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MASTEK 2017-18 Annual Report Analysis

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MASTEK 2017-18 Annual Report Analysis
Tue, 21 Aug

MASTEK 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.

MASTEK Income Statement Analysis

  • Operating income during the year rose 45.9% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 105.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 12.2% in FY18 as against 8.7% in FY17.
  • Depreciation charges and finance costs increased by 25.7% YoY and 55.4% YoY, respectively.
  • Other income grew by 66.6% YoY.
  • Net profit for the year grew by 115.9% YoY.
  • Net profit margins during the year grew from 5.7% in FY17 to 8.3% in FY18.

MASTEK Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 5,602 8,172 45.9%
Other income Rs m 126 210 66.6%
Total Revenues Rs m 5,728 8,382 46.3%
Gross profit Rs m 486 997 105.2%
Depreciation Rs m 149 188 25.7%
Interest Rs m 38 59 55.4%
Profit before tax Rs m 425 960 126.2%
Tax Rs m 67 261 292.0%
Profit after tax Rs m 324 700 115.9%
Gross profit margin % 8.7 12.2
Effective tax rate % 15.7 27.1
Net profit margin % 5.7 8.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



MASTEK Balance Sheet Analysis

  • The company's current liabilities during FY18 stood at Rs 2 billion as compared to Rs 1 billion in FY17, thereby witnessing an increase of 54.4%.
  • Long-term debt down at Rs 496 million as compared to Rs 652 million during FY17, a fall of 23.9%.
  • Current assets rose 34% and stood at Rs 4 billion, while fixed assets rose 37% and stood at Rs 2 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 8 billion as against Rs 7 billion during FY17, thereby witnessing a growth of 15%.

MASTEK Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 4,691 5,493 17.1
 
Current Liabilities Rs m 1,226 1,893 54.4
Long-term Debt Rs m 652 496 -23.9
Total Liabilities Rs m 7,315 8,400 14.8
 
Current assets Rs m 3,200 4,284 33.9
Fixed Assets Rs m 1,324 1,809 36.7
Total Assets Rs m 7,315 8,400 14.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



MASTEK Cash Flow Statement Analysis

  • MASTEK's cash flow from operating activities (CFO) during FY18 stood at Rs 641 million, an improvement of 49.6% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -237 million on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -68 million on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs 400 million from the Rs -195 million net cash flows seen during FY17.

MASTEK 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 429 641 49.6%
Cash Flow from Investing Activities Rs m -1,190 -237 -
Cash Flow from Financing Activities Rs m 646 -68 -
Net Cash Flow Rs m -195 400 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for MASTEK

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 29.5, an improvement from the EPS of Rs 13.9 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 534.4, stands at 18.6 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.7 times, while the price to sales ratio stands at 1.1 times.
  • The company's price to cash flow (P/CF) ratio stood at 16.3 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 239.4 344.8
TTM Earnings per share Rs 13.9 29.5
Diluted earnings per share Rs 12.0 25.9
Price to Cash Flow x 26.4 16.3
TTM P/E ratio x 16.1 18.6
Price / Book Value ratio x 0.8 1.7
Market Cap Rs m 12,504 14,443
Dividends per share (Unadj.) Rs 3.5 6.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for MASTEK

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 2.3x during FY18, from 2.6x 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 17.4x during FY18, from 12.3x 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 improved and stood at 12.7% during FY18, from 6.9% 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 17.0% during FY18, from 8.0% 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 9.0% during FY18, from 4.9% 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 2.6 2.3
Debtors’ Days Days 55 60
Interest coverage x 12.3 17.4
Debt to equity ratio x 0.1 0.1
Return on assets % 4.9 9.0
Return on equity % 6.9 12.7
Return on capital employed % 8.0 17.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

MASTEK Share Price Performance

Over the last one year, MASTEK share price has moved up from Rs 274.1 to Rs 534.4, registering a gain of Rs 260.3 or around 94.9%.

Meanwhile, the S&P BSE IT Index is trading at Rs 14,958.9 (up 0.4%). Over the last one year it has moved up from 9,875.8 to 14,958.9, a gain of 5,083 points (up 51.5%).

Overall, the S&P BSE SENSEX is up 22.4% over the year.

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

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