MCLEOD RUSSEL 2019-20 Annual Report Analysis

Tue, 31 Mar

MCLEOD RUSSEL 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.

MCLEOD RUSSEL Income Statement Analysis

• Operating income during the year fell 33.7% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 65.8% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 7.3% in FY20 as against 14.2% in FY19.
• Depreciation charges decreased by 7.3% and finance costs decreased by 32.8% YoY, respectively.
• Other income declined by 86.8% YoY.
• Net profit for the year declined by 481.8% YoY.
• Net profit margins during the year declined from 2.3% in FY19 to 13.0% in FY20.

MCLEOD RUSSEL Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	17,229	11,430	-33.7%
Other income	Rs m	2,373	314	-86.8%
Total Revenues	Rs m	19,602	11,744	-40.1%
Gross profit	Rs m	2,451	837	-65.8%
Depreciation	Rs m	841	780	-7.3%
Interest	Rs m	3,376	2,267	-32.8%
Profit before tax	Rs m	607	-1,896	-412.4%
Tax	Rs m	219	-414	-289.2%
Profit after tax	Rs m	388	-1,482	-481.8%
Gross profit margin	%	14.2	7.3
Effective tax rate	%	36.0	21.8
Net profit margin	%	2.3	-13.0

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MCLEOD RUSSEL Balance Sheet Analysis

• The company's current liabilities during FY20 stood at Rs 31 billion as compared to Rs 24 billion in FY19, thereby witnessing an increase of 25.2%.
• Long-term debt down at Rs 2 billion as compared to Rs 2 billion during FY19, a fall of 16.6%.
• Current assets fell 37% and stood at Rs 8 billion, while fixed assets rose 24% and stood at Rs 45 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 53 billion as against Rs 49 billion during FY19, thereby witnessing a growth of 7%.

MCLEOD RUSSEL Balance Sheet as on March 2020

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Networth	Rs m	20,142	18,544	-7.9
Current Liabilities	Rs m	24,407	30,554	25.2
Long-term Debt	Rs m	2,227	1,858	-16.6
Total Liabilities	Rs m	49,189	52,871	7.5
Current assets	Rs m	12,967	8,106	-37.5
Fixed Assets	Rs m	36,222	44,765	23.6
Total Assets	Rs m	49,189	52,871	7.5

MCLEOD RUSSEL Cash Flow Statement Analysis

• MCLEOD RUSSEL's cash flow from operating activities (CFO) during FY20 stood at Rs 841 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY20 stood at Rs -7 billion, an improvement of 129.0% on a YoY basis.
• Cash flow from financial activities (CFF) during FY20 stood at Rs 4 billion, an improvement of 13% on a YoY basis.
• Overall, net cash flows for the company during FY20 stood at Rs -3 billion from the Rs 3 billion net cash flows seen during FY19.

MCLEOD RUSSEL 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	2,802	841	-70.0%
Cash Flow from Investing Activities	Rs m	-3,234	-7,404	-
Cash Flow from Financing Activities	Rs m	3,198	3,618	13.1%
Net Cash Flow	Rs m	2,766	-2,945	-

Current Valuations for MCLEOD RUSSEL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -14.2, an decline from the EPS of Rs 4.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2.1, stands at -0.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.0 times, while the price to sales ratio stands at 0.0 times.
• The company's price to cash flow (P/CF) ratio stood at -7.1 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	197.2	109.4
TTM Earnings per share	Rs	4.4	-14.2
Diluted earnings per share	Rs	3.7	-14.2
Price to Cash Flow	x	7.3	-7.1
TTM P/E ratio	x	-203.1	-0.1
Price / Book Value ratio	x	0.6	0.3
Market Cap	Rs m	11,284	5,006
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for MCLEOD RUSSEL

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.3x during FY20, from 0.5x 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 0.2x during FY20, from 1.2x 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 -8.0% during FY20, from 1.9% 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 1.8% during FY20, from 17.8% 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 1.5% during FY20, from 7.7% 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	0.5	0.3
Debtors’ Days	Days	84	110
Interest coverage	x	1.2	0.2
Debt to equity ratio	x	0.1	0.1
Return on assets	%	7.7	1.5
Return on equity	%	1.9	-8.0
Return on capital employed	%	17.8	1.8

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 85.8 to Rs 2.1, registering a loss of Rs 83.7 or around 97.6%.

Overall, the S&P BSE SENSEX is down 24.2% 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