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MAHINDRA AND MAHINDRA: Key takeaways
Maintains guidance of volume growth: Company reiterated its guidance on industry
growth of 15% YoY for utility vehicles and 10-12% YoY growth for tractors for FY2012E.
New models (Xylo pick up, global SUV, new variants of Maxximo etc) will be key drivers
for volume growth and help the company in maintaining its market share.
Pricing actions critical to maintain margins: Company indicated that raw material
pressures are escalating and could put pressure on the EBITDA margins if prices are not
increased. Company has taken a 5% increase in prices in tractors and 3% in utility
vehicles in 9MFY2011. Company also took a 0.5-2% increase in prices in January 2011 in
utility vehicles and is contemplating a price increase for tractors as well.
Maxximo has gained a 25% market share in the less than 1 ton segment. It is currently
selling at 4,000 units/month run rate. Gio’s monthly run rate is ~1,000 vehicles/month
and the sales has not been as per management’s expectations. Customer feedback on
Gio suggested that product lacked enough power when utilized at higher loads which
company plans to address through minor modifications in the engine. Company’s new
offering Xylo pick up will be positioned for captive business purposes which is 45% of the
pick-up market.
Ssangyong Motors has received formal approval from creditors for Mahindra’s bid to
acquire the company. Creditors have taken a $100 mn haircut on the amount owed to
them. M&M will acquire a 70% stake in Ssangyong Motors for a consideration of US$463
mn.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
MAHINDRA AND MAHINDRA: Key takeaways
Maintains guidance of volume growth: Company reiterated its guidance on industry
growth of 15% YoY for utility vehicles and 10-12% YoY growth for tractors for FY2012E.
New models (Xylo pick up, global SUV, new variants of Maxximo etc) will be key drivers
for volume growth and help the company in maintaining its market share.
Pricing actions critical to maintain margins: Company indicated that raw material
pressures are escalating and could put pressure on the EBITDA margins if prices are not
increased. Company has taken a 5% increase in prices in tractors and 3% in utility
vehicles in 9MFY2011. Company also took a 0.5-2% increase in prices in January 2011 in
utility vehicles and is contemplating a price increase for tractors as well.
Maxximo has gained a 25% market share in the less than 1 ton segment. It is currently
selling at 4,000 units/month run rate. Gio’s monthly run rate is ~1,000 vehicles/month
and the sales has not been as per management’s expectations. Customer feedback on
Gio suggested that product lacked enough power when utilized at higher loads which
company plans to address through minor modifications in the engine. Company’s new
offering Xylo pick up will be positioned for captive business purposes which is 45% of the
pick-up market.
Ssangyong Motors has received formal approval from creditors for Mahindra’s bid to
acquire the company. Creditors have taken a $100 mn haircut on the amount owed to
them. M&M will acquire a 70% stake in Ssangyong Motors for a consideration of US$463
mn.
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