MCLEOD RUSSEL 2017-18 Annual Report Analysis

Sat, 31 Mar

MCLEOD RUSSEL 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.

MCLEOD RUSSEL 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 27.1% YoY during the fiscal. Operating profit margins witnessed a fall and down at 6.8% in FY18 as against 5.9% in FY17.
• Depreciation charges decreased by 1.3% and finance costs increased by 32.7% YoY, respectively.
• Other income grew by 114.6% YoY.
• Net profit for the year grew by 240.0% YoY.
• Net profit margins during the year grew from 3.4% in FY17 to 10.7% in FY18.

MCLEOD RUSSEL Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	18,708	20,553	9.9%
Other income	Rs m	1,835	3,938	114.6%
Total Revenues	Rs m	20,543	24,491	19.2%
Gross profit	Rs m	1,104	1,404	27.1%
Depreciation	Rs m	1,035	1,022	-1.3%
Interest	Rs m	1,359	1,804	32.7%
Profit before tax	Rs m	545	2,515	361.3%
Tax	Rs m	-99	324	-426.6%
Profit after tax	Rs m	644	2,192	240.0%
Gross profit margin	%	5.9	6.8
Effective tax rate	%	-18.2	12.9
Net profit margin	%	3.4	10.7

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MCLEOD RUSSEL Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 10 billion as compared to Rs 10 billion in FY17, thereby witnessing an increase of 2.6%.
• Long-term debt stood at Rs 4 billion as compared to Rs 2 billion during FY17, a growth of 80.2%.
• Current assets rose 32% and stood at Rs 14 billion, while fixed assets rose 2% and stood at Rs 24 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 38 billion as against Rs 35 billion during FY17, thereby witnessing a growth of 11%.

MCLEOD RUSSEL Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	19,588	21,674	10.6
Current Liabilities	Rs m	10,063	10,321	2.6
Long-term Debt	Rs m	2,263	4,079	80.2
Total Liabilities	Rs m	34,519	38,428	11.3
Current assets	Rs m	10,932	14,403	31.8
Fixed Assets	Rs m	23,587	24,026	1.9
Total Assets	Rs m	34,519	38,428	11.3

MCLEOD RUSSEL Cash Flow Statement Analysis

• MCLEOD RUSSEL's cash flow from operating activities (CFO) during FY18 stood at Rs 2 billion, an improvement of 43.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -1 billion, an improvement of 116.2% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -262 million, an improvement of 59% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 228 million from the Rs 46 million net cash flows seen during FY17.

MCLEOD RUSSEL 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	1,372	1,963	43.1%
Cash Flow from Investing Activities	Rs m	-681	-1,473	-
Cash Flow from Financing Activities	Rs m	-645	-262	-
Net Cash Flow	Rs m	46	228	400.3%

Current Valuations for MCLEOD RUSSEL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 23.7, an improvement from the EPS of Rs 7.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 142.9, stands at 22.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.7 times, while the price to sales ratio stands at 0.6 times.
• The company's price to cash flow (P/CF) ratio stood at 5.5 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	227.1	222.5
TTM Earnings per share	Rs	7.8	23.7
Diluted earnings per share	Rs	6.2	21.0
Price to Cash Flow	x	10.3	5.5
TTM P/E ratio	x	56.8	22.2
Price / Book Value ratio	x	0.8	0.8
Market Cap	Rs m	14,692	17,817
Dividends per share (Unadj.)	Rs	0.3	0.5

Ratio Analysis for MCLEOD RUSSEL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x during FY18, from 1.1x 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 improved and stood at 2.4x during FY18, from 1.4x 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 10.1% during FY18, from 3.3% 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 16.8% during FY18, from 8.7% 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 10.4% during FY18, from 5.8% 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	1.1	1.4
Debtors’ Days	Days	212	224
Interest coverage	x	1.4	2.4
Debt to equity ratio	x	0.1	0.2
Return on assets	%	5.8	10.4
Return on equity	%	3.3	10.1
Return on capital employed	%	8.7	16.8

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

MCLEOD RUSSEL Share Price Performance

Over the last one year, MCLEOD RUSSEL share price has moved down from Rs 166.0 to Rs 142.9, registering a loss of Rs 23.1 or around 13.9%.

Overall, the S&P BSE SENSEX is up 12.1% over the year.

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

Read: Latest Annual Report Analysis of MCLEOD RUSSEL