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MTNL 2017-18 Annual Report Analysis

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MTNL 2017-18 Annual Report Analysis
Wed, 19 Dec

MTNL 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.

MTNL Income Statement Analysis

  • Operating income during the year fell 16.8% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 8.8% YoY during the fiscal. Operating profit margins witnessed a growth and stood at 46.8% in FY18 as against 35.8% in FY17.
  • Depreciation charges decreased by 5.4% and finance costs increased by 3.9% YoY, respectively.
  • Other income grew by 8.8% YoY.
  • Net profit for the year grew by 1.2% YoY.
  • Net profit margins during the year declined from 80.3% in FY17 to 92.4% in FY18.

MTNL Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 29,694 24,719 -16.8%
Other income Rs m 6,853 7,453 8.8%
Total Revenues Rs m 36,547 32,172 -12.0%
Gross profit Rs m -10,638 -11,574 8.8%
Depreciation Rs m 11,133 10,535 -5.4%
Interest Rs m 14,485 15,055 3.9%
Profit before tax Rs m -29,403 -29,710 1.0%
Tax Rs m -35 9 -125.6%
Profit after tax Rs m -29,361 -29,714 1.2%
Gross profit margin % -35.8 -46.8
Effective tax rate % 0.1 0.0
Net profit margin % -80.3 -92.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



MTNL Balance Sheet Analysis

  • The company's current liabilities during FY18 down at Rs 91 billion as compared to Rs 106 billion in FY17, thereby witnessing an decrease of -14.4%.
  • Long-term debt stood at Rs 103 billion as compared to Rs 70 billion during FY17, a growth of 46.8%.
  • Current assets rose 2% and stood at Rs 50 billion, while fixed assets fell 6% and stood at Rs 85 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 163 billion as against Rs 177 billion during FY17, thereby witnessing a fall of 8%.

MTNL Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m -33,739 -63,320 87.7
 
Current Liabilities Rs m 106,134 90,857 -14.4
Long-term Debt Rs m 70,113 102,927 46.8
Total Liabilities Rs m 176,933 162,912 -7.9
 
Current assets Rs m 49,628 50,431 1.6
Fixed Assets Rs m 90,546 84,990 -6.1
Total Assets Rs m 176,933 162,912 -7.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



MTNL Cash Flow Statement Analysis

  • MTNL's cash flow from operating activities (CFO) during FY18 stood at Rs 2 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -5 billion, an improvement of 1,525.6% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs 3 billion on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs 73 million from the Rs -707 million net cash flows seen during FY17.

MTNL 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 -10,244 1,547 -
Cash Flow from Investing Activities Rs m -303 -4,921 -
Cash Flow from Financing Activities Rs m 9,839 3,446 -65.0%
Net Cash Flow Rs m -707 73 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for MTNL

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs -47.2, an decline from the EPS of Rs -46.6 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 14.3, stands at -0.3 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at -0.2 times, while the price to sales ratio stands at 0.6 times.
  • The company's price to cash flow (P/CF) ratio stood at -0.5 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 47.1 39.2
TTM Earnings per share Rs -46.6 -47.2
Diluted earnings per share Rs -46.6 -47.2
Price to Cash Flow x -0.5 -0.5
TTM P/E ratio x -0.3 -0.3
Price / Book Value ratio x -0.4 -0.2
Market Cap Rs m 9,009 9,009
Dividends per share (Unadj.) Rs 0.0 0.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for MTNL

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 0.6x during FY18, from 0.5x 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 -1.0x during FY18, from -1.0x 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 46.9% during FY18, from 87.0% 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 improved and stood at -37.0% during FY18, from -41.0% 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 -9.0% during FY18, from -8.4% 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 0.5 0.6
Debtors’ Days Days 60 63
Interest coverage x -1.0 -1.0
Debt to equity ratio x -2.1 -1.6
Return on assets % -8.4 -9.0
Return on equity % 87.0 46.9
Return on capital employed % -41.0 -37.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

MTNL Share Price Performance

Over the last one year, MTNL share price has moved up from Rs 21.4 to Rs 14.3, registering a loss of Rs 7.1 or around 33.2%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 7,158.0 (down 0.8%). Over the last one year it has moved up from 6,182.1 to 7,158.0, a gain of 976 points (up 15.8%).

Overall, the S&P BSE SENSEX is up 8.6% over the year.

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

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