FORCE MOTORS 2018-19 Annual Report Analysis

Sun, 31 Mar

FORCE MOTORS has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

FORCE MOTORS Income Statement Analysis

• Operating income during the year rose 9.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 4.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 7.6% in FY19 as against 8.1% in FY18.
• Depreciation charges increased by 16.8% and finance costs increased by 129.8% YoY, respectively.
• Other income grew by 18.8% YoY.
• Net profit for the year grew by 0.1% YoY.
• Net profit margins during the year declined from 4.4% in FY18 to 4.0% in FY19.

FORCE MOTORS Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	33,221	36,525	9.9%
Other income	Rs m	687	816	18.8%
Total Revenues	Rs m	33,909	37,341	10.1%
Gross profit	Rs m	2,678	2,788	4.1%
Depreciation	Rs m	1,293	1,509	16.8%
Interest	Rs m	67	153	129.8%
Profit before tax	Rs m	2,006	1,942	-3.2%
Tax	Rs m	534	467	-12.5%
Profit after tax	Rs m	1,472	1,474	0.1%
Gross profit margin	%	8.1	7.6
Effective tax rate	%	26.6	24.1
Net profit margin	%	4.4	4.0

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FORCE MOTORS Balance Sheet Analysis

• The company's current liabilities during FY19 down at Rs 7 billion as compared to Rs 7 billion in FY18, thereby witnessing an decrease of -4.4%.
• Long-term debt stood at Rs 2 billion as compared to Rs 0 million during FY18, a fall of 0.0%.
• Current assets fell 3% and stood at Rs 11 billion, while fixed assets rose 25% and stood at Rs 17 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 28 billion as against Rs 25 billion during FY18, thereby witnessing a growth of 12%.

FORCE MOTORS Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	18,011	19,332	7.3
Current Liabilities	Rs m	6,830	6,531	-4.4
Long-term Debt	Rs m	0	2,056	0.0
Total Liabilities	Rs m	25,230	28,360	12.4
Current assets	Rs m	11,266	10,914	-3.1
Fixed Assets	Rs m	13,964	17,446	24.9
Total Assets	Rs m	25,230	28,360	12.4

FORCE MOTORS Cash Flow Statement Analysis

• FORCE MOTORS's cash flow from operating activities (CFO) during FY19 stood at Rs 3 billion, an improvement of 22.4% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -6 billion, an improvement of 651.4% on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs 3 billion, an improvement of 215% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -353 million from the Rs -470 million net cash flows seen during FY18.

FORCE MOTORS Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	2,565	3,140	22.4%
Cash Flow from Investing Activities	Rs m	-806	-6,056	-
Cash Flow from Financing Activities	Rs m	-2,229	2,563	-
Net Cash Flow	Rs m	-470	-353	-

Current Valuations for FORCE MOTORS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 111.9, an improvement from the EPS of Rs 111.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,700.1, stands at 15.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.2 times, while the price to sales ratio stands at 0.6 times.
• The company's price to cash flow (P/CF) ratio stood at 10.0 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	2,520.6	2,771.2
TTM Earnings per share	Rs	111.7	111.9
Diluted earnings per share	Rs	111.7	111.9
Price to Cash Flow	x	13.0	10.0
TTM P/E ratio	x	24.5	15.2
Price / Book Value ratio	x	2.8	1.5
Market Cap	Rs m	49,642	29,897
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 1.7x during FY19, from 1.6x during FY18. 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 13.7x during FY19, from 31.1x during FY18. 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 7.6% during FY19, from 8.2% during FY19. 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 9.8% during FY19, from 11.5% during FY18. 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 5.7% during FY19, from 6.1% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	1.6	1.7
Debtors’ Days	Days	266	166
Interest coverage	x	31.1	13.7
Debt to equity ratio	x	0.0	0.1
Return on assets	%	6.1	5.7
Return on equity	%	8.2	7.6
Return on capital employed	%	11.5	9.8

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 2,733.0 to Rs 1,700.1, registering a loss of Rs 1,033.0 or around 37.8%.

Meanwhile, the S&P BSE AUTO Index is trading at Rs 18,824.9 (up 1.2%). Over the last one year it has moved down from 24,057.3 to 18,824.9, a loss of 5,232 points (down 21.7%).

Overall, the S&P BSE SENSEX is up 16.3% 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