M&M 2018-19 Annual Report Analysis

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M&M 2018-19 Annual Report Analysis
Tue, 9 Jul

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 13.7% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 15.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 14.5% in FY19 as against 14.4% 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 24.4% YoY.
  • Net profit margins during the year declined from 8.6% in FY18 to 5.7% in FY19.

M&M Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 920,940 1,047,207 13.7%
Other income Rs m 6,310 10,856 72.0%
Total Revenues Rs m 927,250 1,058,063 14.1%
Gross profit Rs m 132,261 152,065 15.0%
Depreciation Rs m 32,799 39,908 21.7%
Interest Rs m 39,871 50,214 25.9%
Profit before tax Rs m 65,901 72,800 10.5%
Tax Rs m 23,677 28,540 20.5%
Profit after tax Rs m 79,578 60,169 -24.4%
Gross profit margin % 14.4 14.5
Effective tax rate % 35.9 39.2
Net profit margin % 8.6 5.7
* 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 FY19 stood at Rs 587 billion as compared to Rs 491 billion in FY18, thereby witnessing an increase of 19.5%.
  • 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 11% and stood at Rs 337 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 1,634 billion as against Rs 1,372 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 367,752 399,834 8.7
 
Current Liabilities Rs m 491,495 587,433 19.5
Long-term Debt Rs m 338,092 435,262 28.7
Total Liabilities Rs m 1,372,109 1,633,916 19.1
 
Current assets Rs m 590,760 694,060 17.5
Fixed Assets Rs m 304,514 337,426 10.8
Total Assets Rs m 1,372,109 1,633,916 19.1
* 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 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: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for M&M

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 55.3, an decline from the EPS of Rs 64.0 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 632.5, stands at 16.4 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.2 times, while the price to sales ratio stands at 0.8 times.
  • The company's price to cash flow (P/CF) ratio stood at 9.1 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 740.8 962.6
TTM Earnings per share Rs 64.0 55.3
Diluted earnings per share Rs 64.1 48.4
Price to Cash Flow x 7.8 9.1
TTM P/E ratio x 16.4 16.4
Price / Book Value ratio x 3.8 2.2
Market Cap Rs m 786,318 785,681
Dividends per share (Unadj.) Rs 7.5 8.5
* 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 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 2.4x during FY19, from 2.7x 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 15.0% during FY19, from 21.6% 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 16.6% during FY19, from 20.3% 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 6.8% during FY19, from 8.7% 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 34 32
Interest coverage x 2.7 2.4
Debt to equity ratio x 0.9 1.1
Return on assets % 8.7 6.8
Return on equity % 21.6 15.0
Return on capital employed % 20.3 16.6
* 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 932.9 to Rs 632.5, registering a loss of Rs 300.4 or around 32.2%.

Meanwhile, the S&P BSE AUTO Index is trading at Rs 17,063.2 (down 0.4%). Over the last one year it has moved down from 24,854.9 to 17,063.2, a loss of 7,792 points (down 31.3%).

Overall, the S&P BSE SENSEX is up 7.1% over the year.

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

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