TECH MAHINDRA 2019-20 Annual Report Analysis

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TECH MAHINDRA 2019-20 Annual Report Analysis
Fri, 7 Aug

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 14.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 14.7% 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 9.1% YoY.
  • Net profit margins during the year declined from 12.2% in FY19 to 10.2% 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 54,376 -14.2%
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 49,923 -11.0%
Tax Rs m 12,544 11,604 -7.5%
Profit after tax Rs m 42,888 38,974 -9.1%
Gross profit margin % 18.2 14.7
Effective tax rate % 22.4 23.2
Net profit margin % 12.2 10.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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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 31% and stood at Rs 40 billion in FY20.
  • Overall, the total assets and liabilities for FY20 stood at Rs 374 billion as against Rs 334 billion during FY19, thereby witnessing a growth of 12%.

TECH MAHINDRA Balance Sheet as on March 2020

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Networth Rs m 202,844 218,131 7.5
 
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 334,469 373,535 11.7
 
Current assets Rs m 215,658 231,723 7.4
Fixed Assets Rs m 30,700 40,284 31.2
Total Assets Rs m 334,469 373,535 11.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, 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: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for TECH MAHINDRA

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 40.4, an decline from the EPS of Rs 43.6 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 660.9, stands at 16.5 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.9 times, while the price to sales ratio stands at 1.7 times.
  • The company's price to cash flow (P/CF) ratio stood at 12.2 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 353.3 381.7
TTM Earnings per share Rs 43.6 40.4
Diluted earnings per share Rs 44.1 40.1
Price to Cash Flow x 11.9 12.2
TTM P/E ratio x 16.7 16.5
Price / Book Value ratio x 3.5 2.9
Market Cap Rs m 649,843 642,386
Dividends per share (Unadj.) Rs 14.0 15.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, 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 27.0x 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 17.9% during FY20, from 21.1% 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 23.9% during FY20, from 27.7% 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 10.9% during FY20, from 13.2% 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 27.0
Debt to equity ratio x 0.0 0.0
Return on assets % 13.2 10.9
Return on equity % 21.1 17.9
Return on capital employed % 27.7 23.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, 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 674.8 to Rs 660.9, registering a loss of Rs 13.9 or around 2.1%.

Meanwhile, the S&P BSE IT Index is trading at Rs 18,299.2 (down 0.4%). Over the last one year it has moved up from 15,641.3 to 18,299.2, a gain of 2,658 points (up 17.0%).

Overall, the S&P BSE SENSEX is up 2.6% over the year.

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

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