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TECH MAHINDRA 2019-20 Annual Report Analysis
Tue, 31 Mar

TECH MAHINDRA has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

TECH MAHINDRA Income Statement Analysis

  • Operating income during the year rose 6.1% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 13.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 14.9% in FY20 as against 18.2% in FY19.
  • Depreciation charges increased by 28.0% and finance costs increased by 44.1% YoY, respectively.
  • Other income grew by 123.2% YoY.
  • Net profit for the year declined by 10.4% YoY.
  • Net profit margins during the year declined from 12.5% in FY19 to 10.6% in FY20.

TECH MAHINDRA Income Statement 2019-20

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Net Sales Rs m 347,421 368,677 6.1%
Other income Rs m 5,342 11,924 123.2%
Total Revenues Rs m 352,763 380,601 7.9%
Gross profit Rs m 63,369 55,086 -13.1%
Depreciation Rs m 11,292 14,458 28.0%
Interest Rs m 1,332 1,919 44.1%
Profit before tax Rs m 56,087 50,633 -9.7%
Tax Rs m 12,544 11,604 -7.5%
Profit after tax Rs m 43,543 39,029 -10.4%
Gross profit margin % 18.2 14.9
Effective tax rate % 22.4 22.9
Net profit margin % 12.5 10.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



New Research: 2 stocks to buy as Nifty50 heads towards 40,000

TECH MAHINDRA Balance Sheet Analysis

  • The company's current liabilities during FY20 stood at Rs 109 billion as compared to Rs 103 billion in FY19, thereby witnessing an increase of 5.8%.
  • Long-term debt down at Rs 2 billion as compared to Rs 2 billion during FY19, a fall of 14.3%.
  • Current assets rose 7% and stood at Rs 232 billion, while fixed assets rose 18% and stood at Rs 133 billion in FY20.
  • Overall, the total assets and liabilities for FY20 stood at Rs 365 billion as against Rs 328 billion during FY19, thereby witnessing a growth of 11%.

TECH MAHINDRA Balance Sheet as on March 2020

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Networth Rs m 198,761 213,867 7.6
 
Current Liabilities Rs m 103,312 109,257 5.8
Long-term Debt Rs m 2,086 1,787 -14.3
Total Liabilities Rs m 328,378 365,092 11.2
 
Current assets Rs m 215,658 231,723 7.4
Fixed Assets Rs m 112,720 133,369 18.3
Total Assets Rs m 328,378 365,092 11.2
* 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 FY20 stood at Rs 44 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY20 stood at Rs 10 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY20 stood at Rs -45 billion on a YoY basis.
  • Overall, net cash flows for the company during FY20 stood at Rs 10 billion from the Rs 766 million net cash flows seen during FY19.

TECH MAHINDRA Cash Flow Statement 2019-20

Particulars No. of months 12 12 % Change
Year Ending Mar-19 Mar-20
Cash Flow from Operating Activities Rs m 44,320 43,581 -1.7%
Cash Flow from Investing Activities Rs m -21,164 10,286 -
Cash Flow from Financing Activities Rs m -22,512 -44,655 -
Net Cash Flow Rs m 766 9,740 1,171.5%
* 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 44.8, an decline from the EPS of Rs 49.1 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 565.0, stands at 14.1 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.6 times, while the price to sales ratio stands at 1.3 times.
  • The company's price to cash flow (P/CF) ratio stood at 10.7 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Sales per share (Unadj.) Rs 391.6 423.0
TTM Earnings per share Rs 49.1 44.8
Diluted earnings per share Rs 44.8 40.2
Price to Cash Flow x 13.8 10.7
TTM P/E ratio x 17.6 14.1
Price / Book Value ratio x 3.2 2.7
Market Cap Rs m 640,209 573,609
Dividends per share (Unadj.) Rs 14.0 15.0
* 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 improved and stood at 2.1x during FY20, from 2.1x during FY19. 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 27.4x during FY20, from 43.1x during FY19. 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 18.2% during FY20, from 21.9% during FY20. 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 24.4% during FY20, from 28.6% during FY19. 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 11.2% during FY20, from 13.7% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Current ratio x 2.1 2.1
Debtors’ Days Days 73 75
Interest coverage x 43.1 27.4
Debt to equity ratio x 0.0 0.0
Return on assets % 13.7 11.2
Return on equity % 21.9 18.2
Return on capital employed % 28.6 24.4
* 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 down from Rs 776.2 to Rs 565.0, registering a loss of Rs 211.3 or around 27.2%.

Meanwhile, the S&P BSE IT Index is trading at Rs 12,842.7 (up 3.0%). Over the last one year it has moved down from 15,280.3 to 12,842.7, a loss of 2,438 points (down 16.0%).

Overall, the S&P BSE SENSEX is down 24.2% 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 1,259.4 per share. You can check out the latest share price performance of TECH MAHINDRA here...

What was the revenue of TECH MAHINDRA in FY20? How does it compare to earlier years?

The revenues of TECH MAHINDRA stood at Rs 380,601 m in FY20, which was up 7.9% compared to Rs 352,763 m reported in FY19.

TECH MAHINDRA's revenue has grown from Rs 270,729 m in FY16 to Rs 380,601 m in FY20.

Over the past 5 years, the revenue of TECH MAHINDRA has grown at a CAGR of 8.9%.

What was the net profit of TECH MAHINDRA in FY20? How does it compare to earlier years?

The net profit of TECH MAHINDRA stood at Rs 39,029 m in FY20, which was down -10.4% compared to Rs 43,543 m reported in FY19.

This compares to a net profit of Rs 37,861 m in FY18 and a net profit of Rs 28,532 m in FY17.

Over the past 5 years, TECH MAHINDRA net profit has grown at a CAGR of 6.6%.

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 decreased in FY20 and stood at Rs 43,581 m as compared to Rs 44,320 m in FY19.
  • Cash flow from investments increased in FY20 and stood at Rs 10,286 m as compared to Rs -21,164 m in FY19.
  • Cash flow from financial activity decreased in FY20 and stood at Rs -44,655 m as compared to Rs -22,512 m in FY19.

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

(Rs m)FY16FY17FY18FY19FY20
From Operations31,37040,71435,53544,32043,581
From Investments-14,598-28,895-33,597-21,16410,286
From Financial Activity-4,961-15,709-2,694-22,512-44,655
Net Cashflow11,877-3,925-3527669,740

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 stood at 14.9% in FY20 as against 18.2% in FY19.
  • Net profit margins declined from 12.5% in FY19 to 10.6% in FY20.
  • Debt to Equity ratio for FY20 stood at 0.0 as compared to 0.0 in FY19.

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

 FY16FY17FY18FY19FY20
Operating Profit Margin (%)15.613.815.218.214.9
Net Profit Margin (%)11.49.812.312.510.6
Debt to Equity Ratio (x)0.00.00.00.00.0

Read: Latest Annual Report Analysis of TECH MAHINDRA

 

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