MSTC 2023-24 Annual Report Analysis

Wed, 28 Aug

MSTC 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.

MSTC Income Statement Analysis

• Operating income during the year rose 4.1% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 20.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 20.5% in FY24 as against 26.8% in FY23.
• Depreciation charges increased by 10.6% and finance costs increased by 216.7% YoY, respectively.
• Other income grew by 33.1% YoY.
• Net profit for the year declined by 15.5% YoY.
• Net profit margins during the year declined from 33.6% in FY23 to 27.2% in FY24.

MSTC Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	7,210	7,508	4.1%
Other income	Rs m	1,582	2,106	33.1%
Total Revenues	Rs m	8,792	9,614	9.4%
Gross profit	Rs m	1,930	1,543	-20.1%
Depreciation	Rs m	218	242	10.6%
Interest	Rs m	2	5	216.7%
Profit before tax	Rs m	3,292	3,402	3.3%
Tax	Rs m	872	1,358	55.7%
Profit after tax	Rs m	2,420	2,044	-15.5%
Gross profit margin	%	26.8	20.5
Effective tax rate	%	26.5	39.9
Net profit margin	%	33.6	27.2

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MSTC Balance Sheet Analysis

• The company's current liabilities during FY24 down at Rs 13 billion as compared to Rs 18 billion in FY23, thereby witnessing an decrease of -30.4%.
• Current assets fell 21% and stood at Rs 17 billion, while fixed assets rose 13% and stood at Rs 9 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 27 billion as against Rs 30 billion during FY23, thereby witnessing a fall of 12%.

MSTC Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	7,865	8,890	13.0
Current Liabilities	Rs m	17,970	12,504	-30.4
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	30,272	26,604	-12.1
Current assets	Rs m	22,138	17,397	-21.4
Fixed Assets	Rs m	8,108	9,177	13.2
Total Assets	Rs m	30,272	26,604	-12.1

MSTC Cash Flow Statement Analysis

• MSTC's cash flow from operating activities (CFO) during FY24 stood at Rs -3 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -2 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -964 million, an improvement of 19% on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs -7 billion from the Rs 2 billion net cash flows seen during FY23.

MSTC 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	8,443	-3,121	-
Cash Flow from Investing Activities	Rs m	-5,510	-2,441	-
Cash Flow from Financing Activities	Rs m	-1,186	-964	-
Net Cash Flow	Rs m	1,746	-6,527	-

Current Valuations for MSTC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 29.0, an decline from the EPS of Rs 34.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 835.1, stands at 26.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.6 times, while the price to sales ratio stands at 7.8 times.
• The company's price to cash flow (P/CF) ratio stood at 21.8 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	102.4	106.7
TTM Earnings per share	Rs	34.4	29.0
Diluted earnings per share	Rs	34.4	29.0
Price to Cash Flow	x	6.7	21.8
TTM P/E ratio	x	7.3	26.4
Price / Book Value ratio	x	2.7	5.6
Market Cap	Rs m	21,484	49,885
Dividends per share (Unadj.)	Rs	15.0	15.5

Ratio Analysis for MSTC

• 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 deteriorated and stood at 689.6x during FY24, from 2,111.1x 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 23.0% during FY24, from 30.8% 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 38.3% during FY24, from 41.9% 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 7.7% during FY24, from 8.0% 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	2,345	2,525
Interest coverage	x	2,111.1	689.6
Debt to equity ratio	x	0.0	0.0
Return on assets	%	8.0	7.7
Return on equity	%	30.8	23.0
Return on capital employed	%	41.9	38.3

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

MSTC Share Price Performance

Over the last one year, MSTC share price has moved up from Rs 384.9 to Rs 835.1, registering a gain of Rs 450.3 or around 117.0%.

Overall, the S&P BSE SENSEX is up 26.1% over the year.

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