M&M 2017-18 Annual Report Analysis

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M&M 2017-18 Annual Report Analysis
Thu, 9 Aug

M&M 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.

M&M 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 23.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 14.4% in FY18 as against 12.8% in FY17.
  • Depreciation charges and finance costs increased by 16.6% YoY and 9.3% YoY, respectively.
  • Other income declined by 13.6% YoY.
  • Net profit for the year grew by 96.5% YoY.
  • Net profit margins during the year grew from 4.8% in FY17 to 8.6% in FY18.

M&M Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 837,731 920,940 9.9%
Other income Rs m 7,301 6,310 -13.6%
Total Revenues Rs m 845,032 927,250 9.7%
Gross profit Rs m 107,348 132,261 23.2%
Depreciation Rs m 28,127 32,799 16.6%
Interest Rs m 36,485 39,871 9.3%
Profit before tax Rs m 50,038 65,901 31.7%
Tax Rs m 22,997 23,677 3.0%
Profit after tax Rs m 40,505 79,578 96.5%
Gross profit margin % 12.8 14.4
Effective tax rate % 46.0 35.9
Net profit margin % 4.8 8.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



M&M Balance Sheet Analysis

  • The company's current liabilities during FY18 stood at Rs 491 billion as compared to Rs 398 billion in FY17, thereby witnessing an increase of 23.4%.
  • Long-term debt stood at Rs 338 billion as compared to Rs 301 billion during FY17, a growth of 12.2%.
  • Current assets rose 23% and stood at Rs 591 billion, while fixed assets rose 21% and stood at Rs 305 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 1,372 billion as against Rs 1,147 billion during FY17, thereby witnessing a growth of 20%.

M&M Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 297,380 367,752 23.7
 
Current Liabilities Rs m 398,325 491,495 23.4
Long-term Debt Rs m 301,245 338,092 12.2
Total Liabilities Rs m 1,147,422 1,372,109 19.6
 
Current assets Rs m 478,778 590,760 23.4
Fixed Assets Rs m 252,680 304,514 20.5
Total Assets Rs m 1,147,422 1,372,109 19.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



M&M Cash Flow Statement Analysis

  • M&M's cash flow from operating activities (CFO) during FY18 stood at Rs 7 billion, an improvement of 272.4% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -55 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs 63 billion, an improvement of 3% on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs 15 billion from the Rs 4 billion net cash flows seen during FY17.

M&M 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 1,831 6,819 272.4%
Cash Flow from Investing Activities Rs m -58,754 -54,679 -
Cash Flow from Financing Activities Rs m 61,080 63,145 3.4%
Net Cash Flow Rs m 4,158 15,291 267.8%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for M&M

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 64.0, an decline from the EPS of Rs 74.8 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 932.5, stands at 24.0 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 3.8 times, while the price to sales ratio stands at 1.5 times.
  • The company's price to cash flow (P/CF) ratio stood at 11.4 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 1,546.3 740.8
TTM Earnings per share Rs 74.8 64.0
Diluted earnings per share Rs 32.6 64.1
Price to Cash Flow x 8.5 11.4
TTM P/E ratio x 10.5 24.0
Price / Book Value ratio x 2.4 3.8
Market Cap Rs m 505,210 1,158,337
Dividends per share (Unadj.) Rs 13.0 7.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for M&M

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 1.2x during FY18, from 1.2x 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 2.7x during FY18, from 2.4x 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 improved and stood at 21.6% during FY18, from 13.6% 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 improved and stood at 20.3% during FY18, from 16.7% 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 improved and stood at 8.7% during FY18, from 6.7% 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 1.2 1.2
Debtors’ Days Days 31 34
Interest coverage x 2.4 2.7
Debt to equity ratio x 1.0 0.9
Return on assets % 6.7 8.7
Return on equity % 13.6 21.6
Return on capital employed % 16.7 20.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



To see how M&M has performed over the last 5 years, please visit here.

M&M Share Price Performance

Over the last one year, M&M share price has moved up from Rs 695.7 to Rs 932.5, registering a gain of Rs 236.8 or around 34.0%.

Meanwhile, the S&P BSE AUTO Index is trading at Rs 24,172.7 (down 0.1%). Over the last one year it has moved down from 24,323.1 to 24,172.7, a gain of 150 points (down 0.6%).

Overall, the S&P BSE SENSEX is up 18.8% over the year.

(To know more, check out historical annual results for M&M and quarterly results for M&M)

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