M&M 2023-24 Annual Report Analysis

Tue, 2 Jul

M&M has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during FY23-24.

M&M Income Statement Analysis

• Operating income during the year rose 14.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 9.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 18.2% in FY24 as against 19.0% in FY23.
• Depreciation charges increased by 8.4% and finance costs increased by 26.5% YoY, respectively.
• Other income grew by 114.5% YoY.
• Net profit for the year grew by 7.9% YoY.
• Net profit margins during the year declined from 9.4% in FY23 to 8.9% in FY24.

M&M Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	1,212,686	1,382,793	14.0%
Other income	Rs m	14,429	30,948	114.5%
Total Revenues	Rs m	1,227,114	1,413,741	15.2%
Gross profit	Rs m	229,864	252,144	9.7%
Depreciation	Rs m	43,568	47,238	8.4%
Interest	Rs m	60,122	76,076	26.5%
Profit before tax	Rs m	140,602	159,778	13.6%
Tax	Rs m	26,858	37,080	38.1%
Profit after tax	Rs m	113,745	122,698	7.9%
Gross profit margin	%	19.0	18.2
Effective tax rate	%	19.1	23.2
Net profit margin	%	9.4	8.9

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M&M Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 755 billion as compared to Rs 706 billion in FY23, thereby witnessing an increase of 7.0%.
• Long-term debt stood at Rs 697 billion as compared to Rs 554 billion during FY23, a growth of 25.8%.
• Current assets rose 8% and stood at Rs 982 billion, while fixed assets rose 21% and stood at Rs 1,365 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 2,347 billion as against Rs 2,043 billion during FY23, thereby witnessing a growth of 15%.

M&M Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	561,055	658,918	17.4
Current Liabilities	Rs m	705,794	755,457	7.0
Long-term Debt	Rs m	554,274	697,414	25.8
Total Liabilities	Rs m	2,042,763	2,347,217	14.9
Current assets	Rs m	912,688	982,402	7.6
Fixed Assets	Rs m	1,129,509	1,364,561	20.8
Total Assets	Rs m	2,042,763	2,347,217	14.9

M&M Cash Flow Statement Analysis

• M&M's cash flow from operating activities (CFO) during FY24 stood at Rs -56 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -56 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs 123 billion on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 10 billion from the Rs 58 million net cash flows seen during FY23.

M&M Cash Flow Statement 2023-24

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-23	Mar-24
Cash Flow from Operating Activities	Rs m	-70,740	-56,300	-
Cash Flow from Investing Activities	Rs m	-85,473	-55,978	-
Cash Flow from Financing Activities	Rs m	159,461	122,814	-23.0%
Net Cash Flow	Rs m	58	10,367	17,712.5%

Current Valuations for M&M

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 110.1, an improvement from the EPS of Rs 102.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,882.4, stands at 32.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.4 times, while the price to sales ratio stands at 2.3 times.
• The company's price to cash flow (P/CF) ratio stood at 10.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Sales per share (Unadj.)	Rs	1,088.9	1,240.4
TTM Earnings per share	Rs	102.1	110.1
Diluted earnings per share	Rs	91.5	98.7
Price to Cash Flow	x	9.2	10.3
TTM P/E ratio	x	14.6	32.2
Price / Book Value ratio	x	2.2	2.6
Market Cap	Rs m	1,227,490	1,744,791
Dividends per share (Unadj.)	Rs	16.3	21.1

Ratio Analysis for M&M

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.3x during FY24, from 1.3x during FY23. 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 3.1x during FY24, from 3.3x during FY23. 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 18.6% during FY24, from 20.3% during FY24. 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 17.4% during FY24, from 18.0% during FY23. 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 8.5% during FY24, from 8.5% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Current ratio	x	1.3	1.3
Debtors’ Days	Days	2	2
Interest coverage	x	3.3	3.1
Debt to equity ratio	x	1.0	1.1
Return on assets	%	8.5	8.5
Return on equity	%	20.3	18.6
Return on capital employed	%	18.0	17.4

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

M&M Share Price Performance

Over the last one year, M&M share price has moved up from Rs 1,453.8 to Rs 2,882.4, registering a gain of Rs 1,428.7 or around 98.3%.

Meanwhile, the S&P BSE AUTO Index is trading at Rs 57,394.7 (down 0.2%). Over the last one year it has moved up from 34,919.7 to 57,394.7, a gain of 22,475 points (up 64.4%).

Overall, the S&P BSE SENSEX is up 24.5% over the year.

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