EICHER MOTOR 2017-18 Annual Report Analysis

Sat, 31 Mar

EICHER MOTOR 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.

EICHER MOTOR Income Statement Analysis

• Operating income during the year rose 42.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 29.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 32.2% in FY18 as against 35.5% in FY17.
• Depreciation charges increased by 45.2% and finance costs increased by 50.0% YoY, respectively.
• Other income grew by 23.2% YoY.
• Net profit for the year grew by 26.2% YoY.
• Net profit margins during the year declined from 24.9% in FY17 to 22.1% in FY18.

EICHER MOTOR Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	61,273	87,107	42.2%
Other income	Rs m	2,273	2,801	23.2%
Total Revenues	Rs m	63,546	89,908	41.5%
Gross profit	Rs m	21,740	28,076	29.1%
Depreciation	Rs m	1,538	2,233	45.2%
Interest	Rs m	36	53	50.0%
Profit before tax	Rs m	22,439	28,591	27.4%
Tax	Rs m	7,203	9,359	29.9%
Profit after tax	Rs m	15,236	19,232	26.2%
Gross profit margin	%	35.5	32.2
Effective tax rate	%	32.1	32.7
Net profit margin	%	24.9	22.1

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EICHER MOTOR Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 23 billion as compared to Rs 15 billion in FY17, thereby witnessing an increase of 48.1%.
• Current assets rose 84% and stood at Rs 25 billion, while fixed assets rose 24% and stood at Rs 70 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 95 billion as against Rs 70 billion during FY17, thereby witnessing a growth of 36%.

EICHER MOTOR Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	52,999	69,703	31.5
Current Liabilities	Rs m	15,298	22,652	48.1
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	70,091	95,222	35.9
Current assets	Rs m	13,809	25,350	83.6
Fixed Assets	Rs m	56,281	69,872	24.1
Total Assets	Rs m	70,091	95,222	35.9

EICHER MOTOR Cash Flow Statement Analysis

• EICHER MOTOR's cash flow from operating activities (CFO) during FY18 stood at Rs 25 billion, an improvement of 45.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -21 billion, an improvement of 23.0% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -3 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 752 million from the Rs -103 million net cash flows seen during FY17.

EICHER MOTOR 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	17,080	24,823	45.3%
Cash Flow from Investing Activities	Rs m	-17,436	-21,450	-
Cash Flow from Financing Activities	Rs m	253	-2,620	-
Net Cash Flow	Rs m	-103	752	-

Current Valuations for EICHER MOTOR

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 705.5, an improvement from the EPS of Rs 559.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 28,337.0, stands at 390.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 11.5 times, while the price to sales ratio stands at 9.2 times.
• The company's price to cash flow (P/CF) ratio stood at 37.3 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	2,251.8	3,195.4
TTM Earnings per share	Rs	559.9	705.5
Diluted earnings per share	Rs	55.7	70.3
Price to Cash Flow	x	416.5	37.3
TTM P/E ratio	x	419.1	390.3
Price / Book Value ratio	x	11.5	11.5
Market Cap	Rs m	607,156	801,317
Dividends per share (Unadj.)	Rs	10.0	11.0

Ratio Analysis for EICHER MOTOR

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.1x during FY18, from 0.9x 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 536.4x during FY18, from 631.3x 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 27.6% during FY18, from 28.7% 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 41.1% during FY18, from 42.4% 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 20.3% during FY18, from 21.8% 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	0.9	1.1
Debtors’ Days	Days	0	0
Interest coverage	x	631.3	536.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	21.8	20.3
Return on equity	%	28.7	27.6
Return on capital employed	%	42.4	41.1

To see how EICHER MOTOR has performed over the last 5 years, please visit here.

EICHER MOTOR Share Price Performance

Over the last one year, EICHER MOTOR share price has moved up from Rs 25,554.2 to Rs 28,337.0, registering a gain of Rs 2,782.8 or around 10.9%.

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 EICHER MOTOR and quarterly results for EICHER MOTOR)

Read: Latest Annual Report Analysis of EICHER MOTORS