TECH MAHINDRA 2018-19 Annual Report Analysis

Sun, 31 Mar

TECH MAHINDRA 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.

TECH MAHINDRA Income Statement Analysis

• Operating income during the year rose 12.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 35.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 18.2% in FY19 as against 15.2% in FY18.
• Depreciation charges increased by 4.1% and finance costs decreased by 18.0% YoY, respectively.
• Other income declined by 63.0% YoY.
• Net profit for the year grew by 15.0% YoY.
• Net profit margins during the year grew from 12.3% in FY18 to 12.5% in FY19.

TECH MAHINDRA Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	307,729	347,421	12.9%
Other income	Rs m	14,436	5,342	-63.0%
Total Revenues	Rs m	322,165	352,763	9.5%
Gross profit	Rs m	46,825	63,369	35.3%
Depreciation	Rs m	10,850	11,292	4.1%
Interest	Rs m	1,624	1,332	-18.0%
Profit before tax	Rs m	48,787	56,087	15.0%
Tax	Rs m	10,926	12,544	14.8%
Profit after tax	Rs m	37,861	43,543	15.0%
Gross profit margin	%	15.2	18.2
Effective tax rate	%	22.4	22.4
Net profit margin	%	12.3	12.5

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

TECH MAHINDRA Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 103 billion as compared to Rs 79 billion in FY18, thereby witnessing an increase of 30.5%.
• Long-term debt down at Rs 2 billion as compared to Rs 8 billion during FY18, a fall of 72.9%.
• Current assets rose 19% and stood at Rs 216 billion, while fixed assets fell 4% and stood at Rs 113 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 328 billion as against Rs 299 billion during FY18, thereby witnessing a growth of 10%.

TECH MAHINDRA Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	184,281	198,761	7.9
Current Liabilities	Rs m	79,167	103,312	30.5
Long-term Debt	Rs m	7,711	2,086	-72.9
Total Liabilities	Rs m	298,606	328,378	10.0
Current assets	Rs m	181,070	215,658	19.1
Fixed Assets	Rs m	117,536	112,720	-4.1
Total Assets	Rs m	298,606	328,378	10.0

TECH MAHINDRA Cash Flow Statement Analysis

• TECH MAHINDRA's cash flow from operating activities (CFO) during FY19 stood at Rs 44 billion, an improvement of 24.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -21 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -23 billion on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 766 million from the Rs -352 million net cash flows seen during FY18.

TECH MAHINDRA 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	35,535	44,320	24.7%
Cash Flow from Investing Activities	Rs m	-33,597	-21,164	-
Cash Flow from Financing Activities	Rs m	-2,694	-22,512	-
Net Cash Flow	Rs m	-352	766	-

Current Valuations for TECH MAHINDRA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 49.1, an improvement from the EPS of Rs 42.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 776.2, stands at 17.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.8 times, while the price to sales ratio stands at 2.0 times.
• The company's price to cash flow (P/CF) ratio stood at 11.7 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	348.4	391.6
TTM Earnings per share	Rs	42.9	49.1
Diluted earnings per share	Rs	38.9	44.8
Price to Cash Flow	x	12.7	11.7
TTM P/E ratio	x	18.8	17.6
Price / Book Value ratio	x	2.4	3.2
Market Cap	Rs m	445,855	640,209
Dividends per share (Unadj.)	Rs	14.0	14.0

Ratio Analysis for TECH MAHINDRA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.1x during FY19, from 2.3x 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 43.1x during FY19, from 31.0x 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 21.9% during FY19, from 20.5% 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 28.6% during FY19, from 26.3% 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 13.7% during FY19, from 13.2% 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	2.3	2.1
Debtors’ Days	Days	77	73
Interest coverage	x	31.0	43.1
Debt to equity ratio	x	0.0	0.0
Return on assets	%	13.2	13.7
Return on equity	%	20.5	21.9
Return on capital employed	%	26.3	28.6

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

TECH MAHINDRA Share Price Performance

Over the last one year, TECH MAHINDRA share price has moved up from Rs 638.3 to Rs 776.2, registering a gain of Rs 137.9 or around 21.6%.

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 TECH MAHINDRA and quarterly results for TECH MAHINDRA)

Read: Latest Annual Report Analysis of TECH MAHINDRA