MOTHERSON SUMI 2018-19 Annual Report Analysis

Thu, 1 Aug

MOTHERSON SUMI has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

MOTHERSON SUMI Income Statement Analysis

• Operating income during the year rose 12.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 4.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 8.4% in FY19 as against 9.1% in FY18.
• Depreciation charges increased by 30.7% and finance costs increased by 3.0% YoY, respectively.
• Other income grew by 29.5% YoY.
• Net profit for the year declined by 7.2% YoY.
• Net profit margins during the year declined from 4.0% in FY18 to 3.3% in FY19.

MOTHERSON SUMI Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	562,933	635,229	12.8%
Other income	Rs m	1,701	2,202	29.5%
Total Revenues	Rs m	564,634	637,431	12.9%
Gross profit	Rs m	51,226	53,484	4.4%
Depreciation	Rs m	15,752	20,582	30.7%
Interest	Rs m	4,108	4,232	3.0%
Profit before tax	Rs m	33,067	30,872	-6.6%
Tax	Rs m	10,072	11,022	9.4%
Profit after tax	Rs m	22,599	20,981	-7.2%
Gross profit margin	%	9.1	8.4
Effective tax rate	%	30.5	35.7
Net profit margin	%	4.0	3.3

MOTHERSON SUMI Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 189 billion as compared to Rs 153 billion in FY18, thereby witnessing an increase of 23.2%.
• Long-term debt stood at Rs 81 billion as compared to Rs 76 billion during FY18, a growth of 7.0%.
• Current assets rose 17% and stood at Rs 199 billion, while fixed assets rose 19% and stood at Rs 152 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 433 billion as against Rs 375 billion during FY18, thereby witnessing a growth of 16%.

MOTHERSON SUMI Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	98,841	109,627	10.9
Current Liabilities	Rs m	153,342	188,906	23.2
Long-term Debt	Rs m	75,701	80,995	7.0
Total Liabilities	Rs m	374,977	433,302	15.6
Current assets	Rs m	171,001	199,496	16.7
Fixed Assets	Rs m	128,527	152,306	18.5
Total Assets	Rs m	374,977	433,302	15.6

MOTHERSON SUMI Cash Flow Statement Analysis

• MOTHERSON SUMI's cash flow from operating activities (CFO) during FY19 stood at Rs 43 billion, an improvement of 32.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -33 billion, an improvement of 3.6% on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -2 billion, an improvement of 90% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 8 billion from the Rs -22 billion net cash flows seen during FY18.

MOTHERSON SUMI Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	32,640	43,124	32.1%
Cash Flow from Investing Activities	Rs m	-31,941	-33,105	-
Cash Flow from Financing Activities	Rs m	-22,214	-2,246	-
Net Cash Flow	Rs m	-21,515	7,773	-

Current Valuations for MOTHERSON SUMI

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 6.6, an decline from the EPS of Rs 10.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 105.0, stands at 16.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 7.0 times, while the price to sales ratio stands at 1.2 times.
• The company's price to cash flow (P/CF) ratio stood at 8.2 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	267.4	201.2
TTM Earnings per share	Rs	10.7	6.6
Diluted earnings per share	Rs	7.2	6.6
Price to Cash Flow	x	6.0	8.2
TTM P/E ratio	x	11.0	16.5
Price / Book Value ratio	x	8.5	7.0
Market Cap	Rs m	221,055	331,510
Dividends per share (Unadj.)	Rs	2.3	1.5

Ratio Analysis for MOTHERSON SUMI

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.1x during FY19, from 1.1x during FY18. 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 8.3x during FY19, from 9.0x during FY18. 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 19.1% during FY19, from 22.9% during FY19. 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 19.0% during FY19, from 21.1% during FY18. 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 5.8% during FY19, from 7.1% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	1.1	1.1
Debtors’ Days	Days	36	35
Interest coverage	x	9.0	8.3
Debt to equity ratio	x	0.8	0.7
Return on assets	%	7.1	5.8
Return on equity	%	22.9	19.1
Return on capital employed	%	21.1	19.0

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

MOTHERSON SUMI Share Price Performance

Over the last one year, MOTHERSON SUMI share price has moved down from Rs 210.3 to Rs 105.0, registering a loss of Rs 105.3 or around 50.1%.

Overall, the S&P BSE SENSEX is down 1.7% over the year.

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