FORCE MOTORS 2017-18 Annual Report Analysis

Sat, 31 Mar

FORCE MOTORS has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

FORCE MOTORS Income Statement Analysis

• Operating income during the year rose 25.7% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 0.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 8.1% in FY18 as against 10.2% in FY17.
• Depreciation charges increased by 14.3% and finance costs increased by 20.4% YoY, respectively.
• Other income declined by 19.1% YoY.
• Net profit for the year declined by 18.3% YoY.
• Net profit margins during the year declined from 6.8% in FY17 to 4.4% in FY18.

FORCE MOTORS Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	26,438	33,221	25.7%
Other income	Rs m	849	687	-19.1%
Total Revenues	Rs m	27,287	33,909	24.3%
Gross profit	Rs m	2,691	2,678	-0.5%
Depreciation	Rs m	1,131	1,293	14.3%
Interest	Rs m	55	67	20.4%
Profit before tax	Rs m	2,354	2,006	-14.8%
Tax	Rs m	552	534	-3.3%
Profit after tax	Rs m	1,802	1,472	-18.3%
Gross profit margin	%	10.2	8.1
Effective tax rate	%	23.4	26.6
Net profit margin	%	6.8	4.4

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FORCE MOTORS Balance Sheet Analysis

• The company's current liabilities during FY18 down at Rs 7 billion as compared to Rs 9 billion in FY17, thereby witnessing an decrease of -24.2%.
• Current assets fell 19% and stood at Rs 11 billion, while fixed assets rose 16% and stood at Rs 14 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 25 billion as against Rs 26 billion during FY17, thereby witnessing a fall of 3%.

FORCE MOTORS Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	16,676	18,011	8.0
Current Liabilities	Rs m	9,013	6,830	-24.2
Long-term Debt	Rs m	20	0	-100.0
Total Liabilities	Rs m	25,924	25,230	-2.7
Current assets	Rs m	13,887	11,266	-18.9
Fixed Assets	Rs m	12,037	13,964	16.0
Total Assets	Rs m	25,924	25,230	-2.7

FORCE MOTORS Cash Flow Statement Analysis

• FORCE MOTORS's cash flow from operating activities (CFO) during FY18 stood at Rs 3 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -806 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -2 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -470 million from the Rs 300 million net cash flows seen during FY17.

FORCE MOTORS Cash Flow Statement 2017-18

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-17	Mar-18
Cash Flow from Operating Activities	Rs m	4,706	2,565	-45.5%
Cash Flow from Investing Activities	Rs m	-6,208	-806	-
Cash Flow from Financing Activities	Rs m	1,802	-2,229	-
Net Cash Flow	Rs m	300	-470	-

Current Valuations for FORCE MOTORS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 111.7, an decline from the EPS of Rs 136.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,733.0, stands at 24.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.0 times, while the price to sales ratio stands at 1.1 times.
• The company's price to cash flow (P/CF) ratio stood at 18.0 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Sales per share (Unadj.)	Rs	2,005.9	2,520.6
TTM Earnings per share	Rs	136.7	111.7
Diluted earnings per share	Rs	136.7	111.7
Price to Cash Flow	x	20.2	18.0
TTM P/E ratio	x	32.9	24.5
Price / Book Value ratio	x	3.0	2.8
Market Cap	Rs m	50,333	49,642
Dividends per share (Unadj.)	Rs	10.0	10.0

Ratio Analysis for FORCE MOTORS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.6x during FY18, from 1.5x during FY17. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio deteriorated and stood at 31.1x during FY18, from 43.5x during FY17. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company declined and down at 8.2% during FY18, from 10.8% during FY18. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company declined and down at 11.5% during FY18, from 14.4% during FY17. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company declined and down at 6.1% during FY18, from 7.2% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Current ratio	x	1.5	1.6
Debtors’ Days	Days	159	266
Interest coverage	x	43.5	31.1
Debt to equity ratio	x	0.0	0.0
Return on assets	%	7.2	6.1
Return on equity	%	10.8	8.2
Return on capital employed	%	14.4	11.5

To see how FORCE MOTORS has performed over the last 5 years, please visit here.

FORCE MOTORS Share Price Performance

Over the last one year, FORCE MOTORS share price has moved down from Rs 4,487.1 to Rs 2,733.0, registering a loss of Rs 1,754.1 or around 39.1%.

Meanwhile, the S&P BSE AUTO Index is trading at Rs 24,057.3 (down 0.1%). Over the last one year it has moved up from 22,012.7 to 24,057.3, a gain of 2,045 points (up 9.3%).

Overall, the S&P BSE SENSEX is up 12.1% over the year.

(To know more, check out historical annual results for FORCE MOTORS and quarterly results for FORCE MOTORS)

Read: Latest Annual Report Analysis of FORCE MOTORS