TITAN 2019-20 Annual Report Analysis

Tue, 31 Mar

TITAN 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.

TITAN Income Statement Analysis

• Operating income during the year rose 6.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 24.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 11.7% in FY20 as against 10.1% in FY19.
• Depreciation charges increased by 113.7% and finance costs increased by 215.9% YoY, respectively.
• Other income declined by 17.3% YoY.
• Net profit for the year grew by 7.6% YoY.
• Net profit margins during the year grew from 7.0% in FY19 to 7.1% in FY20.

TITAN Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	197,785	210,520	6.4%
Other income	Rs m	1,851	1,530	-17.3%
Total Revenues	Rs m	199,636	212,050	6.2%
Gross profit	Rs m	19,893	24,670	24.0%
Depreciation	Rs m	1,628	3,480	113.7%
Interest	Rs m	525	1,660	215.9%
Profit before tax	Rs m	19,591	21,060	7.5%
Tax	Rs m	5,682	6,090	7.2%
Profit after tax	Rs m	13,908	14,970	7.6%
Gross profit margin	%	10.1	11.7
Effective tax rate	%	29.0	28.9
Net profit margin	%	7.0	7.1

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TITAN Balance Sheet Analysis

• The company's current liabilities during FY20 stood at Rs 56 billion as compared to Rs 55 billion in FY19, thereby witnessing an increase of 3.0%.
• Long-term debt down at Rs 170 million as compared to Rs 317 million during FY19, a fall of 46.3%.
• Current assets rose 6% and stood at Rs 101 billion, while fixed assets rose 59% and stood at Rs 33 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 134 billion as against Rs 116 billion during FY19, thereby witnessing a growth of 15%.

TITAN Balance Sheet as on March 2020

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Networth	Rs m	60,664	66,650	9.9
Current Liabilities	Rs m	54,619	56,280	3.0
Long-term Debt	Rs m	317	170	-46.3
Total Liabilities	Rs m	116,411	133,910	15.0
Current assets	Rs m	95,873	101,210	5.6
Fixed Assets	Rs m	20,538	32,700	59.2
Total Assets	Rs m	116,411	133,910	15.0

TITAN Cash Flow Statement Analysis

• TITAN's cash flow from operating activities (CFO) during FY20 stood at Rs -3 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY20 stood at Rs 2 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY20 stood at Rs -2 billion, an improvement of 50% on a YoY basis.
• Overall, net cash flows for the company during FY20 stood at Rs -4 billion from the Rs -425 million net cash flows seen during FY19.

TITAN 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	12,429	-3,480	-
Cash Flow from Investing Activities	Rs m	-7,983	2,350	-
Cash Flow from Financing Activities	Rs m	-4,888	-2,420	-
Net Cash Flow	Rs m	-425	-3,550	-

Current Valuations for TITAN

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 16.9, an improvement from the EPS of Rs 15.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 933.5, stands at 55.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 12.4 times, while the price to sales ratio stands at 3.9 times.
• The company's price to cash flow (P/CF) ratio stood at 50.8 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	222.8	237.1
TTM Earnings per share	Rs	15.7	16.9
Diluted earnings per share	Rs	15.7	16.9
Price to Cash Flow	x	65.0	50.8
TTM P/E ratio	x	72.6	55.4
Price / Book Value ratio	x	13.7	14.1
Market Cap	Rs m	833,511	936,585
Dividends per share (Unadj.)	Rs	5.0	4.0

Ratio Analysis for TITAN

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.8x during FY20, from 1.8x 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 13.7x during FY20, from 38.3x 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 22.5% during FY20, from 22.9% 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 improved and stood at 34.0% during FY20, from 33.0% 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 improved and stood at 12.4% during FY20, from 12.4% 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	1.8	1.8
Debtors’ Days	Days	78	1
Interest coverage	x	38.3	13.7
Debt to equity ratio	x	0.0	0.0
Return on assets	%	12.4	12.4
Return on equity	%	22.9	22.5
Return on capital employed	%	33.0	34.0

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

TITAN Share Price Performance

Over the last one year, TITAN share price has moved down from Rs 1,137.5 to Rs 933.5, registering a loss of Rs 204.0 or around 17.9%.

Overall, the S&P BSE SENSEX is down 24.2% over the year.

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

Read: Latest Annual Report Analysis of TITAN