sport* Foocus 2WD* Endeavour (4 variants)

Price Range

Source: M&M, Ventura Research Estimates. *Upcoming Launches


April, 2012


Tractor sales enter a cyclical downtrend

Tractor sales are typically cyclical in nature and after having experienced good growth over FY10-FY11, they have shown a marked deceleration since November’11. We expect the cyclical downturn in tractor sales to continue for at least another two years given the huge capacity additions, expectation of a poor monsoon (based on global weather model forecasts) and persistent high interest rates. However scarcity of farm labour (in light of alternate employment opportunities), increasing budgetary allocation towards the rural sector, government support for farm mechanization and increasing non-farm usage are expected to be favorable factors which can to a certain extent negate the cyclical downturn.

We expect tractor sales to witness CAGR of 6% over the next couple of years. However, aided by capacity expansion and leadership position we forecast M&M’s tractor sales to grow at CAGR of 7.5% over the medium term.

Tractor Industry –Volume and Growth Tractor Industry - Monthly Volume and Growth

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

0

100000

200000

300000

400000

500000

600000

700000

800000

Tractors Growht RHS(%)es

0%

10%

20%

30%

40%

50%

60%

0

10000

20000

30000

40000

50000

60000

70000

80000

Tractors Growth RHS (%)



Tractor Industry Volumes and growth

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

0

100000

200000

300000

400000

500000

600000

700000

800000

Tractors Growth (RHS)

Cyclical Downturn

Source: IAS, M&M, Ventura Research Estimates


April, 2012


Demand for tractors in the high and low HP category is encouraging

The Indian tractor industry has traditionally been a medium HP market comprising of the 31-40 HP range of tractors. However, since early 2010, the industry witnessed significant traction from the higher and lower HP segments. The key drivers for high HP tractors have been increasing demand from the under penetrated south Indian market, replacement demand from the northern region, increasing use in non-agricultural applications and growth in exports.

In addition to the easy finance availability, farm labour shortages and rising costs of bullocks has led to robust growth in the low HP segment (21-30 HP) amongst small and marginal farmers. This segment has historically been the domain of the unorganized sector, but with the entry of players like M&M and VST Tillers, the share of the organized sector is only expected to grow. Thus, M&M being the largest player in this space is expected to be the biggest beneficiary.

M&M Tractors – Volume and Growth M&M Tractors - Monthly Volume and Growth

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0

50000

100000

150000

200000

250000

300000

M&M Growht RHS(%)

es

0%

10%

20%

30%

40%

50%

60%

0

10000

20000

30000

40000

50000

60000

70000

80000

Tractors Growth RHS (%)



Tractor market mix Growth in various segments of tractor industry

0

100000

200000

300000

400000

500000

600000

FY07 FY08 FY09 FY10 FY11

21-30 HP 31-40 HP 41-50 HP 51 HP & Above

es

es=

-20%

-10%

0%

10%

20%

30%

40%

50%

FY07 FY08 FY09 FY10 FY11

21-30 HP 31-40 HP 41-50 HP 51 HP & Above




April, 2012


M&M tractor portfolio vis-à-vis competition

Zaheerabad capacity expansion one amongst many planned by the industry

M&M is setting up a tractor manufacturing facility at Zaheerabad, Karnataka to raise the capacity of its tractors by 1,00,000 units to cater to the fast growing under penetrated market of south India. The facility entailing an investment of `300 crore is

expected to be commissioned by H2FY13.

Overall the industry capacity is expected to grow to 10.7 lakhs by March 2013 which is faster than the demand growth and hence we expect the pricing also to come under pressure impacting margins.

Company <20HP 21-30 HP 31-40HP 41-50 HP >51 HP

M&M

Arjun 1 variant 2 variants

Sarpanch 1 variant 1 variant 3 variants 1 variant

Bhoomiputra 1 variant 3 variants 1 variant

Shaan 1 variant

Yuvraj 1 variant

Tafe + EIC

Tafe 1 variant 1 variant

Eicher 3 variants 3 variants 4 variants

Massey ferguson 1 variant 2 variants 6 variants 2 variants

Escorts

Escorts 2 variants

Farmtrac 6 variants

Powertrac 5 variants

Product mix of various tractor players Market share of various tractor players

0%

20%

40%

60%

80%

100%

Escorts Tractors Inter.

M&M Tractors & Farm Equi.

John Deere

21-30 HP 31-40 HP 41-50 HP > 51 HP

es

s

JD8%

FNH5%

Others3%

Sonalika8%

Escorts11%

TAFE+EIC23%

M&M42%





April, 2012


New capacity additions in the industry

Union Budget 2012-13: What is in it for Indian Agriculture??? To fast track the growth of agriculture, total plan outlay for the

Department of Agriculture and Co-operation has been increased by 18% i.e. from `17,123 crore in 2011-2012 to `20,208 crore in 2012-13.

Outlay for Rashtriya Krishi Vikas Yojana (RKVY) increased to `9,217

crore in 2012-13 from `7,860 crore in 2011-12.

With the initiative of Bringing Green Revolution to Eastern India (BGREI) to boost the production and productivity of paddy field. Allocation for the scheme increased to `1,000 crore in 2012-13 from

`400 crore in 2011-12.

Allocation of Rs.300 crore is made for VIIDP (Vidarbha Intensified Irrigation Development Programme) under RKVY.

Targeted credit for agriculture has been elevated by `1,00,000 crore to

`5,75,000 crore in 2012-13.

Interest subvention scheme of 3% for prompt paying farmers has been introduced.

Kisan Credit Card (KCC) Scheme has been modified with KCC smart card, which can also be used at ATMs.

Structural changes in Accelerated Irrigation Benefit Programme (AIBP) increased by 13% to `14,242 crore in 2012-13

Company/Project/Locations Capacity in FY11

New capacities

commisioned in

FY12

Capacity to be

commisioned in

FY13

Total Expected

capacity by FY13Cost (Rs.Cr) Compl.by

Same Deutz-Fahr India Pvt. Ltd. 11,000 - 9,000 20,000 25.0 June-12

Ranipet, Vellore, Tamil Nadu

Mahindra & Mahindra Ltd. 256,000 - 100,000 356000 300.0 July-12

Zaheerabad, Andhra Pradesh

John Deere India Pvt. Ltd. 109,000 - 50,000 159000 90.7 September-12

Maharashtra and M.P

V S T Tillers Tractors Ltd. 30,000 - 30,000 60000 100.0 December-12

Hosur, Dharmapuri, Tamil Nadu

Escorts Ltd. 98,940 25,000 50,000 173,940 March-13

New Holland Fiat (India) Pvt. Ltd 36,000 - 30,000 66000 221.0 December-13

Ghaziabad, Uttar Pradesh

Rajkot Tractors 148,100 12,000 - 160,100

Rajkot

ITL 30,000 20,000 25,000 75,000

Hoshiyarpur

Total 719,040 57,000 294,000 1,070,040 Source: IAS, ICRA, M&M, Ventura Research Estimates


April, 2012


Tractor Exports and International business

Tractor exports account for 10% of the total tractor volumes. After posting a CAGR of 16.8% over FY07-11 tractors exports witnessed a growth of 14.8% YTD in FY12. Although, Nepal, Bangladesh, Sri Lanka and the United States remain major export destinations, African and new South-East Asian markets are expected to drive exports over the medium-to-long term. Export to neighboring countries such as Thailand, Malaysia and Indonesia which are supported by the Asian Free Trade Agreement are expected to augur well for growth going ahead. Although, exports do not contribute significantly to the total volumes we expect them to partially offset the cyclical downturn being witnessed in the domestic tractor market. M&M’s tractor presence is in over 40 countries. In addition to exports, M&M has three major subsidiaries in USA-Mahindra USA, China- Mahindra (China) Tractor Company, and Mahindra Yueda (Yancheng) Tractor Company (a joint venture with the Jiangsu Yueda Group).

LCV growth momentum to continue

Despite being a late entrant in the commercial vehicles (CV) market, M&M has carved for itself an enviable market share of ~30% in a relatively short span of time. Although the growth in the LCV markets is expected to tone down to a CAGR of 14% (from a 3 year CAGR of 32.9% over FY09-11), we expect M&M to outperform the industry and clock a volume growth of CAGR 17% over the next two years. The key drivers of growth are the increasing demand for transportation of consumer goods within cities and migration from three wheelers to nouveau products. Accordingly, we expect volumes from this segment to reach 2,10,000 units by FY14 on the back of strong showing from its portfolio brands – Maximmo, Genio and Gio.

M&M LCV’s – Volume and Growth Market share of various LCV players

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0

50000

100000

150000

200000

250000

FY11 FY12E FY13E FY14E

M&M growth % (RHS)

es

Tata Motors

58%

M&M28%

Others9%

Force Motors

5%

es




April, 2012


M&M LCV portfolio vis-à-vis competition

International business scaling up well on the back of recent acquisitions with Ssangyong

Prior to M&M’s take over, Ssangyong had always been in financial trouble due to frequent changes in its ownership and underinvestment which lead to the lack of product development and consequent downturn in its business. However, after M&M took a 70% stake in the entity for `2100 crore (`1675 crore of equity and `425 crore of

corporate bonds) the business has experienced a turnaround with volumes expanding and losses diminishing.

We believe that the Ssangyong acquisition will benefit M&M immensely from access to Ssangyong’s technology, presence in 98 countries and its distribution network of 1200 dealerships. On the other hand, economies of scale resulting from combined sourcing will be advantageous to both the firms.

M&M – Ssangyong have zeroed upon a combined future product portfolio strategy which will see the launch of 3 new platforms and 4 new products (a sedan, a mid-sized SUV and two compact SUV’s,) over the next 5 years. To offset the impact of slowdown in the developed markets, Ssangyong is focusing on emerging economies like China, India, Africa and Latin America. M&M is also looking forward to launch Ssangyong’s two premium SUV models – Rexton SUV and Korando crossover in the Indian markets in H2FY13.

Ssangyong is targeting sales of 1,60,000 units in CY2013 and expects to double the volumes to 3,00,000 units by 2016. Despite, the volume growth we do not expect the company to achieve a break even in the near term.

M&M Ashok Leyland Force Motors

ProductsGio, Maximmo,

GenioApe Truck Ape Mini Dost

Trump 15,

Trump 40Ace, Ace Zip, Magic Super Ace

Capacity (in tonnes) 0.5/0.8/1.2 0.8 0.5 1.25 0.8/ 1.1 1/0.5 1.2

Price 3 lacs/5 lacs 2.25 1.75 3.6-4.7 lacs 2.7-3 lacs 3 lacs/1.9 lacs 3.7 lacs

Tata MotorsPiaggio


Ssangyong sales trend

-100.0%

-50.0%

0.0%

50.0%

100.0%

150.0%

0

20000

40000

60000

80000

100000

120000

140000

160000

CY03 CY04 CY05 CY06 CY07 CY08 CY09 CY10 CY11

Domestic Exports Growth (RHS)

Source: M&M, Bloomberg, Ventura Research Estimates


April, 2012


Other business yet to prove their mettle

Other than its core business, M&M has ventured into an array of new business segments – Two Wheelers, Commercial Vehicles, Defense goods and Aerospace among others. We expect the commercial vehicle arm – Mahindra Navistar and the defence business to contribute fairly to the group led by the growing opportunities in these businesses. However, from the other businesses, like Two Wheelers and Aerospace, we expect the performance to be muted.

Two wheelers to show muted growth

The financial performance of Mahindra Two Wheelers Ltd has not been satisfactory and is suffering from operating losses since the commencement of operations. Given the lack of volume growth (de-growth of 15% yoy in YTD FY12) due to strong competition from other well established players, and negative cash flows, we don’t expect Mahindra Two Wheelers to breakeven in the near term.

M&M made its foray in the two wheeler segment following the acquisition of business assets of Kinetic Motor Company in late 2008 with the launch of Mahindra Rodeo, Duro and Flyte. M&M has been able to gain 7.5% market share in the scooter segment despite strong competition from existing players like Honda Motors & Scooters India and TVS However, its foray in the motorcycle segment with the launch of Mahindra’s Stallio was short lived as it met with a technical problem and had to be discontinued. It is now going to re launch Stallio in the markets in mid 2012.

Mahindra Vehicle Manufacturers Ltd

Mahindra Vehicle Manufacturers Limited, a fully owned subsidiary of M&M is a manufacturing arm of M&M which manufactures LCV’s for M&M and M&HCV’s for Mahindra Navistar Auto Ltd. We expect increasing production from MVML going ahead as demand for LCV’s is expected to remain strong in the medium term. We expect the earnings from MVML to add value to the group as a whole.

M&HCV on the growth track

Mahindra Navistar Auto Ltd (51:49 JV between M&M and Navistar) manufactures HCV’s in the range of 25, 31, and 40 tonnes. It currently sells 300 trucks per month at its Chakan manufacturing facility which has a capacity to produce 50,000 trucks per annum. MNAL plans to launch at least two new models—a 49-tonne tractor trailer and a 25-tonne tipper for the mining sector in the second half of FY2012. These new product launches along with the launch of additional variants, will help MNAL achieve full capacity utilizations over the next three years. The JV is expected to breakeven by Q3FY13.


April, 2012


Mahindra Aerospace

Markings its foray in the aerospace business M&M acquired two Australian companies - Aerostaff Australia and Gippsland Aeronautics in 2009. AA supplies metal sheets and value added products to the Aerospace and Defense industry whereas GA develops and manufactures a family of 2-20 seat utility aircraft. With these acquisitions it is well poised to participate in the opportunities presented by India’s defense and civil aerospace market. It is also in the process of developing a state-of-the-art component manufacturing facility in Bangalore to focus on component and aero-structure assembly expertise in sheet metal, machining, and special processing.

Mahindra Reva

Through acquisition of a 55.2% controlling stake in the electric cars manufacturer Reva (re-christened as Mahindra Reva Electric Vehicle Pvt Ltd) M&M has got access to Reva's electric powertrain technology. Currently, the company has around 3,500 electrics vehicle on road and is looking at expanding its product to the UV, three- wheeler and mini –trucks segment.

Reva plans to sell 30,000 cars in the next 3 years aided by the national mission plan for hybrid and electric vehicles. Currently, Mahindra Reva has its manufacturing facility in Bangalore and is setting up its second unit at the same place. It is also looking for opportunities to set up its first overseas assembly unit in Austalia. Its next offering NXR will be launched in the latter half of calendar year 2012.

Defence sector is a high growth area

We believe the company's defence business can increase multifold given India's huge defence spending. Infact the opportunity is estimated at ~USD 10 bn over the next five years, if we consider the current defense allocation of ~US$38.5bn, the separate allocation for Paramilitary and police forces coupled with the current offset policy of Defence Procurement Procedure (DPP) 2005 which requires 30% of the overall expenditure in defence sector from a foreign company to be sourced from Indian companies.

M&M in line with its ambitions for the defense segment has formed a 74:26 JV with BAE Systems Plc., a premier global defense security and aerospace company. To add to its capabilities it recently inked a JV with Rafael Advanced Defence Systems Ltd (manufacturer of defence applications for air, space land and sea applications) and Telephonics Corporation (manufacturer of high-technology integrated information, communication and sensor system solutions) enabling it to provide a wide array of offerings and services. M&M is eyeing half a billion dollar revenues from each of the JV’s over a period of ten years and plans to set up a facility in Bangalore next year.

PV business to remain a marginal business

M&Ms ambitions to have a significant presence in the PV space continue to remain illusive. After the failed attempt with its ‘Logan’ launched in JV with Renault, the car was rebranded as ‘Verito’. This has helped improve sales by almost 78% in FY12 and it now has a 10% market share in the Super Compact Segment. To further improve


April, 2012


sales, M&M is planning to launch a sub four meter Verito by the end of the current financial year. Going forward, we expect this segment to remain a marginal business for M&M.

After purchase of the entire stake of Renault in the JV, the company is now 100% owned by M&M.

Financial Performance

M&M witnessed a 37% yoy increase in revenue to `8,368.6 crore led by strong

performance across all segments and price increases of ~1-2% taken during the quarter. Operating income rose by 10.5% yoy to `1,020.8 crore, however margins

were lower by 290 bps at 12.2% on account of higher commodity prices and subdued tractor demand. While reported earnings were lower by 9.9% yoy to `662.7 crore

adjusted for the exceptional gain of `117 crore in Q3FY11 on sale of long term

investment earnings were higher by 16% yoy.

Revenues for FY11 were higher by 25.7% yoy to `23,493.7 crore led by strong volume growth in the UV and tractor segments. Cost pressures pulled down the EBITDA margins by 120 bps to 14.7%. However, lower interest costs and higher exceptional income helped the company post a 10 bps rise in the net profit margins to 11.3%. Thus, earnings for the company increased by 27.5% yoy and stood at `2,662.1 crore as against `2,087.8 crore in FY10.

Quarterly Financial Performance

Particulars Q3FY12 Q3FY11 FY11 FY10

Net Sales 8386.8 6121.1 23493.7 18602.1

Growth % 37.0

26.0

Total Expenditure 7366.0 5197.3 20062.4 15647.1

EBIDTA 1020.8 923.8 3431.3 2955.0

EBDITA Margin % 12.2 15.1 14.6 15.9

Depreciation 140.8 102.2 413.9 370.8

EBIT (EX OI) 880.0 821.6 3017.5 2584.2

Other Income 67.7 64.1 455.5 328.7

EBIT 947.7 885.7 3473.0 2912.9

Margin % 11.3 14.5 14.8 15.7

Interest 33.7 19.5 70.9 156.9

Exceptional items 0.0 117.5 117.5 90.8

PBT 914.0 983.6 3519.6 2846.8

Margin % 10.9 16.1 15.0 15.3

Provision for Tax 251.9 249.0 857.5 759.0

PAT 662.1 734.7 2662.1 2087.8

PAT Margin (%) 7.9 12.0 11.3 11.2



April, 2012


Financial Outlook

On the back of sustained volume growth across the UV and LCV segments and tractors growing at a moderate pace, we expect revenues to grow at a CAGR of 15.6% over FY12-14 to `40,062.3 crore. Operating profits are expected to post a CAGR of 13% over FY12-14 to `4,661 crore. EBITDA margins are expected to decline

by 60 bps to 11.6% from the current 12.2% on account of higher input costs. Consequently, we expect earnings to grow to `3,169.7 crore (CAGR of 10.7%) over

FY12-14.

Revenue Growth PAT Trend

es

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

FY08 FY09 FY10 FY11 FY12E FY13E FY14E

Rs i

n c

rore

Revenue Growth (RHS)

0

500

1000

1500

2000

2500

3000

3500

FY07 FY08 FY09 FY10 FY11 FY12E FY13E FY14E

Rs i

n c

rore

es=




April, 2012


Valuation

We initiate coverage on Mahindra & Mahindra as a BUY with a sum of the parts (SOTP) valuation based price objective of `970 representing a potential upside of

33% from the CMP of `727. We have valued the standalone business at a P/E multiple of 13 on account of its leadership position in its core segments (Tractors and UV’s) while the subsidiaries have been valued on their respective P/E multiples and assigned a 30% holding company discount.

While we have valued the profitable unlisted arm of M&M i.e. Mahindra Vehicle Manufacturers Ltd. at P/E multiple of 10 the other non profitable businesses have been valued as shown in the table below. Also, we have not valued the defence business and Mahindra Reva Electric Vehicles Ltd as these businesses are in their nascent stage, but could add significant value to the group in the future.

SOTP Valuation Assumptions

Company FY14 EPS Multiple Measure M&M's stakeHolding Co

Disc

Value per

share

Mahindra & Mahindra 51.6 13 P/E 670.8

Mahindra Financial Services Ltd 79.9* 2 P/B 56.0% 30% 62.7

Mahindra Lifespaces Ltd 3.0 6 P/E 51.0% 30% 6.4

Tech Mahindra 30.0 11.5 P/E 47.6% 30% 115.0

Mahindra Holidays 2.0 18 P/E 83.1% 30% 20.8

Mahindra Forgings 1.1 8 P/E 53.0% 30% 3.3

Mahindra Ugine 4.9** 2 EV/EBITDA 51.0% 30% 3.5

MVML 7.7 10 P/E 100.0% - 77.1

Mahindra Two Wheelers Ltd -2.7 100.0% - -12.4***

Mahindra Navistar Ltd 0.0

Total Domestic Business 947.2

CompanyMarket Cap

(Rs in crore)M&M's stake

Holding Co

Disc

Value per

share

Ssangyong Motor Company 3338.0 70.0% 60% 22.8

Total 970.0

Listed Entities

Unlisted Entitites

International Business

*Book Value, **Enterprise Value, ***Accumulated Loss per share


April, 2012


P/BV

0

100

200

300

400

500

600

700

800

900

1000

Mar-02 Mar-04 Mar-06 Mar-08 Mar-10 Mar-12

CMP 1X 1.75X 2.5X 3.25X 4X


EV/EBITDA

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000


EV 10X 13.14X 16.28X 19.42X 22.56X


P/E

0

100

200

300

400

500

600

700

800

900

1000


CMP 5X 8X 11X 14X 17X



April, 2012


Valuations of listed subsidiaries

Mahindra & Mahindra Financial Services Ltd.

Mahindra & Mahindra Financial Services Ltd. (MMFSL) is one of the leading NBFC’s focused on the rural and semi-urban sector providing finance for Utility Vehicles, tractors and cars. In addition, the company has also forayed in rural housing finance and insurance products through dedicated subsidiaries. Backed by its wide distribution network of ~450 branches and well diversified product portfolio we expect the revenues and earnings to post a CAGR of 27.4% and 33.4% to `4,361 crore and `998 crore respectively by FY14 respectively. We have assigned a 2.0 P/B multiple (in line with peers) to MMFSL and arrived at a target price of `958 representing a potential upside of 41% from the CMP of `676 over a period of 18 months.

Y/E Mar Net

Interest Income

Non Interest Income

PAT EPS

EPS Growth (%)

P/E (x)

P/Adj. BV(x)

ROA (%)

ROE (%)

2011 1222.6 129.2 478.0 45.2 - 14.9 2.7 4.6 22.0

2012E 1445.3 136.1 561.4 53.1 17.5 12.7 2.3 3.6 19.8

2013E 1914.8 151.1 785.1 74.7 40.5 9.0 1.8 3.8 22.4

2014E 2381.6 157.8 998.9 95.4 27.6 7.1 1.4 4.0 22.3


Revenue and PAT Growth ROA & ROE Trend

0%

10%

20%

30%

40%

50%

60%

70%

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

FY10 FY11 FY12E FY13E FY14E

Rs.Crore

Revenue PAT Revenue Growth RHS (%) PAT Growth RHS(%)

0%

5%

10%

15%

20%

25%


ROA (%) ROE (%)

Source: MMFSL, Ventura Research Estimates

Source: MMFSL, Ventura Research Estimates


April, 2012


Tech Mahindra

Tech Mahindra, the IT arm of M&M is engaged in providing information technology, networking technology solutions and business process outsourcing services to the global telecommunications industry. Since, the merger of Mahindra Satyam with Tech Mahindra has been announced we value the merged entity at a P/E multiple of 11.5 with a target price of `917 representing a potential upside of 29.1% from CMP of `710. The combined entity will further benefit from cost synergies emanating from operational metrics, economies of scale and sourcing benefits. However, we have not built this in our model and represents an upside risk to our estimates. Further, the merger is also expected to reduce Tech Mahindra’s dependence on revenues from a single vertical (telecom) and will enable its presence across all verticals. Revenues from the telecom vertical are expected to be ~47% (down from 100% earlier) of total revenues of the merged entity.

Revenue and PAT Growth ROE & ROCE Trend

0%

20%

40%

60%

80%

100%

120%

140%

160%

0.0

2000.0

4000.0

6000.0

8000.0

10000.0

12000.0

14000.0

16000.0


Rs.Crore

Revenue PAT

Revenue Growth (RHS) EBITDA Margin (RHS)

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%


ROE (%) ROCE (%)

Source: TechM, MSat, Ventura Research Estimates

Source: TechM, MSat, Ventura Research Estimates


Y/E Mar Net


EPS Growth (%)

RONW (%)

ROCE (%)

P/E (X) EV/

EBITDA(X)

2011 5140.2 1003.3 644.2 56.3 - 22.3 21.7 14.2 9.5

2012E 5588.0 954.1 1098.4 51.1 -9.2 15.1 18.7 8.3 9.9

2013E* 13187.0 2131.0 1761.8 76.3 49.3 30.7 21.2 9.5 4.9

2014E* 14160.0 2235.7 1842.5 79.8 4.6 24.9 18.9 9.1 4.6

*Figures of the merged enitity hence not comparable to earlier years


April, 2012


Mahindra Lifespaces Ltd.

Mahindra Lifespaces Ltd. is the real estate and infrastructure arm of M&M engaged in development of residential projects, business cities, industrial parks and SEZ’s. It has a land bank of 12.5 mn sq ft in addition to forthcoming projects of 5.19 mn sq ft. It is also developing two integrated business cities, at Chennai (~1,500 acres) and Jaipur (~3,000 acres). Aided by new project launches and execution of the existing projects we expect revenues and earnings to post a CAGR of 23.7% and 21.3% over FY12-14 to `998.1 crore and `184.8 crore respectively.

Y/E Mar Net


EPS Growth (%)

RONW (%)

ROCE (%)

P/E (X) EV/

EBITDA(X)

2011 611.9 176.4 113.4 27.8 - 10.6 11.3 11.8 8.9

2012E 652.2 185.4 125.6 30.8 10.8 10.8 11.1 10.7 8.5

2013E 818.8 224.2 151.8 37.2 20.8 11.8 12.2 8.8 7.0

2014E 998.1 272.1 184.8 45.3 21.8 12.8 13.0 7.2 5.8


Revenue and PAT Growth ROE & ROCE Trend es

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0.0

200.0

400.0

600.0

800.0

1000.0

1200.0


Rs.Crore

Revenue PAT

Revenue Growth(%) RHS EBITDA Margin (%) RHS

0%

2%

4%

6%

8%

10%

12%

14%


ROE (%) ROCE (%)

es=

Source: Mahindra Lifespaces Ltd, Ventura Research Estimates

Source: Mahindra Lifespaces Ltd, Ventura Research Estimates


April, 2012


Mahindra Holidays & Resorts India Ltd.

Mahindra Holidays & Resorts India Ltd. (MHRIL) is engaged in the time sharing industry (access to holiday clubs for a fixed number of years on payment of an upfront fee). MHRIL currently has a base of ~1,38,000 members and 37 resorts across various locations in India with an inventory of 1,745 rooms. We expect the revenue and earnings to post a CAGR of 14.5% and 11.6% over FY12-14 and reach `693 crore and `121.8 crore respectively driven by higher member acquisitions and a higher

room inventory at newer locations. The member base is expected to touch 1,82,000 by FY14 from the current 1,37,000 and room inventory to ~2,600 rooms from the current 1,745 rooms.

Y/E Mar Net


EPS Growth (%)

RONW (%)

ROCE (%)

P/E (X) EV/

EBITDA(X)

2011 487.1 124.9 102.8 12.3 - 20.5 11.7 23.6 18.2

2012E 529.0 96.6 97.8 11.7 -4.8 16.3 9.8 26.7 23.5

2013E 608.8 110.1 112.8 13.5 15.3 15.9 10.1 24.6 20.8

2014E 693.8 127.5 121.8 14.6 7.9 14.6 9.8 23.3 17.9



0%

5%

10%

15%

20%

25%

30%

35%

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0


Rs.Crore

Revenue PAT


0%

5%

10%

15%

20%

25%

30%


ROE (%) ROCE(%)

Source: Mahindra Holiday, Ventura Research Estimates

Source: Mahindra Holiday, Ventura Research Estimates


April, 2012


Mahindra Forgings

Mahindra Forgings Limited (MFL) is engaged in manufacturing forged and machined products for automotive, agriculture, railway, mining, construction and other industries with plants in Germany, UK and India. It has established its presence in European markets by acquiring Stokes Group Limited, Jeco Holdings AG and Schoneweiss & Co. GmbH. MFL generates 80% of its revenues from European markets and caters to M&HCV segment there. We expect revenues and earnings to remain flat over the forecast period and stand at `2,391 crore and `68.6 crore respectively for FY14 due to the weak outlook of its European operations.

Y/E Mar Net


EPS Growth (%)

RONW (%)

ROCE (%)

P/E (X) EV/

EBITDA(X)

2011 1917.9 168.5 3.8 0.4 - 0.5 11.7 156.6 7.1

2012E 2385.9 227.7 70.1 8.0 1763.6 8.1 16.5 8.4 5.3

2013E 2407.5 217.9 62.2 7.1 -11.3 6.7 16.0 9.5 5.5

2014E 2391.9 221.5 68.6 7.8 10.4 6.9 16.4 8.6 5.4


-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

-500.0

0.0

500.0

1000.0

1500.0

2000.0

2500.0

3000.0


Rs.Crore

Revenue PAT

Revenue Growth (RHS) EBITDA Margin ( RHS)

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%


ROE (%) ROCE (%)

Source: MFL, Ventura Research Estimates

Source: MFL, Ventura Research Estimates



April, 2012


Mahindra Ugine Mahindra Ugine (MUSCO) is engaged in the business of steel products and stampings and supplies to automobile, mining, engineering, railways, power, defense and other industries. In order to turnaround its steel business, MUSCO is going to hive of its steel business to a new subsidiary and has entered a JV with Sanyo Special Steel (for technical assistance) and Mitsui & Co. Ltd (to provide marketing support). This subsidiary will enable it to achieve operating breakeven in FY13 on the back of improved efficiencies. We expect the revenues to post a CAGR of 13.2% to `1,950 crore and earnings are expected to stage a turnaround from `-52.9 crore in FY12E to

`62.5 crore respectively by FY14.

Y/E Mar Net


EPS Growth (%)

RONW (%)

ROCE (%)

P/E (X) EV/

EBITDA(X)

2011 1340.5 61.4 -6.0 -1.8 - -3.6 12.6 -28.7 9.6

2012E 1520.5 17.4 -52.9 -16.3 NA -47.1 4.4 -3.2 33.9

2013E 1718.8 89.6 3.8 1.2 -107.2 3.3 13.8 44.9 6.6

2014E 1950.0 163.0 62.5 19.3 1540.2 35.9 23.0 2.7 3.6


0%

5%

10%

15%

20%

25%

-500.0

0.0

500.0

1000.0

1500.0

2000.0

2500.0


Rs.Crore

Revenue PAT


-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%


ROE (%) ROCE(%)

Source: MUSCO, Ventura Research Estimates

Source: MUSCO, Ventura Research Estimates



April, 2012


Financials and Projections (Standalone)

Y/E March, Fig in Rs. Cr FY 2011 FY 2012e FY 2013e FY 2014e Y/E March, Fig in Rs. Cr FY 2011 FY 2012e FY 2013e FY 2014e

Profit & Loss Statement Per Share Data (Rs)

Net Sales 23493.7 29973.7 34926.3 40062.3 EPS 43.4 42.1 45.0 51.6

% Chg. 27.6 16.5 14.7 Cash EPS 50.1 50.7 55.4 63.8

Total Expenditure 20062.4 26325.0 30917.7 35400.0 DPS 11.5 11.5 11.5 11.5

% Chg. 31.2 17.4 14.5 Book Value 168.0 197.0 228.9 267.5

EBDITA 3431.3 3648.7 4008.6 4662.2 Capital, Liquidity, Returns Ratio

EBDITA Margin % 14.6 12.2 11.5 11.6 Debt / Equity (x) 0.2 0.3 0.2 0.2

Other Income 455.5 448.4 450.0 450.0 Current Ratio (x) 0.9 1.0 1.1 1.1

Exceptional items 117.48 0.0 0.0 0.0 ROE (%) 25.8 21.4 19.7 19.3

PBDIT 4004.3 4097.1 4458.6 5112.2 ROCE (%) 31.5 26.7 25.5 25.8

Depreciation 413.9 528.9 637.8 750.0 Dividend Yield (%) 1.6 1.6 1.6 1.6

Interest 70.9 122.0 136.0 136.0 Valuation Ratio (x)

PBT 3519.6 3446.2 3684.8 4226.2 P/E 16.8 17.3 16.2 14.1

Tax Provisions 857.5 861.6 921.2 1056.6 P/BV 4.3 3.7 3.2 2.7

Reported PAT 2662.1 2584.7 2763.6 3169.7 EV/Sales 2.0 1.5 1.3 1.2

PAT Margin (%) 11.3 8.6 7.9 7.9 EV/EBIDTA 13.5 12.7 11.6 9.9

Efficiency Ratio (x)

Manpower cost / Sales (%) 6.3 6.0 5.9 5.8 Inventory (days) 27.2 27.0 27.0 27.0

Other Exp / Sales (%) 1.1 0.8 0.9 0.9 Debtors (days) 21.8 22.0 22.0 22.0

Tax Rate (%) 24.4 25.0 25.0 25.0 Creditors (days) 76.6 75.0 75.0 75.0

Balance Sheet Cash Flow statement

Share Capital 327.6 327.6 327.6 327.6 Profit After Tax 2662.1 2584.7 2763.6 3169.7

Reserves & Surplus 9985.8 11767.8 13728.8 16095.8 Depreciation 413.9 528.9 637.8 750.0

Minority Interest & Others 0.0 0.0 0.0 0.0 Working Capital Changes 231.4 164.9 235.4 244.0

Total Loans 2405.3 3265.8 3400.0 3400.0 Others 529.8 0.0 0.0 0.0

Deferred Tax Iiability 0.0 0.0 0.0 0.0 Operating Cash Flow 3837.2 3278.4 3636.8 4163.6

Total Liabilities 12718.7 15361.2 17456.3 19823.4 Capital Expenditure -951.4 -1785.9 -1650.0 -1700.0

Goodwill 0.0 0.0 0.0 0.0 Change in Investment -2948.9 -564.1 -750.0 -675.0

Gross Block 6227.7 8013.6 9663.6 11363.6 Cash Flow from Investing -3900.4 -2350.0 -2400.0 -2375.0

Less: Acc. Depreciation 2841.7 3370.6 4008.4 4758.4 Proceeds from equity issue 36.6 0.0 0.0 0.0

Net Block 3386.0 4643.0 5655.2 6605.2 Inc/ Dec in Debt -478.3 860.5 134.2 0.0

Capital Work in Progress 985.9 850.0 900.0 875.0 Dividend and DDT -623.8 -802.6 -802.6 -802.6

Investments 9325.3 10025.3 10725.3 11425.3 Cash Flow from Financing -1065.4 57.8 -668.4 -802.6

Net Current Assets -624.1 197.3 530.3 1272.3 Net Change in Cash -1128.6 986.2 568.4 986.0

Deferred Tax Assets -354.4 -354.4 -354.4 -354.4 Opening Cash Balance 1743.2 614.6 1600.9 2169.3

Total Assets 12718.7 15361.2 17456.3 19823.4 Closing Cash Balance 614.6 1600.9 2169.3 3155.3

Ventura Securities Limited Corporate Office: C-112/116, Bldg No. 1, Kailash Industrial Complex, Park Site, Vikhroli (W), Mumbai – 400079 This report is neither an offer nor a solicitation to purchase or sell securities. The information and views expressed herein are believed to be reliable, but no responsibility (or liability) is accepted for errors of fact or opinion. Writers and contributors may be trading in or have positions in the securities mentioned in their articles. Neither Ventura Securities Limited nor any of the contributors accepts any liability arising out of the above information/articles. Reproduction in whole or in part without written permission is prohibited. This report is for private circulation