MARG 2017-18 Annual Report Analysis

Sat, 31 Mar

MARG 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.

MARG Income Statement Analysis

• Operating income during the year fell 80.4% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 118.6% YoY during the fiscal. Operating profit margins witnessed a growth and stood at 18.4% in FY18 as against 19.4% in FY17.
• Depreciation charges decreased by 70.1% and finance costs decreased by 90.4% YoY, respectively.
• Other income declined by 85.9% YoY.
• Net profit for the year declined by 75.3% YoY.
• Net profit margins during the year declined from 57.8% in FY17 to 72.9% in FY18.

MARG Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	4,549	891	-80.4%
Other income	Rs m	343	49	-85.9%
Total Revenues	Rs m	4,892	939	-80.8%
Gross profit	Rs m	881	-164	-118.6%
Depreciation	Rs m	783	234	-70.1%
Interest	Rs m	3,009	289	-90.4%
Profit before tax	Rs m	-2,568	-639	-75.1%
Tax	Rs m	62	10	-83.4%
Profit after tax	Rs m	-2,630	-649	-75.3%
Gross profit margin	%	19.4	-18.4
Effective tax rate	%	-2.4	-1.6
Net profit margin	%	-57.8	-72.9

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MARG Balance Sheet Analysis

• The company's current liabilities during FY18 down at Rs 37 billion as compared to Rs 45 billion in FY17, thereby witnessing an decrease of -18.8%.
• Current assets fell 3% and stood at Rs 19 billion, while fixed assets fell 44% and stood at Rs 17 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 36 billion as against Rs 50 billion during FY17, thereby witnessing a fall of 28%.

MARG Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	-9,727	-5,550	-42.9
Current Liabilities	Rs m	45,057	36,568	-18.8
Long-term Debt	Rs m	15,695	0	-100.0
Total Liabilities	Rs m	50,443	36,118	-28.4
Current assets	Rs m	19,308	18,742	-2.9
Fixed Assets	Rs m	31,135	17,376	-44.2
Total Assets	Rs m	50,443	36,118	-28.4

MARG Cash Flow Statement Analysis

• MARG's cash flow from operating activities (CFO) during FY18 stood at Rs -1 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -4 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -19 million, an improvement of 98% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -1 billion from the Rs 528 million net cash flows seen during FY17.

MARG 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	1,244	-1,071	-
Cash Flow from Investing Activities	Rs m	300	-4	-
Cash Flow from Financing Activities	Rs m	-1,016	-19	-
Net Cash Flow	Rs m	528	-1,093	-

Current Valuations for MARG

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -17.0, an improvement from the EPS of Rs -69.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 19.8, stands at -7.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at -0.2 times, while the price to sales ratio stands at 0.8 times.
• The company's price to cash flow (P/CF) ratio stood at -1.8 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	119.3	23.4
TTM Earnings per share	Rs	-69.0	-17.0
Diluted earnings per share	Rs	-51.7	-12.8
Price to Cash Flow	x	-0.3	-1.8
TTM P/E ratio	x	-1.9	-7.6
Price / Book Value ratio	x	0.0	-0.1
Market Cap	Rs m	422	765
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for MARG

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.5x during FY18, from 0.4x 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 -1.2x during FY18, from 0.1x 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 declined and down at 11.7% during FY18, from 27.0% 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 6.3% during FY18, from 7.4% 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 -1.0% during FY18, from 0.8% 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	0.4	0.5
Debtors’ Days	Days	26	144
Interest coverage	x	0.1	-1.2
Debt to equity ratio	x	-1.6	0.0
Return on assets	%	0.8	-1.0
Return on equity	%	27.0	11.7
Return on capital employed	%	7.4	6.3

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

MARG Share Price Performance

Over the last one year, MARG share price has moved up from Rs 9.9 to Rs 19.8, registering a gain of Rs 9.9 or around 100.5%.

Meanwhile, the S&P BSE REALTY Index is trading at Rs 2,229.9 (down 1.1%). Over the last one year it has moved up from 0.0 to 2,229.9, a gain of 2,230 points (up 0.0%).

Overall, the S&P BSE SENSEX is up 12.1% over the year.

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