Mahindra Finance (Analysing the Historical Financial Statement)
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Mahindra FINANCE ransforming rural life across the country
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Transcript of Mahindra Finance (Analysing the Historical Financial Statement)
Mahindra FINANCE
Transforming rural life across the country
Intr
oduc
tion
Is a subsidiary of Mahindra and Mahindra Limited
It provides loan based on customers future earning capacity.
Special Focus- Rural, semi-urban non-banking finance industry
has 657offices covering 25states and4 union territories in India
It finances for a wide range of vehicles, home development requirements
strived towards developing skill sets of the local population
Shareholding Pattern
Mahindra & Mahindra 51.20 %FII 38 %Mutual Funds & DII 5.80%Non Institutions 5%
Industry Overview
Automobile Finance Market to Grow by 19-21% over the next 2 years
(Rs. Billion) FY10 FY11 FY12 FY13 FY17 CAGR FY12-FY17
CARS 349 476 456 506 1165 19-21%
UTILITY VEHICLES
108 155 172 217 409 18-20%
COMMERCIAL VEHICLES
272 402 478 457 1150 18-20%
TWO- WHEELERS
60 77 93 108 199 15-17%
TOTAL 789 1,110 1,119 1,288 2,923 19-21%
Business Strategy
Business StrategyGrowth in rural & semi urban markets for vehicle & automobile Financing
Expand Branch Network
Leverage existing customers base through Direct Marketing Initiatives
Diversify Product Portfolio
Continue to attract, train & retain talented employees
Effective use of technology to improve productivity
Leverage the “Mahindra” Ecosystem
Business Model
Break up of estimated value of Assets Financed Segments Year ended March-
13Year ended March-12
Year ended March-11
Auto/Utility Vehicles 31% 26% 30%
Tractors 19% 20% 22%
Cars 24% 26% 28%
Commercial vehicles & construction equipments
14% 17% 11%
Pre-owned vehicles & others
12% 11% 9%
Mahindra FinanceAnalysis of Statement
Some view onStandalone P&L
Standalone P&L (Operating Revenue & Total Expenses)
2011 2012 2013 20140
100000
200000
300000
400000
500000
600000
196435.45
276770.07
385672.15
492163.21
122305.4
183304.7
270222.7
385210.3
Operating Revenue (in Lakhs) Total Expenses (in Lakhs)
Operating RevenueCAGR
35.8%
Total ExpensesCAGR
46.6%
Standalone P&L(Operating Revenue Source ) In ‘% of operating income’
2011 2012 2013 20140.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
100.00% 100.00% 100.00% 100.00%
85.61% 88.13% 89.09% 91.86%
14.39% 11.87% 10.91% 8.14%
Interest Income Total operating Income Other Financial Services
Standalone P&L (Total Expenses Ratio ‘on operating income’)
2011 2012 2013 20140.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
100.0% 100.0% 100.0% 100.0%
62.3% 66.2% 70.1%78.3%
33.6%40.5% 42.0% 44.5%
Operating Income (in %) Total Exp. On Sales(in %) Interest Cost on Sales (in %)
Standalone P&L (Provision for NPA)
2011 2012 2013 2014
-10.00%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
43.75%
37.10%
30.77%
55.61%
-2.6% -1.3%
1.5%5.0%
NPA (As per BS) (in'% of LTP) NPA(As per P&L) (in '% of Operating Income)
Standalone P&L (PAT)
2011 2012 2013 20140.0%
5.0%
10.0%
15.0%
20.0%
25.0%23.6%
22.4% 22.9%
18.0%
PAT(in '%of Operating Income)
PAT(in '%of Operating Income)
Some view onConsolidated P&L
Consolidated P&L (Operating Revenue & Total Expenses)
2011 2012 2013 20140
100000
200000
300000
400000
500000
600000
202561.29
288937.88
409498.79
527522.73
129087.6
194902.3
279082.6
383902.5
Operating Revenue (in Lakhs) Total Expenses
Operating RevenueCAGR
37.6%
Total ExpensesCAGR
43.8%
Consolidated P&L(PAT ‘in % of operating income’ )
2011
2012
2013
2014
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%
23.6%
22.4%
22.9%
18.0%
24.4%
22.3%
22.7%
18.3%
PAT(Consolidated) (in %) PAT (Standalone)(in %)
DU-PONTANALYSIS
2011 20142012 2013
DuPont
Profit Margin
Total Asset Turnover
Equity Multiplier
ROA
ROE
24.37%
4.34% 4.80%
4.82 4.47 4.89 4.04
18.10% 20.18% 21.21% 19.36%
19.92% 19.68%
22.31%
3.75% 4.52%
19.46%
18.29% 22.68%
20.52%
DuPont
2010 2011 2013 20140.00%
5.00%
10.00%
15.00%
20.00%
25.00%
4.04% 4.89% 4.47% 4.82%
4.80% 4.34% 4.52% 3.75%
19.36%21.21%
20.18%
18.10%
Equity Multiplier ROA ROE
CASH FLOW
2011 20142012 2013
CASH-FLOW
FCFF
FCFE
ROE
Reinvestment Ratio
Sustainable GR
0.87
4.93% 6.43% 6.90%
4.07% 5.59% 5.99%
102514.15
-395951.08
0.83 0.87
60881.96
-389190.36 -465318.71
116723.41
Beta 0.600.60
Average Beta (from Jan,2005 to Feb,2015)
2011 20142012 2013
PE & Price/Book Value
Market Price
EPS
Book Value
PE Ratio
MP/Book Value
139.27
2.24 2.89
472.93 408.80 295.93 248.86
0.51 0.51 0.48 0.56
82.49 48.18
140.74
2.84 2.51
62.77
242.75 207.34
85.60
Comparison with LIC HOUSING FIN..
2011 2012 2013 20140.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Mahindra Finance LIC
PAT(% Of Revenue)
ROA,ROE&ROLE OF EQUITY MULTIPLIER
Equity MultiplierROA ROE
4.34%
4.80%
4.82
4.47
4.89
4.04
18.10%
20.18%
21.21%
19.36%
3.75%
4.52%
1.56%
1.73%
1.53%
1.53%
10.00
9.69
9.15
9.96
15.33%
14.80%
14.25%
17.25%
MF LIC MF LIC MF LIC
2011
2014
2012
2013
Beta0.600.60
Average Beta (from Jan,2005 to Feb,2015)
0.601.38
MF LIC
Thank You
33
MMS-B, 2014-15Sumit & Group
