MOTILAL OSWAL 2017-18 Annual Report Analysis

Sat, 31 Mar

MOTILAL OSWAL 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.

MOTILAL OSWAL Income Statement Analysis

• Operating income during the year rose 49.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 55.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 50.7% in FY18 as against 48.8% in FY17.
• Depreciation charges increased by 14.2% and finance costs increased by 19.5% YoY, respectively.
• Other income declined by 98.1% YoY.
• Net profit for the year grew by 71.0% YoY.
• Net profit margins during the year grew from 19.8% in FY17 to 22.7% in FY18.

MOTILAL OSWAL Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	18,409	27,507	49.4%
Other income	Rs m	828	16	-98.1%
Total Revenues	Rs m	19,237	27,523	43.1%
Gross profit	Rs m	8,980	13,934	55.2%
Depreciation	Rs m	328	375	14.2%
Interest	Rs m	4,423	5,284	19.5%
Profit before tax	Rs m	5,056	8,291	64.0%
Tax	Rs m	1,411	2,059	45.9%
Profit after tax	Rs m	3,645	6,232	71.0%
Gross profit margin	%	48.8	50.7
Effective tax rate	%	27.9	24.8
Net profit margin	%	19.8	22.7

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MOTILAL OSWAL Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 51 billion as compared to Rs 28 billion in FY17, thereby witnessing an increase of 79.6%.
• Long-term debt down at Rs 23 billion as compared to Rs 37 billion during FY17, a fall of 38.3%.
• Current assets rose 180% and stood at Rs 75 billion, while fixed assets fell 49% and stood at Rs 30 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 104 billion as against Rs 84 billion during FY17, thereby witnessing a growth of 23%.

MOTILAL OSWAL Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	17,854	28,527	59.8
Current Liabilities	Rs m	28,498	51,180	79.6
Long-term Debt	Rs m	37,034	22,852	-38.3
Total Liabilities	Rs m	84,389	104,113	23.4
Current assets	Rs m	26,579	74,509	180.3
Fixed Assets	Rs m	57,811	29,603	-48.8
Total Assets	Rs m	84,389	104,113	23.4

MOTILAL OSWAL Cash Flow Statement Analysis

• MOTILAL OSWAL's cash flow from operating activities (CFO) during FY18 stood at Rs 2 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 -980 million on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -71 million from the Rs 1 billion net cash flows seen during FY17.

MOTILAL OSWAL 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	-19,805	2,476	-
Cash Flow from Investing Activities	Rs m	-3,142	-1,567	-
Cash Flow from Financing Activities	Rs m	24,200	-980	-
Net Cash Flow	Rs m	1,253	-71	-

Current Valuations for MOTILAL OSWAL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 43.0, an improvement from the EPS of Rs 25.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,005.9, stands at 27.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.3 times, while the price to sales ratio stands at 5.3 times.
• The company's price to cash flow (P/CF) ratio stood at 25.5 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	127.4	189.6
TTM Earnings per share	Rs	25.2	43.0
Diluted earnings per share	Rs	24.5	41.8
Price to Cash Flow	x	27.3	25.5
TTM P/E ratio	x	31.1	27.7
Price / Book Value ratio	x	4.1	5.9
Market Cap	Rs m	73,948	168,232
Dividends per share (Unadj.)	Rs	2.5	8.5

Ratio Analysis for MOTILAL OSWAL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.5x during FY18, from 0.9x 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 2.6x during FY18, from 2.1x 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 21.8% during FY18, from 20.4% 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 26.4% during FY18, from 17.3% 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 11.1% during FY18, from 9.6% 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	0.9	1.5
Debtors’ Days	Days	2,499	1,449
Interest coverage	x	2.1	2.6
Debt to equity ratio	x	2.1	0.8
Return on assets	%	9.6	11.1
Return on equity	%	20.4	21.8
Return on capital employed	%	17.3	26.4

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

MOTILAL OSWAL Share Price Performance

Over the last one year, MOTILAL OSWAL share price has moved up from Rs 728.1 to Rs 1,005.9, registering a gain of Rs 277.9 or around 38.2%.

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

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

Read: Latest Annual Report Analysis of MOTILAL OSWAL