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MRF 2023-24 Annual Report Analysis

Tue, 9 Jul

MRF 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.

MRF Income Statement Analysis

• Operating income during the year rose 9.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 77.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 16.9% in FY24 as against 10.4% in FY23.
• Depreciation charges increased by 14.1% and finance costs increased by 10.6% YoY, respectively.
• Other income grew by 25.4% YoY.
• Net profit for the year grew by 170.7% YoY.
• Net profit margins during the year grew from 3.3% in FY23 to 8.3% in FY24.

MRF Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	230,085	251,692	9.4%
Other income	Rs m	2,527	3,168	25.4%
Total Revenues	Rs m	232,612	254,861	9.6%
Gross profit	Rs m	23,965	42,616	77.8%
Depreciation	Rs m	12,530	14,300	14.1%
Interest	Rs m	3,265	3,610	10.6%
Profit before tax	Rs m	10,697	27,874	160.6%
Tax	Rs m	3,008	7,062	134.8%
Profit after tax	Rs m	7,689	20,812	170.7%
Gross profit margin	%	10.4	16.9
Effective tax rate	%	28.1	25.3
Net profit margin	%	3.3	8.3

For Investors: Our Big Prediction

MRF Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 77 billion as compared to Rs 75 billion in FY23, thereby witnessing an increase of 2.9%.
• Long-term debt down at Rs 7 billion as compared to Rs 8 billion during FY23, a fall of 12.1%.
• Current assets rose 14% and stood at Rs 105 billion, while fixed assets rose 8% and stood at Rs 163 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 268 billion as against Rs 244 billion during FY23, thereby witnessing a growth of 10%.

MRF Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	147,077	167,030	13.6
Current Liabilities	Rs m	74,953	77,100	2.9
Long-term Debt	Rs m	8,236	7,241	-12.1
Total Liabilities	Rs m	243,694	268,494	10.2
Current assets	Rs m	92,412	105,496	14.2
Fixed Assets	Rs m	151,282	162,999	7.7
Total Assets	Rs m	243,694	268,494	10.2

MRF Cash Flow Statement Analysis

• MRF's cash flow from operating activities (CFO) during FY24 stood at Rs 33 billion, an improvement of 19.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -24 billion, an improvement of 23.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -9 billion on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 546 million from the Rs -59 million net cash flows seen during FY23.

MRF 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	27,555	33,005	19.8%
Cash Flow from Investing Activities	Rs m	-19,235	-23,792	-
Cash Flow from Financing Activities	Rs m	-8,395	-8,682	-
Net Cash Flow	Rs m	-59	546	-

Current Valuations for MRF

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 4,908.6, an improvement from the EPS of Rs 1,813.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 128,750.7, stands at 26.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.3 times, while the price to sales ratio stands at 2.2 times.
• The company's price to cash flow (P/CF) ratio stood at 14.2 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	54,265.3	59,361.3
TTM Earnings per share	Rs	1,813.5	4,908.6
Diluted earnings per share	Rs	1,813.1	4,907.3
Price to Cash Flow	x	17.6	14.2
TTM P/E ratio	x	46.4	26.2
Price / Book Value ratio	x	2.3	3.0
Market Cap	Rs m	341,493	497,880
Dividends per share (Unadj.)	Rs	175.0	200.0

Ratio Analysis for MRF

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x during FY24, from 1.2x 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 improved and stood at 8.7x during FY24, from 4.3x 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 improved and stood at 12.5% during FY24, from 5.2% 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 improved and stood at 18.1% during FY24, from 9.0% 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 improved and stood at 9.1% during FY24, from 4.5% 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	1.2	1.4
Debtors’ Days	Days	4	4
Interest coverage	x	4.3	8.7
Debt to equity ratio	x	0.1	0.0
Return on assets	%	4.5	9.1
Return on equity	%	5.2	12.5
Return on capital employed	%	9.0	18.1

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

MRF Share Price Performance

Over the last one year, MRF share price has moved up from Rs 101,187.7 to Rs 128,750.7, registering a gain of Rs 27,563.0 or around 27.2%.

Overall, the S&P BSE SENSEX is up 22.2% over the year.

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