TVS MOTORS 2017-18 Annual Report Analysis

Fri, 17 Aug

TVS MOTORS has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

TVS MOTORS Income Statement Analysis

• Operating income during the year rose 30.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 72.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 9.2% in FY18 as against 7.0% in FY17.
• Depreciation charges and finance costs increased by 17.9% YoY and 467.3% YoY, respectively.
• Other income declined by 12.1% YoY.
• Net profit for the year grew by 30.5% YoY.
• Net profit margins during the year grew from 4.0% in FY17 to 4.0% in FY18.

TVS MOTORS Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	124,626	162,945	30.7%
Other income	Rs m	1,654	1,454	-12.1%
Total Revenues	Rs m	126,281	164,399	30.2%
Gross profit	Rs m	8,688	14,967	72.3%
Depreciation	Rs m	3,168	3,736	17.9%
Interest	Rs m	596	3,382	467.3%
Profit before tax	Rs m	6,578	9,302	41.4%
Tax	Rs m	1,487	2,660	78.9%
Profit after tax	Rs m	5,093	6,648	30.5%
Gross profit margin	%	7.0	9.2
Effective tax rate	%	22.6	28.6
Net profit margin	%	4.0	4.0

TVS MOTORS Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 79 billion as compared to Rs 32 billion in FY17, thereby witnessing an increase of 144.7%.
• Long-term debt stood at Rs 24 billion as compared to Rs 5 billion during FY17, a growth of 371.0%.
• Current assets rose 162% and stood at Rs 64 billion, while fixed assets rose 32% and stood at Rs 31 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 132 billion as against Rs 61 billion during FY17, thereby witnessing a growth of 116%.

TVS MOTORS Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	22,160	26,772	20.8
Current Liabilities	Rs m	32,086	78,531	144.7
Long-term Debt	Rs m	5,012	23,609	371.0
Total Liabilities	Rs m	61,280	132,135	115.6
Current assets	Rs m	24,343	63,729	161.8
Fixed Assets	Rs m	23,701	31,209	31.7
Total Assets	Rs m	61,280	132,135	115.6

TVS MOTORS Cash Flow Statement Analysis

• TVS MOTORS's cash flow from operating activities (CFO) during FY18 stood at Rs 3 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -10 billion, an improvement of 48.0% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs 9 billion, an improvement of 1,621% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 2 billion from the Rs -785 million net cash flows seen during FY17.

TVS MOTORS Cash Flow Statement 2017-18

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-17	Mar-18
Cash Flow from Operating Activities	Rs m	6,894	3,087	-55.2%
Cash Flow from Investing Activities	Rs m	-7,090	-10,494	-
Cash Flow from Financing Activities	Rs m	-589	8,965	-
Net Cash Flow	Rs m	-785	1,558	-

Current Valuations for TVS MOTORS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 14.0, an improvement from the EPS of Rs 10.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 517.2, stands at 36.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 10.9 times, while the price to sales ratio stands at 1.8 times.
• The company's price to cash flow (P/CF) ratio stood at 23.7 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Sales per share (Unadj.)	Rs	262.3	343.0
TTM Earnings per share	Rs	10.7	14.0
Diluted earnings per share	Rs	10.7	14.0
Price to Cash Flow	x	29.7	23.7
TTM P/E ratio	x	36.1	36.1
Price / Book Value ratio	x	7.7	10.9
Market Cap	Rs m	245,693	245,693
Dividends per share (Unadj.)	Rs	2.5	3.3

Ratio Analysis for TVS MOTORS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.8x during FY18, from 0.8x during FY17. 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 3.8x during FY18, from 12.0x during FY17. 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 24.8% during FY18, from 23.0% during FY18. 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 25.2% during FY18, from 26.4% during FY17. 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 7.6% during FY18, from 9.3% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Current ratio	x	0.8	0.8
Debtors’ Days	Days	21	24
Interest coverage	x	12.0	3.8
Debt to equity ratio	x	0.2	0.9
Return on assets	%	9.3	7.6
Return on equity	%	23.0	24.8
Return on capital employed	%	26.4	25.2

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

TVS MOTORS Share Price Performance

Over the last one year, TVS MOTORS share price has moved up from Rs 581.0 to Rs 517.2, registering a loss of Rs 63.9 or around 11.0%.

Meanwhile, the S&P BSE AUTO Index is trading at Rs 24,433.1 (up 0.7%). Over the last one year it has moved up from 23,814.2 to 24,433.1, a gain of 619 points (up 2.6%).

Overall, the S&P BSE SENSEX is up 19.4% over the year.

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