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M&M 2018-19 Annual Report Analysis
Sun, 31 Mar

M&M 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.

M&M Income Statement Analysis

  • Operating income during the year rose 15.2% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 2.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 14.7% in FY19 as against 17.4% in FY18.
  • Depreciation charges increased by 21.7% and finance costs increased by 25.9% YoY, respectively.
  • Other income grew by 72.0% YoY.
  • Net profit for the year declined by 32.1% YoY.
  • Net profit margins during the year declined from 7.5% in FY18 to 4.4% in FY19.

M&M Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 909,231 1,047,207 15.2%
Other income Rs m 6,310 10,856 72.0%
Total Revenues Rs m 915,542 1,058,063 15.6%
Gross profit Rs m 158,542 154,308 -2.7%
Depreciation Rs m 32,799 39,908 21.7%
Interest Rs m 39,871 50,214 25.9%
Profit before tax Rs m 92,183 75,043 -18.6%
Tax Rs m 23,677 28,540 20.5%
Profit after tax Rs m 68,505 46,503 -32.1%
Gross profit margin % 17.4 14.7
Effective tax rate % 25.7 38.0
Net profit margin % 7.5 4.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Read Now: We're Bullish on 2 Non-Nifty Stocks

M&M Balance Sheet Analysis

  • The company's current liabilities during FY19 stood at Rs 586 billion as compared to Rs 491 billion in FY18, thereby witnessing an increase of 19.2%.
  • Long-term debt stood at Rs 435 billion as compared to Rs 338 billion during FY18, a growth of 28.7%.
  • Current assets rose 17% and stood at Rs 694 billion, while fixed assets rose 20% and stood at Rs 925 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 1,619 billion as against Rs 1,364 billion during FY18, thereby witnessing a growth of 19%.

M&M Balance Sheet as on March 2019

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 365,459 397,495 8.8
 
Current Liabilities Rs m 491,495 586,093 19.2
Long-term Debt Rs m 338,092 435,262 28.7
Total Liabilities Rs m 1,363,693 1,618,887 18.7
 
Current assets Rs m 590,760 694,060 17.5
Fixed Assets Rs m 772,933 924,826 19.7
Total Assets Rs m 1,363,693 1,618,887 18.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



M&M Cash Flow Statement Analysis

  • M&M's cash flow from operating activities (CFO) during FY19 stood at Rs -43 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs -72 billion, an improvement of 31.1% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY19 stood at Rs 132 billion, an improvement of 109% on a YoY basis.
  • Overall, net cash flows for the company during FY19 stood at Rs 17 billion from the Rs 15 billion net cash flows seen during FY18.

M&M 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 6,819 -43,473 -
Cash Flow from Investing Activities Rs m -54,679 -71,682 -
Cash Flow from Financing Activities Rs m 63,145 131,936 108.9%
Net Cash Flow Rs m 15,291 16,724 9.4%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for M&M

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 42.7, an decline from the EPS of Rs 63.1 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 671.8, stands at 17.4 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.1 times, while the price to sales ratio stands at 0.7 times.
  • The company's price to cash flow (P/CF) ratio stood at 10.1 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 837.0 962.6
TTM Earnings per share Rs 63.1 42.7
Diluted earnings per share Rs 55.1 37.4
Price to Cash Flow x 9.1 10.1
TTM P/E ratio x 21.0 17.4
Price / Book Value ratio x 3.4 2.2
Market Cap Rs m 1,233,668 874,576
Dividends per share (Unadj.) Rs 7.5 8.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for M&M

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 1.2x during FY19, from 1.2x 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 2.5x during FY19, from 3.3x 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 11.7% during FY19, from 18.7% 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 15.0% during FY19, from 18.8% 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 6.0% during FY19, from 7.9% 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 1.2 1.2
Debtors’ Days Days 3 3
Interest coverage x 3.3 2.5
Debt to equity ratio x 0.9 1.1
Return on assets % 7.9 6.0
Return on equity % 18.7 11.7
Return on capital employed % 18.8 15.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, 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 down from Rs 740.2 to Rs 671.8, registering a loss of Rs 68.4 or around 9.2%.

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 M&M and quarterly results for M&M)

Annual Report FAQs

What is the current share price of M&M?

M&M currently trades at Rs 1,921.4 per share. You can check out the latest share price performance of M&M here...

What was the revenue of M&M in FY19? How does it compare to earlier years?

The revenues of M&M stood at Rs 1,058,063 m in FY19, which was up 15.6% compared to Rs 915,542 m reported in FY18.

M&M's revenue has grown from Rs 684,591 m in FY15 to Rs 1,058,063 m in FY19.

Over the past 5 years, the revenue of M&M has grown at a CAGR of 11.5%.

What was the net profit of M&M in FY19? How does it compare to earlier years?

The net profit of M&M stood at Rs 46,503 m in FY19, which was down -32.1% compared to Rs 68,505 m reported in FY18.

This compares to a net profit of Rs 31,511 m in FY17 and a net profit of Rs 27,085 m in FY16.

Over the past 5 years, M&M net profit has grown at a CAGR of 15.7%.

What does the cash flow statement of M&M reveal?

The cash flow statement is the financial statement that presents the cash inflows and outflows of a company during a given period of time.

This statement is one of the most useful tools for judging a company's liquidity position. The ratios and parameters in this statement helps test a company's financial health.

The cash flow statement of M&M reveals:

  • Cash flow from operations decreased in FY19 and stood at Rs -43,473 m as compared to Rs 6,819 m in FY18.
  • Cash flow from investments decreased in FY19 and stood at Rs -71,682 m as compared to Rs -54,679 m in FY18.
  • Cash flow from financial activity increased in FY19 and stood at Rs 131,936 m as compared to Rs 63,145 m in FY18.

Here's the cash flow statement of M&M for the past 5 years.

(Rs m)FY15FY16FY17FY18FY19
From Operations10,54923,8481,8316,819-43,473
From Investments-41,649-57,985-58,754-54,679-71,682
From Financial Activity16,69429,66861,08063,145131,936
Net Cashflow-16,332-1,5444,15815,29116,724

What does the Key Ratio analysis of M&M reveal?

Be it the company's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.

The ratio/financial analysis of M&M reveals:

  • Operating profit margins witnessed a fall and stood at 14.7% in FY19 as against 17.4% in FY18.
  • Net profit margins declined from 7.5% in FY18 to 4.4% in FY19.
  • Debt to Equity ratio for FY19 stood at 1.1 as compared to 0.9 in FY18.

Here's the ratio/financial analysis of M&M for the past 5 years.

 FY15FY16FY17FY18FY19
Operating Profit Margin (%)13.314.214.217.414.7
Net Profit Margin (%)3.83.84.07.54.4
Debt to Equity Ratio (x)0.90.91.00.91.1

Read: Latest Annual Report Analysis of M&M

 

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