TECH MAHINDRA 2021-22 Annual Report Analysis

Fri, 1 Jul

TECH MAHINDRA 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.

TECH MAHINDRA Income Statement Analysis

• Operating income during the year rose 17.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 17.6% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 17.9% in FY22 as against 18.0% in FY21.
• Depreciation charges increased by 4.3% and finance costs decreased by 6.6% YoY, respectively.
• Other income grew by 45.1% YoY.
• Net profit for the year grew by 29.3% YoY.
• Net profit margins during the year grew from 11.5% in FY21 to 12.6% in FY22.

TECH MAHINDRA Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	378,551	446,460	17.9%
Other income	Rs m	7,871	11,420	45.1%
Total Revenues	Rs m	386,422	457,880	18.5%
Gross profit	Rs m	67,963	79,903	17.6%
Depreciation	Rs m	14,577	15,204	4.3%
Interest	Rs m	1,740	1,626	-6.6%
Profit before tax	Rs m	59,517	74,493	25.2%
Tax	Rs m	15,999	18,220	13.9%
Profit after tax	Rs m	43,518	56,273	29.3%
Gross profit margin	%	18.0	17.9
Effective tax rate	%	26.9	24.5
Net profit margin	%	11.5	12.6

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TECH MAHINDRA Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 125 billion as compared to Rs 103 billion in FY21, thereby witnessing an increase of 21.7%.
• Long-term debt down at Rs 1 billion as compared to Rs 2 billion during FY21, a fall of 14.4%.
• Current assets fell 3% and stood at Rs 245 billion, while fixed assets rose 45% and stood at Rs 196 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 441 billion as against Rs 388 billion during FY21, thereby witnessing a growth of 14%.

TECH MAHINDRA Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	243,943	264,769	8.5
Current Liabilities	Rs m	102,775	125,048	21.7
Long-term Debt	Rs m	1,658	1,420	-14.4
Total Liabilities	Rs m	387,647	440,516	13.6
Current assets	Rs m	252,599	244,557	-3.2
Fixed Assets	Rs m	135,048	195,959	45.1
Total Assets	Rs m	387,647	440,516	13.6

TECH MAHINDRA Cash Flow Statement Analysis

• TECH MAHINDRA's cash flow from operating activities (CFO) during FY22 stood at Rs 53 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs 5 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -47 billion on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 11 billion from the Rs -3 billion net cash flows seen during FY21.

TECH MAHINDRA 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	80,938	52,853	-34.7%
Cash Flow from Investing Activities	Rs m	-54,501	4,815	-
Cash Flow from Financing Activities	Rs m	-29,869	-46,666	-
Net Cash Flow	Rs m	-3,263	10,985	-

Current Valuations for TECH MAHINDRA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 64.1, an improvement from the EPS of Rs 49.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,003.3, stands at 17.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.7 times, while the price to sales ratio stands at 2.0 times.
• The company's price to cash flow (P/CF) ratio stood at 17.0 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	433.1	508.7
TTM Earnings per share	Rs	49.8	64.1
Diluted earnings per share	Rs	44.7	57.9
Price to Cash Flow	x	16.6	17.0
TTM P/E ratio	x	22.2	17.3
Price / Book Value ratio	x	2.8	4.6
Market Cap	Rs m	686,692	1,217,491
Dividends per share (Unadj.)	Rs	45.0	45.0

Ratio Analysis for TECH MAHINDRA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.0x during FY22, from 2.5x 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 improved and stood at 46.8x during FY22, from 35.2x 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 improved and stood at 21.3% during FY22, from 17.8% 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 28.6% during FY22, from 24.9% 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 improved and stood at 13.1% during FY22, from 11.7% 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	2.5	2.0
Debtors’ Days	Days	87	98
Interest coverage	x	35.2	46.8
Debt to equity ratio	x	0.0	0.0
Return on assets	%	11.7	13.1
Return on equity	%	17.8	21.3
Return on capital employed	%	24.9	28.6

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 1,085.2 to Rs 1,003.3, registering a loss of Rs 81.9 or around 7.5%.

Meanwhile, the S&P BSE IT Index is trading at Rs 28,244.5 (down 0.2%). Over the last one year it has moved down from 29,961.0 to 28,244.5, a loss of 1,717 points (down 5.7%).

Overall, the S&P BSE SENSEX is up 0.1% over the year.

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

Read: Latest Annual Report Analysis of TECH MAHINDRA