M&M 2019-20 Annual Report Analysis

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M&M 2019-20 Annual Report Analysis
Mon, 7 Dec

M&M has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

M&M Income Statement Analysis

  • Operating income during the year fell 9.1% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 17.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 13.2% in FY20 as against 14.5% in FY19.
  • Depreciation charges increased by 24.7% and finance costs increased by 20.8% YoY, respectively.
  • Other income declined by 2.1% YoY.
  • Net profit for the year declined by 105.3% YoY.
  • Net profit margins during the year declined from 5.7% in FY19 to 0.3% in FY20.

M&M Income Statement 2019-20

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Net Sales Rs m 1,047,207 951,791 -9.1%
Other income Rs m 10,856 10,626 -2.1%
Total Revenues Rs m 1,058,063 962,417 -9.0%
Gross profit Rs m 152,065 125,643 -17.4%
Depreciation Rs m 39,908 49,763 24.7%
Interest Rs m 50,214 60,647 20.8%
Profit before tax Rs m 72,800 25,859 -64.5%
Tax Rs m 28,540 19,756 -30.8%
Profit after tax Rs m 60,169 -3,210 -105.3%
Gross profit margin % 14.5 13.2
Effective tax rate % 39.2 76.4
Net profit margin % 5.7 -0.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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M&M Balance Sheet Analysis

  • The company's current liabilities during FY20 down at Rs 540 billion as compared to Rs 586 billion in FY19, thereby witnessing an decrease of -7.8%.
  • Long-term debt stood at Rs 523 billion as compared to Rs 435 billion during FY19, a growth of 20.2%.
  • Current assets fell 8% and stood at Rs 640 billion, while fixed assets rose 8% and stood at Rs 365 billion in FY20.
  • Overall, the total assets and liabilities for FY20 stood at Rs 1,670 billion as against Rs 1,634 billion during FY19, thereby witnessing a growth of 2%.

M&M Balance Sheet as on March 2020

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Networth Rs m 399,834 399,693 0.0
 
Current Liabilities Rs m 586,093 540,095 -7.8
Long-term Debt Rs m 435,262 522,981 20.2
Total Liabilities Rs m 1,633,916 1,670,067 2.2
 
Current assets Rs m 694,060 640,454 -7.7
Fixed Assets Rs m 337,426 365,458 8.3
Total Assets Rs m 1,633,916 1,670,067 2.2
* 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 FY20 stood at Rs -15 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY20 stood at Rs -69 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY20 stood at Rs 69 billion on a YoY basis.
  • Overall, net cash flows for the company during FY20 stood at Rs -14 billion from the Rs 17 billion net cash flows seen during FY19.

M&M Cash Flow Statement 2019-20

Particulars No. of months 12 12 % Change
Year Ending Mar-19 Mar-20
Cash Flow from Operating Activities Rs m -43,473 -14,509 -
Cash Flow from Investing Activities Rs m -71,682 -69,008 -
Cash Flow from Financing Activities Rs m 131,936 69,328 -47.5%
Net Cash Flow Rs m 16,724 -13,940 -
* 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 -2.6, an decline from the EPS of Rs 48.4 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 753.9, stands at -46.7 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.5 times, while the price to sales ratio stands at 0.6 times.
  • The company's price to cash flow (P/CF) ratio stood at 25.9 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Sales per share (Unadj.) Rs 842.4 765.6
TTM Earnings per share Rs 48.4 -2.6
Diluted earnings per share Rs 48.4 -2.6
Price to Cash Flow x 10.8 25.9
TTM P/E ratio x -46.7 -46.7
Price / Book Value ratio x 2.5 1.5
Market Cap Rs m 937,179 936,420
Dividends per share (Unadj.) Rs 8.5 2.4
* 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 FY20, from 1.2x during FY19. 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 1.4x during FY20, from 2.4x during FY19. 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 -0.8% during FY20, from 15.0% during FY20. 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 8.4% during FY20, from 16.6% during FY19. 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 3.4% during FY20, from 6.8% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Current ratio x 1.2 1.2
Debtors’ Days Days 30 27
Interest coverage x 2.4 1.4
Debt to equity ratio x 1.1 1.3
Return on assets % 6.8 3.4
Return on equity % 15.0 -0.8
Return on capital employed % 16.6 8.4
* 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 510.3 to Rs 753.9, registering a gain of Rs 243.6 or around 47.7%.

Meanwhile, the S&P BSE AUTO Index is trading at Rs 21,046.5 (up 0.1%). Over the last one year it has moved up from 17,493.1 to 21,046.5, a gain of 3,553 points (up 20.3%).

Overall, the S&P BSE SENSEX is up 11.7% over the year.

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

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