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MCLEOD RUSSEL 2017-18 Annual Report Analysis

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MCLEOD RUSSEL 2017-18 Annual Report Analysis
Tue, 18 Dec

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 29.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 6.9% 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 113.2% YoY.
  • Net profit for the year grew by 240.0% YoY.
  • Net profit margins during the year grew from 3.1% in FY17 to 9.0% 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 1,838 3,918 113.2%
Total Revenues Rs m 20,546 24,471 19.1%
Gross profit Rs m 1,102 1,423 29.2%
Depreciation Rs m 1,035 1,022 -1.3%
Interest Rs m 1,359 1,804 32.7%
Profit before tax Rs m 545 2,516 361.3%
Tax Rs m -99 324 -426.5%
Profit after tax Rs m 645 2,192 240.0%
Gross profit margin % 5.9 6.9
Effective tax rate % -18.2 12.9
Net profit margin % 3.1 9.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 fell 0% and stood at Rs 22 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 2,264 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 22,285 22,267 -0.1
Total Assets Rs m 34,519 38,428 11.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 58.8% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -2 billion, an improvement of 145.8% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -275 million, an improvement of 57% 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 2,179 58.8%
Cash Flow from Investing Activities Rs m -681 -1,675 -
Cash Flow from Financing Activities Rs m -645 -275 -
Net Cash Flow Rs m 46 228 400.9%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for MCLEOD RUSSEL

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 20.0, an improvement from the EPS of Rs 5.9 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 116.8, stands at 6.9 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.0 times, while the price to sales ratio stands at 1.0 times.
  • The company's price to cash flow (P/CF) ratio stood at 4.0 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 170.9 187.8
TTM Earnings per share Rs 5.9 20.0
Diluted earnings per share Rs 5.9 20.0
Price to Cash Flow x 7.6 4.0
TTM P/E ratio x 6.9 6.9
Price / Book Value ratio x 1.0 1.0
Market Cap Rs m 12,779 12,779
Dividends per share (Unadj.) Rs 0.3 0.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 deteriorated 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 21 22
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
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 up from Rs 200.5 to Rs 116.8, registering a loss of Rs 83.8 or around 41.8%.

Overall, the S&P BSE SENSEX is up 7.4% over the year.

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

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For the quarter ended December 2018, MCLEOD RUSSEL has posted a net profit of Rs 536 m (down 20.6% YoY). Sales on the other hand came in at Rs 5 bn (down 16.4% YoY). Read on for a complete analysis of MCLEOD RUSSEL's quarterly results.

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