MMTC 2017-18 Annual Report Analysis

Sat, 31 Mar

MMTC 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.

MMTC Income Statement Analysis

• Operating income during the year rose 39.1% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 79.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 0.1% in FY18 as against 0.6% in FY17.
• Depreciation charges decreased by 21.2% and finance costs decreased by 21.7% YoY, respectively.
• Other income grew by 1.8% YoY.
• Net profit for the year declined by 54.3% YoY.
• Net profit margins during the year declined from 0.5% in FY17 to 0.2% in FY18.

MMTC Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	118,268	164,510	39.1%
Other income	Rs m	449	457	1.8%
Total Revenues	Rs m	118,717	164,966	39.0%
Gross profit	Rs m	655	134	-79.5%
Depreciation	Rs m	68	54	-21.2%
Interest	Rs m	221	173	-21.7%
Profit before tax	Rs m	814	364	-55.3%
Tax	Rs m	242	102	-57.8%
Profit after tax	Rs m	572	262	-54.3%
Gross profit margin	%	0.6	0.1
Effective tax rate	%	29.7	28.1
Net profit margin	%	0.5	0.2

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MMTC Balance Sheet Analysis

• The company's current liabilities during FY18 down at Rs 38 billion as compared to Rs 45 billion in FY17, thereby witnessing an decrease of -15.1%.
• Current assets fell 10% and stood at Rs 47 billion, while fixed assets fell 35% and stood at Rs 3 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 49 billion as against Rs 56 billion during FY17, thereby witnessing a fall of 12%.

MMTC Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	12,007	12,027	0.2
Current Liabilities	Rs m	44,594	37,856	-15.1
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	56,152	49,368	-12.1
Current assets	Rs m	51,888	46,616	-10.2
Fixed Assets	Rs m	4,264	2,752	-35.5
Total Assets	Rs m	56,152	49,368	-12.1

MMTC Cash Flow Statement Analysis

• MMTC's cash flow from operating activities (CFO) during FY18 stood at Rs -5 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs 1 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs 264 million on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -3 billion from the Rs 3 billion net cash flows seen during FY17.

MMTC 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	2,729	-4,551	-
Cash Flow from Investing Activities	Rs m	-676	1,169	-
Cash Flow from Financing Activities	Rs m	1,098	264	-76.0%
Net Cash Flow	Rs m	3,151	-3,119	-

Current Valuations for MMTC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.3, 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 55.7, stands at 170.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.9 times, while the price to sales ratio stands at 0.3 times.
• The company's price to cash flow (P/CF) ratio stood at 233.3 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	118.3	164.5
TTM Earnings per share	Rs	0.6	0.3
Diluted earnings per share	Rs	0.4	0.2
Price to Cash Flow	x	145.2	233.3
TTM P/E ratio	x	157.8	170.9
Price / Book Value ratio	x	4.5	6.1
Market Cap	Rs m	54,425	73,550
Dividends per share (Unadj.)	Rs	0.3	0.3

Ratio Analysis for MMTC

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.2x during FY18, from 1.2x 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 deteriorated and stood at 3.1x during FY18, from 4.7x 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 declined and down at 2.2% during FY18, from 4.8% 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 declined and down at 4.5% during FY18, from 8.6% 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 declined and down at 0.9% during FY18, from 1.4% 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	1.2	1.2
Debtors’ Days	Days	2	1
Interest coverage	x	4.7	3.1
Debt to equity ratio	x	0.0	0.0
Return on assets	%	1.4	0.9
Return on equity	%	4.8	2.2
Return on capital employed	%	8.6	4.5

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 62.0 to Rs 55.7, registering a loss of Rs 6.3 or around 10.2%.

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