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TECH MAHINDRA 2018-19 Annual Report Analysis
Sun, 31 Mar

TECH MAHINDRA 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.

TECH MAHINDRA Income Statement Analysis

  • Operating income during the year rose 12.9% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 35.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 18.2% in FY19 as against 15.2% in FY18.
  • Depreciation charges increased by 4.1% and finance costs decreased by 18.0% YoY, respectively.
  • Other income declined by 63.0% YoY.
  • Net profit for the year grew by 15.0% YoY.
  • Net profit margins during the year grew from 12.3% in FY18 to 12.5% in FY19.

TECH MAHINDRA Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 307,729 347,421 12.9%
Other income Rs m 14,436 5,342 -63.0%
Total Revenues Rs m 322,165 352,763 9.5%
Gross profit Rs m 46,825 63,369 35.3%
Depreciation Rs m 10,850 11,292 4.1%
Interest Rs m 1,624 1,332 -18.0%
Profit before tax Rs m 48,787 56,087 15.0%
Tax Rs m 10,926 12,544 14.8%
Profit after tax Rs m 37,861 43,543 15.0%
Gross profit margin % 15.2 18.2
Effective tax rate % 22.4 22.4
Net profit margin % 12.3 12.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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TECH MAHINDRA Balance Sheet Analysis

  • The company's current liabilities during FY19 stood at Rs 103 billion as compared to Rs 79 billion in FY18, thereby witnessing an increase of 30.5%.
  • Long-term debt down at Rs 2 billion as compared to Rs 8 billion during FY18, a fall of 72.9%.
  • Current assets rose 19% and stood at Rs 216 billion, while fixed assets fell 4% and stood at Rs 113 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 328 billion as against Rs 299 billion during FY18, thereby witnessing a growth of 10%.

TECH MAHINDRA Balance Sheet as on March 2019

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 184,281 198,761 7.9
 
Current Liabilities Rs m 79,167 103,312 30.5
Long-term Debt Rs m 7,711 2,086 -72.9
Total Liabilities Rs m 298,606 328,378 10.0
 
Current assets Rs m 181,070 215,658 19.1
Fixed Assets Rs m 117,536 112,720 -4.1
Total Assets Rs m 298,606 328,378 10.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



TECH MAHINDRA Cash Flow Statement Analysis

  • TECH MAHINDRA's cash flow from operating activities (CFO) during FY19 stood at Rs 44 billion, an improvement of 24.7% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs -21 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY19 stood at Rs -23 billion on a YoY basis.
  • Overall, net cash flows for the company during FY19 stood at Rs 766 million from the Rs -352 million net cash flows seen during FY18.

TECH MAHINDRA 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 35,535 44,320 24.7%
Cash Flow from Investing Activities Rs m -33,597 -21,164 -
Cash Flow from Financing Activities Rs m -2,694 -22,512 -
Net Cash Flow Rs m -352 766 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for TECH MAHINDRA

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 49.1, an improvement from the EPS of Rs 42.9 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 776.2, stands at 17.6 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 3.8 times, while the price to sales ratio stands at 2.0 times.
  • The company's price to cash flow (P/CF) ratio stood at 11.7 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 348.4 391.6
TTM Earnings per share Rs 42.9 49.1
Diluted earnings per share Rs 38.9 44.8
Price to Cash Flow x 12.7 11.7
TTM P/E ratio x 18.8 17.6
Price / Book Value ratio x 2.4 3.2
Market Cap Rs m 445,855 640,209
Dividends per share (Unadj.) Rs 14.0 14.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for TECH MAHINDRA

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 2.1x during FY19, from 2.3x 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 improved and stood at 43.1x during FY19, from 31.0x 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 improved and stood at 21.9% during FY19, from 20.5% 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 improved and stood at 28.6% during FY19, from 26.3% 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 improved and stood at 13.7% during FY19, from 13.2% 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 2.3 2.1
Debtors’ Days Days 77 73
Interest coverage x 31.0 43.1
Debt to equity ratio x 0.0 0.0
Return on assets % 13.2 13.7
Return on equity % 20.5 21.9
Return on capital employed % 26.3 28.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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

TECH MAHINDRA Share Price Performance

Over the last one year, TECH MAHINDRA share price has moved up from Rs 638.3 to Rs 776.2, registering a gain of Rs 137.9 or around 21.6%.

Meanwhile, the S&P BSE IT Index is trading at Rs 15,280.3 (up 0.4%). Over the last one year it has moved up from 12,100.6 to 15,280.3, a gain of 3,180 points (up 26.3%).

Overall, the S&P BSE SENSEX is up 16.3% over the year.

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

Annual Report FAQs

What is the current share price of TECH MAHINDRA?

TECH MAHINDRA currently trades at Rs 1,250.0 per share. You can check out the latest share price performance of TECH MAHINDRA here...

What was the revenue of TECH MAHINDRA in FY19? How does it compare to earlier years?

The revenues of TECH MAHINDRA stood at Rs 352,763 m in FY19, which was up 9.5% compared to Rs 322,165 m reported in FY18.

TECH MAHINDRA's revenue has grown from Rs 231,047 m in FY15 to Rs 352,763 m in FY19.

Over the past 5 years, the revenue of TECH MAHINDRA has grown at a CAGR of 11.2%.

What was the net profit of TECH MAHINDRA in FY19? How does it compare to earlier years?

The net profit of TECH MAHINDRA stood at Rs 43,543 m in FY19, which was up 15.0% compared to Rs 37,861 m reported in FY18.

This compares to a net profit of Rs 28,532 m in FY17 and a net profit of Rs 30,240 m in FY16.

Over the past 5 years, TECH MAHINDRA net profit has grown at a CAGR of 13.1%.

What does the cash flow statement of TECH MAHINDRA reveal?

The cash flow statement is the financial statement that presents the cash inflows and outflows of a company during a given period of time.

This statement is one of the most useful tools for judging a company's liquidity position. The ratios and parameters in this statement helps test a company's financial health.

The cash flow statement of TECH MAHINDRA reveals:

  • Cash flow from operations increased in FY19 and stood at Rs 44,320 m as compared to Rs 35,535 m in FY18.
  • Cash flow from investments increased in FY19 and stood at Rs -21,164 m as compared to Rs -33,597 m in FY18.
  • Cash flow from financial activity decreased in FY19 and stood at Rs -22,512 m as compared to Rs -2,694 m in FY18.

Here's the cash flow statement of TECH MAHINDRA for the past 5 years.

(Rs m)FY15FY16FY17FY18FY19
From Operations24,47931,37040,71435,53544,320
From Investments-20,922-14,598-28,895-33,597-21,164
From Financial Activity-8,290-4,961-15,709-2,694-22,512
Net Cashflow-2,46311,877-3,925-352766

What does the Key Ratio analysis of TECH MAHINDRA reveal?

Be it the company's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.

The ratio/financial analysis of TECH MAHINDRA reveals:

  • Operating profit margins witnessed a fall and down at 18.2% in FY19 as against 15.2% in FY18.
  • Net profit margins grew from 12.3% in FY18 to 12.5% in FY19.
  • Debt to Equity ratio for FY19 stood at 0.0 as compared to 0.0 in FY18.

Here's the ratio/financial analysis of TECH MAHINDRA for the past 5 years.

 FY15FY16FY17FY18FY19
Operating Profit Margin (%)16.815.613.815.218.2
Net Profit Margin (%)11.811.49.812.312.5
Debt to Equity Ratio (x)0.00.00.00.00.0

Read: Latest Annual Report Analysis of TECH MAHINDRA

 

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Feb 5, 2020

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