M&M stock analysis; Should you buy this stock?

fundamental analysis Jan 13, 2021

Stock analysis: Mahindra and Mahindra Limited

This article is about Mahindra and Mahindra Limited.
Mahindra and Mahindra Limited engages in the automotive and farm equipment businesses in India and internationally. The company operates through Automotive, Farm Equipment, Financial Services, Hospitality, Real Estate, and Others segments. The company was founded in 1945 and is headquartered in Mumbai, India.

Market capitalization and stock price history

Mahindra and Mahindra Limited has a market capitalization of 1.03 trillion, at the time of making this video.
Its stock price made an all time high of rupees 983 on 29 August 2018.
market cap and stock price
In past five years, the stock price made a low of rupees 269 on 24 March 2020.
stock price variation

Stock returns

This stock gave compounded annual growth of 42 percentage over past one year, 0 percentage over past three years, and 5 percentage over past five years.
stock returns

Revenue and profits

In past 12 months, Mahindra and Mahindra Limited had a revenue of rupees 836.8 billion, and a gross profit of rupees 372.5 billion.
As compared to previous fiscal year, in the past 12 months, it has seen a revenue decline of 10.8%.
On 31/3/2020, Mahindra and Mahindra Limited reported a total revenue of rupees 937.6 billion, and has seen a revenue decline of -9.0% from the previous year.
The company reported an EBITDA of rupees 125.7 billion.
revenue

Fundamental analysis

Now let us look at some key financial ratios to guage how good or bad this stock is.
Its "beta" value, which is a measure of volatility of stock, is 1.10.
This means the stock moves with more volatility than the market. High-beta stocks are supposed to be riskier but provide higher return potential; low-beta stocks pose less risk but also lower returns.
The price to earnings ratio information is not available for this stock.
The price to earnings ratio indicates whether the stock is undervalued or overvalued.
Based on the previous financial year, the earnings per share value is 1.15.
fundamental analysis
Now, we will compare some key financial ratios with the top 500 NSE stocks.
For this purpose, we divide the distribution of these key indicators in to four parts or "quartiles".
Quartile region is obtained by dividing all the stocks in 4 buckets, so that each bucket contain same number of stocks.
As compared to top 500 stocks in NSE, Mahindra and Mahindra Limited has its beta value in the third quartile.
This means the stock exhibits high volatility.
beta
Mahindra and Mahindra Limited has earnings per share of 1.15, which is higher than 20% of top 500 NSE stocks.
The earnings per share value is bad.
Earnings per share is a company's net profit divided by the number of outstanding shares. This is a wildly used metric to estimate corporate value.
EPS
market cap and stock price
The price to earnings ratio information is not available for this stock.
Price to earnings ratio measures its current share price relative to its per-share earnings.
price to earnings
comparison1
The price to book value ratio is not available for this stock.
The price-to-book ratio compares a company's market value to its book value. Book value is net assets of the company.
This ratio should be looked at in conjunction with return on equity ratio. A low return on equity combined with high price to book ratio means stock is overvalued.
price to book ratio
comparison 2
Mahindra and Mahindra Limited has return on equity value of -2.80%, which is higher than 12% of top 500 NSE stocks.
The return on equity for this stock is in the first quartile, which is bad.
The return on equity is calculated by taking company's net earnings after taxes, subtracting preferred dividends, and dividing by the total equity.
return on equity
comparison 3
Mahindra and Mahindra Limited has debt to equity ratio of 192.24, which is higher than 76% of top 500 NSE stocks.
The debt to equity ratio for this stock is in the fourth quartile, which is bad.
A debt to equity ratio is company's total liabilities divided by shareholder's equity, and lower value of this ratio is preferred.
This ratio is a measure of the degree to which a company is financing its operations through debt versus wholly-owned funds.
A higher value of this ratio tend to indicate higher risk to the investors.
debt to equity
comparison 4
Mahindra and Mahindra Limited has operating cash flow of 112.0 billion in the past 12 months, which is higher than 89% of top 500 NSE stocks.
The operating cash flow for this stock is in the fourth quartile, which is very good.
operating cash flow
comparison 5
Mahindra and Mahindra Limited has levered free cash flow of 69.9 billion in the past 12 months, which is higher than 78% of top 500 NSE stocks.
The operating cash flow for this stock is in the fourth quartile, which is very good.
levered free cash flow
comparison 6
Mahindra and Mahindra Limited has no dividend payout recently.
The dividend payout ratio provides an indication of how much money a company is returning to shareholders versus how much it is keeping on hand to reinvest in growth, pay off debt, or add to cash reserves.
payout ratio
comparison 3

Income Statement

EBITDA
The company reported an EBITDA of rupees 125.7 billion in year 2020, which is 29% less than the EBITDA from the previous year.
The company showcased earnings per share of 1.1 in year 2020, which is 98% less than the EPS from the previous year.
EPS growth

Balance sheet

Mahindra and Mahindra Limited has shown year on year decrease in stockholder's equity by -0.0% in year 2020.
This stock showed year on year increase in stockholder's equity by 8.7% in year 2019.
This stock showed year on year increase in stockholder's equity by 23.7% in year 2018.
stockholder equity

Cash flow

Mahindra and Mahindra Limited has free cash flow of rupees 48.3 billion in the past twelve months.
The free cash flow for the year 2020 was rupees -83.5 billion.
Cash flow

Fundamental analysis

Here you can see statistics related to number of shares.
25.74% of shares are help by insiders
47.41% of shares are help by institutions
fundamental analysis
Mahindra & Mahindra Limited is at position 34 in terms of market capitalization among the nifty 50 stocks.
market cap and stock price
Mahindra & Mahindra Limited is at position 15 in terms of annual revenue among the nifty 50 stocks.
market cap and stock price
Mahindra & Mahindra Limited is at position 18 in terms of free cash flow among the nifty 50 stocks.
market cap and stock price
Here, we presented a very simplified assessment of fundamental indicators. We categorized the performance on each indicator by comparing it with top 500 NSE stocks.
On your side, go thoroughly through the financial data before deciding on investing in this stock.
market cap and stock price

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