MRF. 2019-20 Annual Report Analysis

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MRF. 2019-20 Annual Report Analysis
Tue, 8 Dec

MRF. 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.

MRF. Income Statement Analysis

  • Operating income during the year rose 1.1% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 3.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 14.6% in FY20 as against 14.4% in FY19.
  • Depreciation charges increased by 21.6% and finance costs increased by 9.5% YoY, respectively.
  • Other income declined by 20.5% YoY.
  • Net profit for the year grew by 25.8% YoY.
  • Net profit margins during the year grew from 6.9% in FY19 to 8.6% in FY20.

MRF. Income Statement 2019-20

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Net Sales Rs m 160,625 162,394 1.1%
Other income Rs m 4,217 3,354 -20.5%
Total Revenues Rs m 164,842 165,747 0.5%
Gross profit Rs m 23,054 23,740 3.0%
Depreciation Rs m 8,076 9,823 21.6%
Interest Rs m 2,673 2,928 9.5%
Profit before tax Rs m 16,522 14,343 -13.2%
Tax Rs m 5,216 117 -97.8%
Profit after tax Rs m 11,306 14,226 25.8%
Gross profit margin % 14.4 14.6
Effective tax rate % 31.6 0.8
Net profit margin % 6.9 8.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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MRF. Balance Sheet Analysis

  • The company's current liabilities during FY20 down at Rs 53 billion as compared to Rs 55 billion in FY19, thereby witnessing an decrease of -3.9%.
  • Long-term debt down at Rs 8 billion as compared to Rs 11 billion during FY19, a fall of 26.1%.
  • Current assets fell 4% and stood at Rs 82 billion, while fixed assets rose 30% and stood at Rs 106 billion in FY20.
  • Overall, the total assets and liabilities for FY20 stood at Rs 194 billion as against Rs 184 billion during FY19, thereby witnessing a growth of 5%.

MRF. Balance Sheet as on March 2020

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Networth Rs m 108,374 122,147 12.7
 
Current Liabilities Rs m 54,644 52,522 -3.9
Long-term Debt Rs m 10,547 7,790 -26.1
Total Liabilities Rs m 184,413 194,423 5.4
 
Current assets Rs m 84,638 81,510 -3.7
Fixed Assets Rs m 81,895 106,107 29.6
Total Assets Rs m 184,413 194,423 5.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



MRF. Cash Flow Statement Analysis

  • MRF.'s cash flow from operating activities (CFO) during FY20 stood at Rs 23 billion, an improvement of 81.4% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY20 stood at Rs -2 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY20 stood at Rs -10 billion on a YoY basis.
  • Overall, net cash flows for the company during FY20 stood at Rs 11 billion from the Rs -911 million net cash flows seen during FY19.

MRF. 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 12,529 22,726 81.4%
Cash Flow from Investing Activities Rs m -13,862 -1,637 -
Cash Flow from Financing Activities Rs m 422 -10,324 -
Net Cash Flow Rs m -911 10,766 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for MRF.

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 3,355.1, an improvement from the EPS of Rs 2,666.5 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 79,200.0, stands at 29.4 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 1.6 times.
  • The company's price to cash flow (P/CF) ratio stood at 14.0 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 37,883.2 38,300.4
TTM Earnings per share Rs 2,666.5 3,355.1
Diluted earnings per share Rs 2,666.5 3,355.1
Price to Cash Flow x 17.3 14.0
TTM P/E ratio x 29.4 29.4
Price / Book Value ratio x 2.6 2.1
Market Cap Rs m 335,808 335,808
Dividends per share (Unadj.) Rs 60.0 100.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for MRF.

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 1.6x during FY20, from 1.5x 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 5.9x during FY20, from 7.2x 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 improved and stood at 11.6% during FY20, from 10.4% 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 13.3% during FY20, from 16.1% 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 improved and stood at 8.8% during FY20, from 7.6% 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 1.5 1.6
Debtors’ Days Days 54 52
Interest coverage x 7.2 5.9
Debt to equity ratio x 0.1 0.1
Return on assets % 7.6 8.8
Return on equity % 10.4 11.6
Return on capital employed % 16.1 13.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

MRF. Share Price Performance

Over the last one year, MRF. share price has moved up from Rs 61,476.6 to Rs 79,200.0, registering a gain of Rs 17,723.4 or around 28.8%.

Overall, the S&P BSE SENSEX is up 11.8% over the year.

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

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