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FORCE MOTORS 2017-18 Annual Report Analysis

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FORCE MOTORS 2017-18 Annual Report Analysis
Tue, 1 Jan

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 11.8% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 2.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 8.0% in FY18 as against 8.7% in FY17.
  • Depreciation charges increased by 14.3% and finance costs increased by 20.4% YoY, respectively.
  • Other income declined by 28.0% YoY.
  • Net profit for the year declined by 18.3% YoY.
  • Net profit margins during the year declined from 5.7% in FY17 to 4.2% in FY18.

FORCE MOTORS Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 30,694 34,305 11.8%
Other income Rs m 849 611 -28.0%
Total Revenues Rs m 31,543 34,917 10.7%
Gross profit Rs m 2,681 2,754 2.7%
Depreciation Rs m 1,131 1,293 14.3%
Interest Rs m 55 67 20.4%
Profit before tax Rs m 2,344 2,006 -14.4%
Tax Rs m 552 534 -3.3%
Profit after tax Rs m 1,802 1,472 -18.3%
Gross profit margin % 8.7 8.0
Effective tax rate % 23.5 26.6
Net profit margin % 5.7 4.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 7% and stood at Rs 10 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 26,039 25,230 -3.1
 
Current assets Rs m 13,887 11,266 -18.9
Fixed Assets Rs m 9,827 10,483 6.7
Total Assets Rs m 26,039 25,230 -3.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 1,623.0, stands at 13.7 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.8 times, while the price to sales ratio stands at 1.4 times.
  • The company's price to cash flow (P/CF) ratio stood at 7.7 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 2,328.8 2,602.8
TTM Earnings per share Rs 136.7 111.7
Diluted earnings per share Rs 136.7 111.7
Price to Cash Flow x 7.3 7.7
TTM P/E ratio x 13.7 13.7
Price / Book Value ratio x 3.0 2.8
Market Cap Rs m 21,391 21,391
Dividends per share (Unadj.) Rs 10.0 10.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 43.3x 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 7.1% 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 14 26
Interest coverage x 43.3 31.1
Debt to equity ratio x 0.0 0.0
Return on assets % 7.1 6.1
Return on equity % 10.8 8.2
Return on capital employed % 14.4 11.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 up from Rs 3,691.5 to Rs 1,623.0, registering a loss of Rs 2,068.5 or around 56.0%.

Meanwhile, the S&P BSE AUTO Index is trading at Rs 20,770.7 (down 0.3%). Over the last one year it has moved down from 26,751.2 to 20,770.7, a loss of 5,981 points (down 22.4%).

Overall, the S&P BSE SENSEX is up 6.5% over the year.

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

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