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Mahindra & Mahindra Overweight
MAHM.BO, MM IN
Jan' 11 - Sales growth driven by tractor segment (+21% yoy)
• M&M’s unit sales grew 22% yoy during the month, with both automotive
(+22% yoy) and FES (+21% yoy) reporting healthy gains.
• Automotive segment sales grew 22% yoy, driven by the three wheelers
while UVs/pick up sales moderated: M&M’s sales growth in the light
truck/pick up segment moderated at +18% yoy (vs.+46% YTD), as the
Maximmo was launched in Jan’10; the passenger UV segment sales growth
came in at +11% yoy. The low value three wheeler segment sales were up 37%
yoy.
• Tractor sales growth (+21% yoy) holds firm: Tractor sales at 20,499 units
continue to be driven by the increasing trend toward mechanization of
agriculture, given growing scarcity of labor as well as higher farm income.
Management is guiding for sales growth to come in at double digits in FY12E,
given a healthy demand environment in the rural segment.
• Logan reported sales of 1,120 units (+102%), off of a low base.
• During the month, M&M has issued 17.3m shares – 3% of share capital on
par with the M&M employees’ stock option trust: The Trust will grant
options with respect to these shares to eligible employees over a period of time.
When the options are granted, the amortisation to the Profit and Loss Account
of the company will be spread over the vesting period, which presently is
envisaged at five years.
• During the month, M&M’s stock price (-9%) outperformed a falling market as
the broader BSE Sensex declined 12% mom. We believe that growth in the FES
segment will be driven by growing farm prosperity, while growth in the
automotive segment will be driven by new product launches in FY12E.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Mahindra & Mahindra Overweight
MAHM.BO, MM IN
Jan' 11 - Sales growth driven by tractor segment (+21% yoy)
• M&M’s unit sales grew 22% yoy during the month, with both automotive
(+22% yoy) and FES (+21% yoy) reporting healthy gains.
• Automotive segment sales grew 22% yoy, driven by the three wheelers
while UVs/pick up sales moderated: M&M’s sales growth in the light
truck/pick up segment moderated at +18% yoy (vs.+46% YTD), as the
Maximmo was launched in Jan’10; the passenger UV segment sales growth
came in at +11% yoy. The low value three wheeler segment sales were up 37%
yoy.
• Tractor sales growth (+21% yoy) holds firm: Tractor sales at 20,499 units
continue to be driven by the increasing trend toward mechanization of
agriculture, given growing scarcity of labor as well as higher farm income.
Management is guiding for sales growth to come in at double digits in FY12E,
given a healthy demand environment in the rural segment.
• Logan reported sales of 1,120 units (+102%), off of a low base.
• During the month, M&M has issued 17.3m shares – 3% of share capital on
par with the M&M employees’ stock option trust: The Trust will grant
options with respect to these shares to eligible employees over a period of time.
When the options are granted, the amortisation to the Profit and Loss Account
of the company will be spread over the vesting period, which presently is
envisaged at five years.
• During the month, M&M’s stock price (-9%) outperformed a falling market as
the broader BSE Sensex declined 12% mom. We believe that growth in the FES
segment will be driven by growing farm prosperity, while growth in the
automotive segment will be driven by new product launches in FY12E.
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