MRPL 2017-18 Annual Report Analysis

Sat, 31 Mar

MRPL 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.

MRPL Income Statement Analysis

• Operating income during the year rose 25.0% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 32.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 13.0% in FY18 as against 23.9% in FY17.
• Depreciation charges decreased by 1.8% and finance costs decreased by 5.5% YoY, respectively.
• Other income declined by 34.6% YoY.
• Net profit for the year declined by 46.1% YoY.
• Net profit margins during the year declined from 11.9% in FY17 to 5.2% in FY18.

MRPL Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	275,439	344,219	25.0%
Other income	Rs m	4,189	2,739	-34.6%
Total Revenues	Rs m	279,628	346,959	24.1%
Gross profit	Rs m	65,831	44,785	-32.0%
Depreciation	Rs m	9,841	9,661	-1.8%
Interest	Rs m	9,687	9,151	-5.5%
Profit before tax	Rs m	50,492	28,713	-43.1%
Tax	Rs m	17,606	10,978	-37.6%
Profit after tax	Rs m	32,885	17,735	-46.1%
Gross profit margin	%	23.9	13.0
Effective tax rate	%	34.9	38.2
Net profit margin	%	11.9	5.2

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MRPL Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 173 billion as compared to Rs 143 billion in FY17, thereby witnessing an increase of 20.8%.
• Long-term debt down at Rs 45 billion as compared to Rs 86 billion during FY17, a fall of 47.9%.
• Current assets fell 3% and stood at Rs 97 billion, while fixed assets rose 2% and stood at Rs 274 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 371 billion as against Rs 370 billion during FY17, thereby witnessing a growth of 0%.

MRPL Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	95,022	102,334	7.7
Current Liabilities	Rs m	143,077	172,850	20.8
Long-term Debt	Rs m	85,909	44,787	-47.9
Total Liabilities	Rs m	370,008	371,418	0.4
Current assets	Rs m	100,356	96,950	-3.4
Fixed Assets	Rs m	269,652	274,468	1.8
Total Assets	Rs m	370,008	371,418	0.4

MRPL Cash Flow Statement Analysis

• MRPL's cash flow from operating activities (CFO) during FY18 stood at Rs 40 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -10 billion, an improvement of 269.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -28 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 2 billion from the Rs -11 billion net cash flows seen during FY17.

MRPL 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	-11,083	39,719	-
Cash Flow from Investing Activities	Rs m	-2,654	-9,813	-
Cash Flow from Financing Activities	Rs m	2,645	-27,963	-
Net Cash Flow	Rs m	-11,092	1,942	-

Current Valuations for MRPL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 10.1, an decline from the EPS of Rs 18.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 109.5, stands at 8.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.9 times, while the price to sales ratio stands at 0.6 times.
• The company's price to cash flow (P/CF) ratio stood at 8.1 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	157.2	196.4
TTM Earnings per share	Rs	18.8	10.1
Diluted earnings per share	Rs	18.8	10.1
Price to Cash Flow	x	4.4	8.1
TTM P/E ratio	x	4.9	8.6
Price / Book Value ratio	x	1.7	2.2
Market Cap	Rs m	156,901	220,871
Dividends per share (Unadj.)	Rs	6.0	3.0

Ratio Analysis for MRPL

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.6x during FY18, from 0.7x 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 4.1x during FY18, from 6.2x 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 17.3% during FY18, from 34.6% 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 25.7% during FY18, from 33.3% 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 declined and down at 7.2% during FY18, from 11.5% 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	0.7	0.6
Debtors’ Days	Days	35	27
Interest coverage	x	6.2	4.1
Debt to equity ratio	x	0.9	0.4
Return on assets	%	11.5	7.2
Return on equity	%	34.6	17.3
Return on capital employed	%	33.3	25.7

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

MRPL Share Price Performance

Over the last one year, MRPL share price has moved up from Rs 106.7 to Rs 109.5, registering a gain of Rs 2.9 or around 2.7%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 14,614.4 (up 0.1%). Over the last one year it has moved up from 13,563.6 to 14,614.4, a gain of 1,051 points (up 7.7%).

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

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

Read: Latest Annual Report Analysis of MRPL