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MINDTREE 2018-19 Annual Report Analysis

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MINDTREE 2018-19 Annual Report Analysis
Mon, 24 Jun

MINDTREE 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.

MINDTREE Income Statement Analysis

  • Operating income during the year rose 28.5% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 43.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 15.2% in FY19 as against 13.6% in FY18.
  • Depreciation charges decreased by 4.3% and finance costs decreased by 82.8% YoY, respectively.
  • Other income declined by 53.0% YoY.
  • Net profit for the year grew by 32.3% YoY.
  • Net profit margins during the year grew from 10.1% in FY18 to 10.6% in FY19.

MINDTREE Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 54,628 70,215 28.5%
Other income Rs m 1,902 893 -53.0%
Total Revenues Rs m 56,530 71,108 25.8%
Gross profit Rs m 7,405 10,645 43.8%
Depreciation Rs m 1,715 1,641 -4.3%
Interest Rs m 169 29 -82.8%
Profit before tax Rs m 7,423 9,868 32.9%
Tax Rs m 1,722 2,327 35.1%
Profit after tax Rs m 5,701 7,541 32.3%
Gross profit margin % 13.6 15.2
Effective tax rate % 23.2 23.6
Net profit margin % 10.1 10.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



MINDTREE Balance Sheet Analysis

  • The company's current liabilities during FY19 down at Rs 9 billion as compared to Rs 10 billion in FY18, thereby witnessing an decrease of -13.3%.
  • Long-term debt down at Rs 5 million as compared to Rs 9 million during FY18, a fall of 44.4%.
  • Current assets rose 11% and stood at Rs 28 billion, while fixed assets rose 3% and stood at Rs 10 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 42 billion as against Rs 37 billion during FY18, thereby witnessing a growth of 12%.

MINDTREE Balance Sheet as on March 2019

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 27,414 33,061 20.6
 
Current Liabilities Rs m 9,857 8,550 -13.3
Long-term Debt Rs m 9 5 -44.4
Total Liabilities Rs m 37,365 41,790 11.8
 
Current assets Rs m 25,031 27,672 10.6
Fixed Assets Rs m 9,660 9,966 3.2
Total Assets Rs m 37,365 41,790 11.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



MINDTREE Cash Flow Statement Analysis

  • MINDTREE's cash flow from operating activities (CFO) during FY19 stood at Rs 6 billion, an improvement of 11.7% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs -2 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY19 stood at Rs -5 billion on a YoY basis.
  • Overall, net cash flows for the company during FY19 stood at Rs -716 million from the Rs 767 million net cash flows seen during FY18.

MINDTREE 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 5,644 6,305 11.7%
Cash Flow from Investing Activities Rs m -2,000 -1,933 -
Cash Flow from Financing Activities Rs m -2,875 -5,221 -
Net Cash Flow Rs m 767 -716 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for MINDTREE

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 45.9, an improvement from the EPS of Rs 34.8 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 962.1, stands at 21.8 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 4.8 times, while the price to sales ratio stands at 2.3 times.
  • The company's price to cash flow (P/CF) ratio stood at 17.9 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 333.2 427.6
TTM Earnings per share Rs 34.8 45.9
Diluted earnings per share Rs 33.3 44.1
Price to Cash Flow x 21.3 17.9
TTM P/E ratio x 20.9 21.8
Price / Book Value ratio x 3.9 4.8
Market Cap Rs m 157,709 164,664
Dividends per share (Unadj.) Rs 9.0 33.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for MINDTREE

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 3.2x during FY19, from 2.5x 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 improved and stood at 341.3x during FY19, from 44.9x 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 improved and stood at 22.8% during FY19, from 20.8% 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 improved and stood at 29.9% during FY19, from 27.7% 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 improved and stood at 18.1% during FY19, from 15.7% 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 2.5 3.2
Debtors’ Days Days 68 69
Interest coverage x 44.9 341.3
Debt to equity ratio x 0.0 0.0
Return on assets % 15.7 18.1
Return on equity % 20.8 22.8
Return on capital employed % 27.7 29.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

MINDTREE Share Price Performance

Over the last one year, MINDTREE share price has moved up from Rs 985.7 to Rs 962.1, registering a loss of Rs 23.6 or around 2.4%.

Meanwhile, the S&P BSE IT Index is trading at Rs 15,893.3 (down 0.2%). Over the last one year it has moved up from 13,623.9 to 15,893.3, a gain of 2,269 points (up 16.7%).

Overall, the S&P BSE SENSEX is up 10.3% over the year.

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

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