MRF LTD. 2018-19 Annual Report Analysis

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MRF LTD. 2018-19 Annual Report Analysis
Wed, 24 Jul

MRF LTD. has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

MRF LTD. Income Statement Analysis

  • Operating income during the year rose 7.4% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 1.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 14.4% in FY19 as against 15.3% in FY18.
  • Depreciation charges increased by 14.3% and finance costs increased by 5.6% YoY, respectively.
  • Other income grew by 27.5% YoY.
  • Net profit for the year declined by 0.1% YoY.
  • Net profit margins during the year declined from 7.4% in FY18 to 6.9% in FY19.

MRF LTD. Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 149,544 160,625 7.4%
Other income Rs m 3,307 4,217 27.5%
Total Revenues Rs m 152,850 164,842 7.8%
Gross profit Rs m 22,818 23,054 1.0%
Depreciation Rs m 7,067 8,076 14.3%
Interest Rs m 2,531 2,673 5.6%
Profit before tax Rs m 16,527 16,522 0.0%
Tax Rs m 5,210 5,216 0.1%
Profit after tax Rs m 11,316 11,306 -0.1%
Gross profit margin % 15.3 14.4
Effective tax rate % 31.5 31.6
Net profit margin % 7.4 6.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



MRF LTD. Balance Sheet Analysis

  • The company's current liabilities during FY19 stood at Rs 55 billion as compared to Rs 46 billion in FY18, thereby witnessing an increase of 19.1%.
  • Long-term debt down at Rs 11 billion as compared to Rs 13 billion during FY18, a fall of 20.1%.
  • Current assets rose 7% and stood at Rs 85 billion, while fixed assets rose 14% and stood at Rs 82 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 184 billion as against Rs 165 billion during FY18, thereby witnessing a growth of 12%.

MRF LTD. Balance Sheet as on March 2019

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 97,382 108,374 11.3
 
Current Liabilities Rs m 45,899 54,644 19.1
Long-term Debt Rs m 13,193 10,547 -20.1
Total Liabilities Rs m 164,785 184,413 11.9
 
Current assets Rs m 78,745 84,638 7.5
Fixed Assets Rs m 71,711 81,895 14.2
Total Assets Rs m 164,785 184,413 11.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



MRF LTD. Cash Flow Statement Analysis

  • MRF LTD.'s cash flow from operating activities (CFO) during FY19 stood at Rs 13 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs -14 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY19 stood at Rs 422 million, an improvement of 109% on a YoY basis.
  • Overall, net cash flows for the company during FY19 stood at Rs -911 million from the Rs -535 million net cash flows seen during FY18.

MRF LTD. Cash Flow Statement 2018-19

Particulars No. of months 12 12 % Change
Year Ending Mar-18 Mar-19
Cash Flow from Operating Activities Rs m 24,130 12,529 -48.1%
Cash Flow from Investing Activities Rs m -20,139 -13,862 -
Cash Flow from Financing Activities Rs m -4,526 422 -
Net Cash Flow Rs m -535 -911 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for MRF LTD.

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 2,666.5, an decline from the EPS of Rs 2,668.9 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 53,900.0, stands at 20.8 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 1.8 times.
  • The company's price to cash flow (P/CF) ratio stood at 11.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-18* 12 Mar-19*
Sales per share (Unadj.) Rs 35,269.8 37,883.2
TTM Earnings per share Rs 2,668.9 2,666.5
Diluted earnings per share Rs 2,668.9 2,666.5
Price to Cash Flow x 12.4 11.8
TTM P/E ratio x 20.8 20.8
Price / Book Value ratio x 2.9 2.6
Market Cap Rs m 228,536 228,536
Dividends per share (Unadj.) Rs 60.0 60.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for MRF LTD.

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 1.5x during FY19, from 1.7x during FY18. 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 7.2x during FY19, from 7.5x during FY18. 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 10.4% during FY19, from 11.6% during FY19. 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 16.1% during FY19, from 17.2% during FY18. 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 7.6% during FY19, from 8.4% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-18* 12 Mar-19*
Current ratio x 1.7 1.5
Debtors’ Days Days 52 54
Interest coverage x 7.5 7.2
Debt to equity ratio x 0.1 0.1
Return on assets % 8.4 7.6
Return on equity % 11.6 10.4
Return on capital employed % 17.2 16.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

MRF LTD. Share Price Performance

Over the last one year, MRF LTD. share price has moved down from Rs 77,609.6 to Rs 53,900.0, registering a loss of Rs 23,709.6 or around 30.5%.

Overall, the S&P BSE SENSEX is up 2.9% over the year.

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

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For the quarter ended December 2019, MRF LTD. has posted a net profit of Rs 2 bn (down 15.3% YoY). Sales on the other hand came in at Rs 40 bn (down 0.6% YoY). Read on for a complete analysis of MRF LTD.'s quarterly results.

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