MTNL 2021-22 Annual Report Analysis

Tue, 4 Oct

MTNL has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

MTNL Income Statement Analysis

• Operating income during the year fell 17.2% on a year-on-year (YoY) basis.
• The company's operating profit was by NA YoY during the fiscal. Operating profit margins witnessed a growth and stood at 27.0% in FY22 as against 4.5% in FY21.
• Depreciation charges decreased by 13.6% and finance costs increased by 1.6% YoY, respectively.
• Other income grew by 29.6% YoY.
• Net profit for the year grew by NA YoY.
• Net profit margins during the year declined from 177.4% in FY21 to 226.5% in FY22.

MTNL Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	13,877	11,490	-17.2%
Other income	Rs m	4,852	6,289	29.6%
Total Revenues	Rs m	18,729	17,779	-5.1%
Gross profit	Rs m	624	-3,099	NA
Depreciation	Rs m	8,933	7,720	-13.6%
Interest	Rs m	21,134	21,472	1.6%
Profit before tax	Rs m	-24,592	-26,002	NA
Tax	Rs m	21	29	40.6%
Profit after tax	Rs m	-24,613	-26,031	NA
Gross profit margin	%	4.5	-27.0
Effective tax rate	%	-0.1	-0.1
Net profit margin	%	-177.4	-226.5

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MTNL Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 136 billion as compared to Rs 105 billion in FY21, thereby witnessing an increase of 29.5%.
• Long-term debt down at Rs 166 billion as compared to Rs 182 billion during FY21, a fall of 8.8%.
• Current assets fell 6% and stood at Rs 58 billion, while fixed assets fell 10% and stood at Rs 65 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 123 billion as against Rs 134 billion during FY21, thereby witnessing a fall of 8%.

MTNL Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	-160,445	-186,683	NA
Current Liabilities	Rs m	105,158	136,140	29.5
Long-term Debt	Rs m	181,722	165,656	-8.8
Total Liabilities	Rs m	133,754	123,167	-7.9
Current assets	Rs m	61,816	58,086	-6.0
Fixed Assets	Rs m	71,937	65,081	-9.5
Total Assets	Rs m	133,754	123,167	-7.9

MTNL Cash Flow Statement Analysis

• MTNL's cash flow from operating activities (CFO) during FY22 stood at Rs 7 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs 2 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -9 billion on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -278 million from the Rs -695 million net cash flows seen during FY21.

MTNL Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	-2,245	7,037	-
Cash Flow from Investing Activities	Rs m	-2,592	2,045	-
Cash Flow from Financing Activities	Rs m	4,142	-9,360	-
Net Cash Flow	Rs m	-695	-278	-

Current Valuations for MTNL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -41.3, an decline from the EPS of Rs -39.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 21.7, stands at -0.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at -0.1 times, while the price to sales ratio stands at 1.2 times.
• The company's price to cash flow (P/CF) ratio stood at -1.0 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	22.0	18.2
TTM Earnings per share	Rs	-39.1	-41.3
Diluted earnings per share	Rs	-39.1	-41.3
Price to Cash Flow	x	-0.8	-1.0
TTM P/E ratio	x	-0.5	-0.5
Price / Book Value ratio	x	-0.1	-0.1
Market Cap	Rs m	9,560	17,435
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for MTNL

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.4x during FY22, from 0.6x during FY21. 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 -0.2x during FY22, from -0.2x during FY21. 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 13.9% during FY22, from 15.3% during FY22. 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 21.5% during FY22, from -16.3% during FY21. 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 -3.7% during FY22, from -2.6% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	0.6	0.4
Debtors’ Days	Days	20	21
Interest coverage	x	-0.2	-0.2
Debt to equity ratio	x	-1.1	-0.9
Return on assets	%	-2.6	-3.7
Return on equity	%	15.3	13.9
Return on capital employed	%	-16.3	21.5

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 19.2 to Rs 21.7, registering a gain of Rs 2.5 or around 13.0%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 13,030.8 (up 2.3%). Over the last one year it has moved down from 15,371.9 to 13,030.8, a loss of 2,341 points (down 15.2%).

Overall, the S&P BSE SENSEX is down 1.9% over the year.

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

Read: Latest Annual Report Analysis of MTNL