MAHINDRA & MAHINDRA LTD. | Integrated Annual Report 2022-23

EXPENDITURE The total expenditure during the year as a percentage of revenue is 91.7% as compared to 92.6% in the previous year. The reduction is a reflection of the cost management initiative undertaken by the Company. MATERIAL COST The material cost as a percentage of revenue has increased from 73.7% in the previous year to 76% in the current year mainly on account of elevated levels of inputs costs and supply side challenges witnessed during F23. EMPLOYEE BENEFITS EXPENSE The personnel cost as a percentage of revenue from operations has decreased from 5.8% in the previous year to 4.3% in the current year mainly due to the higher revenue base in the current year. OTHER EXPENSES Other expenses as a percentage of revenue from operations have decreased from 8.4% in the previous year to 7.4% in the current year mainly on account of stringent cost control measures adopted by the Company coupled with higher revenue base in the current year. DEPRECIATION, AMORTISATION AND IMPAIRMENT EXPENSE Depreciation, amortisation and impairment as a percentage of revenue from Operations have decreased from 4.3% in the previous year to 3.7% in the current year mainly due to higher revenue base in the current year. FINANCE COSTS The interest expense as a percentage of revenue has decreased from 0.4% in the previous year to 0.3% in the current year mainly on account of repayment of borrowings in the current year. Explanation for variation of 25%or more in Key Financial Ratio: Interest Coverage Ratio: The interest coverage ratio is healthier at 21.6 in FY 2022-23 as against 12.9 in the previous year primarily due to decrease in f inance cost resulting from repayment of borrowings during the year. EXCEPTIONAL ITEMS Exceptional items in the current and previous year comprises of prof it earned on sale of certain long-term investments partly offset by impairment of certain investments in subsidiaries, associates and joint ventures and certain long-termassets. TAX EXPENSE st The provision for current tax and deferred tax for the year ended 31 March, 2023, as a percentage to prof it before tax (before exceptional items) is lower than the previous year mainly on account of higher dividend income in FY2022-23 as compared to FY2021-22 and deferred tax created on capital losses. The key f inancial ratios of the Company are given as below: Debtors Turnover (times) Inventory Turnover (times) Interest Coverage Ratio (times) Current Ratio (times) Debt Equity Ratio (times) Operating Profit Margin (%) Net Profit Margin (%) Return on Net Worth (%) Particulars 23.5 8.6 21.6 1.33 0.16 12.3 7.7 15.9 21.6 7.9 12.9 1.38 0.17 12.2 8.5 13.3 F22 F23 M&M 138 The Return on Average Net Worth has improved from 13.3% in the previous year to 15.9% in the current year on the base of higher prof it for the current year.