MMTC 2019-20 Annual Report Analysis

Tue, 31 Mar

MMTC 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.

MMTC Income Statement Analysis

• Operating income during the year fell 10.6% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 160.7% YoY during the fiscal. Operating profit margins witnessed a growth and stood at 0.4% in FY20 as against 0.6% in FY19.
• Depreciation charges increased by 14.2% and finance costs increased by 112.9% YoY, respectively.
• Other income grew by 73.5% YoY.
• Net profit for the year declined by 363.2% YoY.
• Net profit margins during the year declined from 0.3% in FY19 to 0.8% in FY20.

MMTC Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	294,397	263,047	-10.6%
Other income	Rs m	209	363	73.5%
Total Revenues	Rs m	294,606	263,410	-10.6%
Gross profit	Rs m	1,734	-1,053	-160.7%
Depreciation	Rs m	57	65	14.2%
Interest	Rs m	677	1,441	112.9%
Profit before tax	Rs m	1,209	-2,196	-281.6%
Tax	Rs m	372	9	-97.6%
Profit after tax	Rs m	838	-2,205	-363.2%
Gross profit margin	%	0.6	-0.4
Effective tax rate	%	30.7	-0.4
Net profit margin	%	0.3	-0.8

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MMTC Balance Sheet Analysis

• The company's current liabilities during FY20 stood at Rs 53 billion as compared to Rs 29 billion in FY19, thereby witnessing an increase of 81.6%.
• Long-term debt stood at Rs 2 billion as compared to Rs 0 million during FY19, a fall of 0.0%.
• Current assets rose 54% and stood at Rs 60 billion, while fixed assets fell 24% and stood at Rs 2 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 62 billion as against Rs 41 billion during FY19, thereby witnessing a growth of 49%.

MMTC Balance Sheet as on March 2020

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Networth	Rs m	12,687	8,835	-30.4
Current Liabilities	Rs m	29,225	53,088	81.6
Long-term Debt	Rs m	0	1,667	0.0
Total Liabilities	Rs m	41,490	61,794	48.9
Current assets	Rs m	38,786	59,730	54.0
Fixed Assets	Rs m	2,704	2,064	-23.7
Total Assets	Rs m	41,490	61,794	48.9

MMTC Cash Flow Statement Analysis

• MMTC's cash flow from operating activities (CFO) during FY20 stood at Rs -26 billion, an improvement of 606.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY20 stood at Rs -581 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY20 stood at Rs 27 billion, an improvement of 692% on a YoY basis.
• Overall, net cash flows for the company during FY20 stood at Rs 421 million from the Rs -185 million net cash flows seen during FY19.

MMTC 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	-3,666	-25,883	-
Cash Flow from Investing Activities	Rs m	87	-581	-
Cash Flow from Financing Activities	Rs m	3,394	26,885	692.2%
Net Cash Flow	Rs m	-185	421	-

Current Valuations for MMTC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -1.5, an decline from the EPS of Rs 0.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 12.4, stands at -8.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.1 times, while the price to sales ratio stands at 0.1 times.
• The company's price to cash flow (P/CF) ratio stood at -13.9 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	196.3	175.4
TTM Earnings per share	Rs	0.6	-1.5
Diluted earnings per share	Rs	0.6	-1.5
Price to Cash Flow	x	47.0	-13.9
TTM P/E ratio	x	51.6	-8.4
Price / Book Value ratio	x	5.6	3.4
Market Cap	Rs m	70,613	29,663
Dividends per share (Unadj.)	Rs	0.3	0.0

Ratio Analysis for MMTC

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.1x during FY20, from 1.3x 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 -0.5x during FY20, from 2.8x 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 -25.0% during FY20, from 6.6% 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 -7.2% during FY20, from 14.9% 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 -1.2% during FY20, from 3.7% 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	1.3	1.1
Debtors’ Days	Days	1	3
Interest coverage	x	2.8	-0.5
Debt to equity ratio	x	0.0	0.2
Return on assets	%	3.7	-1.2
Return on equity	%	6.6	-25.0
Return on capital employed	%	14.9	-7.2

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

MMTC Share Price Performance

Over the last one year, MMTC share price has moved down from Rs 28.0 to Rs 12.4, registering a loss of Rs 15.7 or around 55.9%.

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

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

Read: Latest Annual Report Analysis of MMTC