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MRF 2020-21 Annual Report Analysis
Wed, 31 Mar

MRF has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

MRF Income Statement Analysis

  • Operating income during the year fell 0.5% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 23.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 18.2% in FY21 as against 14.7% in FY20.
  • Depreciation charges increased by 16.1% and finance costs decreased by 6.4% YoY, respectively.
  • Other income declined by 37.4% YoY.
  • Net profit for the year declined by 10.2% YoY.
  • Net profit margins during the year declined from 8.8% in FY20 to 7.9% in FY21.

MRF Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 162,394 161,632 -0.5%
Other income Rs m 3,354 2,099 -37.4%
Total Revenues Rs m 165,747 163,731 -1.2%
Gross profit Rs m 23,820 29,493 23.8%
Depreciation Rs m 9,823 11,408 16.1%
Interest Rs m 3,008 2,816 -6.4%
Profit before tax Rs m 14,343 17,368 21.1%
Tax Rs m 117 4,598 3,836.4%
Profit after tax Rs m 14,226 12,771 -10.2%
Gross profit margin % 14.7 18.2
Effective tax rate % 0.8 26.5
Net profit margin % 8.8 7.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Read Now: We're Bullish on 2 Non-Nifty Stocks

MRF Balance Sheet Analysis

  • The company's current liabilities during FY21 stood at Rs 73 billion as compared to Rs 53 billion in FY20, thereby witnessing an increase of 38.4%.
  • Long-term debt stood at Rs 8 billion as compared to Rs 8 billion during FY20, a growth of 4.2%.
  • Current assets rose 27% and stood at Rs 104 billion, while fixed assets rose 8% and stood at Rs 122 billion in FY21.
  • Overall, the total assets and liabilities for FY21 stood at Rs 226 billion as against Rs 194 billion during FY20, thereby witnessing a growth of 16%.

MRF Balance Sheet as on March 2021

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Networth Rs m 122,147 134,137 9.8
 
Current Liabilities Rs m 52,522 72,677 38.4
Long-term Debt Rs m 7,790 8,118 4.2
Total Liabilities Rs m 194,423 225,819 16.1
 
Current assets Rs m 81,510 103,672 27.2
Fixed Assets Rs m 112,913 122,147 8.2
Total Assets Rs m 194,423 225,819 16.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



MRF Cash Flow Statement Analysis

  • MRF's cash flow from operating activities (CFO) during FY21 stood at Rs 43 billion, an improvement of 90.4% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY21 stood at Rs -51 billion, an improvement of 3,007.2% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY21 stood at Rs -2 billion, an improvement of 76% on a YoY basis.
  • Overall, net cash flows for the company during FY21 stood at Rs -10 billion from the Rs 11 billion net cash flows seen during FY20.

MRF Cash Flow Statement 2020-21

Particulars No. of months 12 12 % Change
Year Ending Mar-20 Mar-21
Cash Flow from Operating Activities Rs m 22,712 43,246 90.4%
Cash Flow from Investing Activities Rs m -1,637 -50,862 -
Cash Flow from Financing Activities Rs m -10,324 -2,497 -
Net Cash Flow Rs m 10,766 -10,117 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for MRF

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 3,012.0, an decline from the EPS of Rs 3,355.1 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 82,218.7, stands at 27.3 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.6 times, while the price to sales ratio stands at 2.2 times.
  • The company's price to cash flow (P/CF) ratio stood at 13.4 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-20* 12 Mar-21*
Sales per share (Unadj.) Rs 38,300.4 38,120.7
TTM Earnings per share Rs 3,355.1 3,012.0
Diluted earnings per share Rs 3,354.2 3,011.2
Price to Cash Flow x 10.3 13.4
TTM P/E ratio x 17.4 27.3
Price / Book Value ratio x 2.1 2.4
Market Cap Rs m 261,888 324,626
Dividends per share (Unadj.) Rs 100.0 100.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for MRF

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 1.4x during FY21, from 1.6x during FY20. 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 7.2x during FY21, from 5.8x during FY20. 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 9.5% during FY21, from 11.6% during FY21. 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 14.2% during FY21, from 13.4% during FY20. 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 6.9% during FY21, from 8.9% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-20* 12 Mar-21*
Current ratio x 1.6 1.4
Debtors’ Days Days 5 5
Interest coverage x 5.8 7.2
Debt to equity ratio x 0.1 0.1
Return on assets % 8.9 6.9
Return on equity % 11.6 9.5
Return on capital employed % 13.4 14.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, 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 58,241.7 to Rs 82,218.7, registering a gain of Rs 23,977.1 or around 41.2%.

Overall, the S&P BSE SENSEX is up 74.1% over the year.

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

Annual Report FAQs

What is the current share price of MRF?

MRF currently trades at Rs 133,294.0 per share. You can check out the latest share price performance of MRF here...

What was the revenue of MRF in FY21? How does it compare to earlier years?

The revenues of MRF stood at Rs 163,731 m in FY21, which was down -1.2% compared to Rs 165,747 m reported in FY20.

MRF's revenue has grown from Rs 122,262 m in FY17 to Rs 163,731 m in FY21.

Over the past 5 years, the revenue of MRF has grown at a CAGR of 7.6%.

What was the net profit of MRF in FY21? How does it compare to earlier years?

The net profit of MRF stood at Rs 12,771 m in FY21, which was down -10.2% compared to Rs 14,226 m reported in FY20.

This compares to a net profit of Rs 11,306 m in FY19 and a net profit of Rs 11,316 m in FY18.

Over the past 5 years, MRF net profit has grown at a CAGR of -3.7%.

What does the cash flow statement of MRF 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 MRF reveals:

  • Cash flow from operations increased in FY21 and stood at Rs 43,246 m as compared to Rs 22,712 m in FY20.
  • Cash flow from investments decreased in FY21 and stood at Rs -50,862 m as compared to Rs -1,637 m in FY20.
  • Cash flow from financial activity increased in FY21 and stood at Rs -2,497 m as compared to Rs -10,324 m in FY20.

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

(Rs m)FY17FY18FY19FY20FY21
From Operations19,55724,13012,52922,71243,246
From Investments-13,927-20,139-13,862-1,637-50,862
From Financial Activity-4,376-4,526422-10,324-2,497
Net Cashflow1,254-535-91110,766-10,117

What does the Key Ratio analysis of MRF 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 MRF reveals:

  • Operating profit margins witnessed a fall and down at 18.2% in FY21 as against 14.7% in FY20.
  • Net profit margins declined from 8.8% in FY20 to 7.9% in FY21.
  • Debt to Equity ratio for FY21 stood at 0.1 as compared to 0.1 in FY20.

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

 FY17FY18FY19FY20FY21
Operating Profit Margin (%)22.215.714.414.718.2
Net Profit Margin (%)12.57.87.08.87.9
Debt to Equity Ratio (x)0.10.10.10.10.1

Read: Latest Annual Report Analysis of MRF

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