MT EDUCARE 2017-18 Annual Report Analysis

Sat, 31 Mar

MT EDUCARE 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.

MT EDUCARE Income Statement Analysis

• Operating income during the year fell 26.9% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 661.6% YoY during the fiscal. Operating profit margins witnessed a growth and stood at 77.2% in FY18 as against 10.0% in FY17.
• Depreciation charges increased by 13.4% and finance costs increased by 59.2% YoY, respectively.
• Other income grew by 8.1% YoY.
• Net profit for the year declined by 2357.3% YoY.
• Net profit margins during the year declined from 1.9% in FY17 to 59.2% in FY18.

MT EDUCARE Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	3,046	2,226	-26.9%
Other income	Rs m	134	145	8.1%
Total Revenues	Rs m	3,180	2,371	-25.4%
Gross profit	Rs m	306	-1,719	-661.6%
Depreciation	Rs m	188	214	13.4%
Interest	Rs m	144	230	59.2%
Profit before tax	Rs m	107	-2,017	-1,976.5%
Tax	Rs m	49	-699	-1,523.5%
Profit after tax	Rs m	58	-1,318	-2,357.3%
Gross profit margin	%	10.0	-77.2
Effective tax rate	%	45.7	34.6
Net profit margin	%	1.9	-59.2

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MT EDUCARE Balance Sheet Analysis

• The company's current liabilities during FY18 down at Rs 1 billion as compared to Rs 2 billion in FY17, thereby witnessing an decrease of -37.6%.
• Long-term debt stood at Rs 1 billion as compared to Rs 201 million during FY17, a growth of 545.8%.
• Current assets rose 54% and stood at Rs 3 billion, while fixed assets fell 35% and stood at Rs 1 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 4 billion as against Rs 4 billion during FY17, thereby witnessing a growth of 8%.

MT EDUCARE Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	1,418	2,042	44.0
Current Liabilities	Rs m	2,085	1,301	-37.6
Long-term Debt	Rs m	201	1,300	545.8
Total Liabilities	Rs m	3,545	3,830	8.0
Current assets	Rs m	1,707	2,632	54.2
Fixed Assets	Rs m	1,838	1,198	-34.8
Total Assets	Rs m	3,545	3,830	8.0

MT EDUCARE Cash Flow Statement Analysis

• MT EDUCARE's cash flow from operating activities (CFO) during FY18 stood at Rs -654 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -1 billion, an improvement of 2,035.3% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs 2 billion, an improvement of 120% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -140 million from the Rs 52 million net cash flows seen during FY17.

MT EDUCARE 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	-793	-654	-
Cash Flow from Investing Activities	Rs m	-70	-1,497	-
Cash Flow from Financing Activities	Rs m	915	2,012	119.8%
Net Cash Flow	Rs m	52	-140	-

Current Valuations for MT EDUCARE

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -18.4, an decline from the EPS of Rs 1.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 70.3, stands at 10.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.5 times, while the price to sales ratio stands at 2.3 times.
• The company's price to cash flow (P/CF) ratio stood at -4.7 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	76.5	31.0
TTM Earnings per share	Rs	1.5	-18.4
Diluted earnings per share	Rs	0.8	-18.3
Price to Cash Flow	x	24.7	-4.7
TTM P/E ratio	x	35.5	10.5
Price / Book Value ratio	x	3.9	2.6
Market Cap	Rs m	5,506	5,239
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for MT EDUCARE

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.0x during FY18, from 0.8x 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 -7.8x during FY18, from 1.7x 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 -64.6% during FY18, from 4.1% 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 -53.5% during FY18, from 15.6% 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 -28.4% during FY18, from 5.7% 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	0.8	2.0
Debtors’ Days	Days	1,378	289
Interest coverage	x	1.7	-7.8
Debt to equity ratio	x	0.1	0.6
Return on assets	%	5.7	-28.4
Return on equity	%	4.1	-64.6
Return on capital employed	%	15.6	-53.5

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

MT EDUCARE Share Price Performance

Over the last one year, MT EDUCARE share price has moved down from Rs 84.6 to Rs 70.3, registering a loss of Rs 14.3 or around 16.9%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 6,513.3 (down 0.7%). Over the last one year it has moved up from 5,771.5 to 6,513.3, a gain of 742 points (up 12.9%).

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

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

Read: Latest Annual Report Analysis of MT EDUCARE