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MINDTREE LTD 2017-18 Annual Report Analysis
Sat, 31 Mar

MINDTREE 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.

MINDTREE Income Statement Analysis

  • Operating income during the year rose 4.3% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 5.1% YoY during the fiscal. Operating profit margins witnessed a fall and down at 13.6% in FY18 as against 13.5% in FY17.
  • Depreciation charges decreased by 7.7% and finance costs decreased by 11.5% YoY, respectively.
  • Other income grew by 243.9% YoY.
  • Net profit for the year grew by 36.2% YoY.
  • Net profit margins during the year grew from 8.0% in FY17 to 10.4% in FY18.

MINDTREE Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 52,364 54,628 4.3%
Other income Rs m 553 1,902 243.9%
Total Revenues Rs m 52,917 56,530 6.8%
Gross profit Rs m 7,045 7,405 5.1%
Depreciation Rs m 1,858 1,715 -7.7%
Interest Rs m 191 169 -11.5%
Profit before tax Rs m 5,549 7,423 33.8%
Tax Rs m 1,363 1,722 26.3%
Profit after tax Rs m 4,186 5,701 36.2%
Gross profit margin % 13.5 13.6
Effective tax rate % 24.6 23.2
Net profit margin % 8.0 10.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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MINDTREE Balance Sheet Analysis

  • The company's current liabilities during FY18 stood at Rs 10 billion as compared to Rs 8 billion in FY17, thereby witnessing an increase of 26.0%.
  • Long-term debt down at Rs 9 million as compared to Rs 13 million during FY17, a fall of 30.8%.
  • Current assets rose 21% and stood at Rs 25 billion, while fixed assets fell 5% and stood at Rs 12 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 37 billion as against Rs 33 billion during FY17, thereby witnessing a growth of 11%.

MINDTREE Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 25,720 27,213 5.8
 
Current Liabilities Rs m 7,821 9,857 26.0
Long-term Debt Rs m 13 9 -30.8
Total Liabilities Rs m 33,282 37,047 11.3
 
Current assets Rs m 20,610 25,031 21.5
Fixed Assets Rs m 12,672 12,016 -5.2
Total Assets Rs m 33,282 37,047 11.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



MINDTREE Cash Flow Statement Analysis

  • MINDTREE's cash flow from operating activities (CFO) during FY18 stood at Rs 6 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -2 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -3 billion on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs 767 million from the Rs 571 million net cash flows seen during FY17.

MINDTREE 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 6,535 5,644 -13.6%
Cash Flow from Investing Activities Rs m -4,533 -2,000 -
Cash Flow from Financing Activities Rs m -1,376 -2,875 -
Net Cash Flow Rs m 571 767 34.3%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for MINDTREE

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 34.8, an improvement from the EPS of Rs 24.9 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 774.0, stands at 22.4 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 4.7 times, while the price to sales ratio stands at 2.3 times.
  • The company's price to cash flow (P/CF) ratio stood at 14.5 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 311.6 333.2
TTM Earnings per share Rs 24.9 34.8
Diluted earnings per share Rs 25.4 34.6
Price to Cash Flow x 12.3 14.5
TTM P/E ratio x 18.2 22.4
Price / Book Value ratio x 3.8 3.9
Market Cap Rs m 97,287 107,208
Dividends per share (Unadj.) Rs 10.0 11.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for MINDTREE

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 2.5x during FY18, from 2.6x 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 44.9x during FY18, from 30.1x 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 20.9% during FY18, from 16.3% 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 27.9% during FY18, from 22.3% 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 15.8% during FY18, from 13.2% 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 2.6 2.5
Debtors’ Days Days 62 68
Interest coverage x 30.1 44.9
Debt to equity ratio x 0.0 0.0
Return on assets % 13.2 15.8
Return on equity % 16.3 20.9
Return on capital employed % 22.3 27.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, 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 452.4 to Rs 774.0, registering a gain of Rs 321.6 or around 71.1%.

Meanwhile, the S&P BSE IT Index is trading at Rs 12,100.6 (down 0.3%). Over the last one year it has moved up from 10,365.5 to 12,100.6, a gain of 1,735 points (up 16.7%).

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

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

Annual Report FAQs

What is the current share price of MINDTREE?

MINDTREE currently trades at Rs 3,433.4 per share. You can check out the latest share price performance of MINDTREE here...

What was the revenue of MINDTREE in FY18? How does it compare to earlier years?

The revenues of MINDTREE stood at Rs 56,530 m in FY18, which was up 6.8% compared to Rs 52,917 m reported in FY17.

MINDTREE's revenue has grown from Rs 30,812 m in FY14 to Rs 56,530 m in FY18.

Over the past 5 years, the revenue of MINDTREE has grown at a CAGR of 16.4%.

What was the net profit of MINDTREE in FY18? How does it compare to earlier years?

The net profit of MINDTREE stood at Rs 5,701 m in FY18, which was up 36.2% compared to Rs 4,186 m reported in FY17.

This compares to a net profit of Rs 5,525 m in FY16 and a net profit of Rs 5,363 m in FY15.

Over the past 5 years, MINDTREE net profit has grown at a CAGR of 6.0%.

What does the cash flow statement of MINDTREE reveal?

The cash flow statement is the financial statement that presents the cash inflows and outflows of a company during a given period of time.

This statement is one of the most useful tools for judging a company's liquidity position. The ratios and parameters in this statement helps test a company's financial health.

The cash flow statement of MINDTREE reveals:

  • Cash flow from operations decreased in FY18 and stood at Rs 5,644 m as compared to Rs 6,535 m in FY17.
  • Cash flow from investments increased in FY18 and stood at Rs -2,000 m as compared to Rs -4,533 m in FY17.
  • Cash flow from financial activity decreased in FY18 and stood at Rs -2,875 m as compared to Rs -1,376 m in FY17.

Here's the cash flow statement of MINDTREE for the past 5 years.

(Rs m)FY14FY15FY16FY17FY18
From Operations3,2195,9834,2146,5355,644
From Investments-2,244-2,098-4,257-4,533-2,000
From Financial Activity-1,113-1,376-1,720-1,376-2,875
Net Cashflow-682,579-1,671571767

What does the Key Ratio analysis of MINDTREE reveal?

Be it the company's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.

The ratio/financial analysis of MINDTREE reveals:

  • Operating profit margins witnessed a fall and down at 13.6% in FY18 as against 13.5% in FY17.
  • Net profit margins grew from 8.0% in FY17 to 10.4% in FY18.
  • Debt to Equity ratio for FY18 stood at 0.0 as compared to 0.0 in FY17.

Here's the ratio/financial analysis of MINDTREE for the past 5 years.

 FY14FY15FY16FY17FY18
Operating Profit Margin (%)20.119.917.613.513.6
Net Profit Margin (%)14.915.111.88.010.4
Debt to Equity Ratio (x)0.00.00.00.00.0

Read: Latest Annual Report Analysis of MINDTREE

 

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