TVS MOTORS 2018-19 Annual Report Analysis

Sun, 31 Mar

TVS MOTORS has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

TVS MOTORS Income Statement Analysis

• Operating income during the year rose 26.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 40.1% YoY during the fiscal. Operating profit margins witnessed a fall and down at 10.7% in FY19 as against 9.7% in FY18.
• Depreciation charges increased by 18.2% and finance costs increased by 96.1% YoY, respectively.
• Other income declined by 74.5% YoY.
• Net profit for the year grew by 9.0% YoY.
• Net profit margins during the year declined from 4.2% in FY18 to 3.6% in FY19.

TVS MOTORS Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	159,788	201,600	26.2%
Other income	Rs m	996	254	-74.5%
Total Revenues	Rs m	160,784	201,854	25.5%
Gross profit	Rs m	15,425	21,608	40.1%
Depreciation	Rs m	3,736	4,417	18.2%
Interest	Rs m	3,382	6,634	96.1%
Profit before tax	Rs m	9,302	10,812	16.2%
Tax	Rs m	2,660	3,575	34.4%
Profit after tax	Rs m	6,642	7,237	9.0%
Gross profit margin	%	9.7	10.7
Effective tax rate	%	28.6	33.1
Net profit margin	%	4.2	3.6

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TVS MOTORS Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 82 billion as compared to Rs 78 billion in FY18, thereby witnessing an increase of 4.5%.
• Long-term debt stood at Rs 49 billion as compared to Rs 24 billion during FY18, a growth of 107.9%.
• Current assets rose 32% and stood at Rs 83 billion, while fixed assets rose 22% and stood at Rs 84 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 167 billion as against Rs 132 billion during FY18, thereby witnessing a growth of 27%.

TVS MOTORS Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	26,772	31,702	18.4
Current Liabilities	Rs m	78,299	81,848	4.5
Long-term Debt	Rs m	23,609	49,092	107.9
Total Liabilities	Rs m	131,903	166,965	26.6
Current assets	Rs m	63,247	83,317	31.7
Fixed Assets	Rs m	68,656	83,648	21.8
Total Assets	Rs m	131,903	166,965	26.6

TVS MOTORS Cash Flow Statement Analysis

• TVS MOTORS's cash flow from operating activities (CFO) during FY19 stood at Rs -9 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -11 billion, an improvement of 0.8% on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs 22 billion, an improvement of 146% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 2 billion from the Rs 2 billion net cash flows seen during FY18.

TVS MOTORS Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	3,544	-9,179	-
Cash Flow from Investing Activities	Rs m	-10,952	-11,036	-
Cash Flow from Financing Activities	Rs m	8,965	22,098	146.5%
Net Cash Flow	Rs m	1,558	1,882	20.8%

Current Valuations for TVS MOTORS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 15.2, an improvement from the EPS of Rs 14.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 474.5, stands at 33.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 7.1 times, while the price to sales ratio stands at 1.1 times.
• The company's price to cash flow (P/CF) ratio stood at 23.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	336.3	424.3
TTM Earnings per share	Rs	14.0	15.2
Diluted earnings per share	Rs	14.0	15.2
Price to Cash Flow	x	28.2	23.3
TTM P/E ratio	x	44.2	33.6
Price / Book Value ratio	x	10.9	8.6
Market Cap	Rs m	290,967	271,251
Dividends per share (Unadj.)	Rs	3.3	3.5

Ratio Analysis for TVS MOTORS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.0x during FY19, from 0.8x during FY18. 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 2.6x during FY19, from 3.8x during FY18. 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 22.8% during FY19, from 24.8% during FY19. 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 21.6% during FY19, from 25.2% during FY18. 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 8.3% during FY19, from 7.6% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	0.8	1.0
Debtors’ Days	Days	2	3
Interest coverage	x	3.8	2.6
Debt to equity ratio	x	0.9	1.5
Return on assets	%	7.6	8.3
Return on equity	%	24.8	22.8
Return on capital employed	%	25.2	21.6

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 down from Rs 617.0 to Rs 474.5, registering a loss of Rs 142.5 or around 23.1%.

Meanwhile, the S&P BSE AUTO Index is trading at Rs 18,824.9 (up 1.2%). Over the last one year it has moved down from 24,057.3 to 18,824.9, a loss of 5,232 points (down 21.7%).

Overall, the S&P BSE SENSEX is up 16.3% over the year.

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

Read: Latest Annual Report Analysis of TVS MOTORS