MINDTREE 2018-19 Annual Report Analysis

Sun, 31 Mar

MINDTREE 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.

MINDTREE Income Statement Analysis

• Operating income during the year rose 28.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 43.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 15.2% in FY19 as against 13.6% in FY18.
• Depreciation charges decreased by 4.3% and finance costs decreased by 82.8% YoY, respectively.
• Other income declined by 53.0% YoY.
• Net profit for the year grew by 32.3% YoY.
• Net profit margins during the year grew from 10.4% in FY18 to 10.7% in FY19.

MINDTREE Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	54,628	70,215	28.5%
Other income	Rs m	1,902	893	-53.0%
Total Revenues	Rs m	56,530	71,108	25.8%
Gross profit	Rs m	7,405	10,645	43.8%
Depreciation	Rs m	1,715	1,641	-4.3%
Interest	Rs m	169	29	-82.8%
Profit before tax	Rs m	7,423	9,868	32.9%
Tax	Rs m	1,722	2,327	35.1%
Profit after tax	Rs m	5,701	7,541	32.3%
Gross profit margin	%	13.6	15.2
Effective tax rate	%	23.2	23.6
Net profit margin	%	10.4	10.7

Don't Miss: Key Information for Long-term Investors

MINDTREE Balance Sheet Analysis

• The company's current liabilities during FY19 down at Rs 9 billion as compared to Rs 10 billion in FY18, thereby witnessing an decrease of -13.3%.
• Long-term debt down at Rs 5 million as compared to Rs 9 million during FY18, a fall of 44.4%.
• Current assets rose 11% and stood at Rs 28 billion, while fixed assets rose 14% and stood at Rs 14 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 41 billion as against Rs 37 billion during FY18, thereby witnessing a growth of 12%.

MINDTREE Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	27,213	32,896	20.9
Current Liabilities	Rs m	9,857	8,550	-13.3
Long-term Debt	Rs m	9	5	-44.4
Total Liabilities	Rs m	37,047	41,402	11.8
Current assets	Rs m	25,031	27,672	10.6
Fixed Assets	Rs m	12,016	13,730	14.3
Total Assets	Rs m	37,047	41,402	11.8

MINDTREE Cash Flow Statement Analysis

• MINDTREE's cash flow from operating activities (CFO) during FY19 stood at Rs 6 billion, an improvement of 11.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -2 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -5 billion on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -716 million from the Rs 767 million net cash flows seen during FY18.

MINDTREE 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	5,644	6,305	11.7%
Cash Flow from Investing Activities	Rs m	-2,000	-1,933	-
Cash Flow from Financing Activities	Rs m	-2,875	-5,221	-
Net Cash Flow	Rs m	767	-716	-

Current Valuations for MINDTREE

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 45.9, an improvement from the EPS of Rs 34.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 944.0, stands at 20.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.7 times, while the price to sales ratio stands at 2.2 times.
• The company's price to cash flow (P/CF) ratio stood at 17.3 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	333.2	427.6
TTM Earnings per share	Rs	34.8	45.9
Diluted earnings per share	Rs	34.6	45.7
Price to Cash Flow	x	17.2	17.3
TTM P/E ratio	x	22.4	20.6
Price / Book Value ratio	x	3.9	4.8
Market Cap	Rs m	107,208	158,836
Dividends per share (Unadj.)	Rs	11.0	33.0

Ratio Analysis for MINDTREE

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.2x during FY19, from 2.5x 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 improved and stood at 341.3x during FY19, from 44.9x 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 improved and stood at 22.9% during FY19, from 20.9% 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 improved and stood at 30.1% during FY19, from 27.9% 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 18.3% during FY19, from 15.8% 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	2.5	3.2
Debtors’ Days	Days	68	69
Interest coverage	x	44.9	341.3
Debt to equity ratio	x	0.0	0.0
Return on assets	%	15.8	18.3
Return on equity	%	20.9	22.9
Return on capital employed	%	27.9	30.1

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

MINDTREE Share Price Performance

Over the last one year, MINDTREE share price has moved up from Rs 774.0 to Rs 944.0, registering a gain of Rs 170.0 or around 22.0%.

Meanwhile, the S&P BSE IT Index is trading at Rs 15,280.3 (up 0.4%). Over the last one year it has moved up from 12,100.6 to 15,280.3, a gain of 3,180 points (up 26.3%).

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

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

Read: Latest Annual Report Analysis of MINDTREE