TECH MAHINDRA 2023-24 Annual Report Analysis

Tue, 2 Jul

TECH MAHINDRA 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.

TECH MAHINDRA Income Statement Analysis

• Operating income during the year fell 2.4% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 42.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 8.6% in FY24 as against 14.6% in FY23.
• Depreciation charges decreased by 7.1% and finance costs increased by 20.5% YoY, respectively.
• Other income declined by 0.6% YoY.
• Net profit for the year declined by 50.7% YoY.
• Net profit margins during the year declined from 9.1% in FY23 to 4.6% in FY24.

TECH MAHINDRA Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	532,902	519,955	-2.4%
Other income	Rs m	9,650	9,590	-0.6%
Total Revenues	Rs m	542,552	529,545	-2.4%
Gross profit	Rs m	77,628	44,747	-42.4%
Depreciation	Rs m	19,567	18,171	-7.1%
Interest	Rs m	3,256	3,922	20.5%
Profit before tax	Rs m	64,455	32,244	-50.0%
Tax	Rs m	15,885	8,276	-47.9%
Profit after tax	Rs m	48,570	23,968	-50.7%
Gross profit margin	%	14.6	8.6
Effective tax rate	%	24.6	25.7
Net profit margin	%	9.1	4.6

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TECH MAHINDRA Balance Sheet Analysis

• The company's current liabilities during FY24 down at Rs 126 billion as compared to Rs 133 billion in FY23, thereby witnessing an decrease of -5.3%.
• Long-term debt down at Rs 1 billion as compared to Rs 1 billion during FY23, a fall of 20.4%.
• Current assets fell 4% and stood at Rs 234 billion, while fixed assets fell 9% and stood at Rs 186 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 420 billion as against Rs 449 billion during FY23, thereby witnessing a fall of 6%.

TECH MAHINDRA Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	275,404	263,649	-4.3
Current Liabilities	Rs m	133,210	126,166	-5.3
Long-term Debt	Rs m	1,288	1,025	-20.4
Total Liabilities	Rs m	448,568	419,840	-6.4
Current assets	Rs m	244,327	234,253	-4.1
Fixed Assets	Rs m	204,241	185,587	-9.1
Total Assets	Rs m	448,568	419,840	-6.4

TECH MAHINDRA Cash Flow Statement Analysis

• TECH MAHINDRA's cash flow from operating activities (CFO) during FY24 stood at Rs 64 billion, an improvement of 14.4% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -13 billion, an improvement of 371.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -48 billion, an improvement of 6% on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 3 billion from the Rs 3 billion net cash flows seen during FY23.

TECH MAHINDRA 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	55,720	63,764	14.4%
Cash Flow from Investing Activities	Rs m	-2,785	-13,137	-
Cash Flow from Financing Activities	Rs m	-50,781	-47,672	-
Net Cash Flow	Rs m	2,674	2,908	8.8%

Current Valuations for TECH MAHINDRA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 27.2, an decline from the EPS of Rs 55.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,494.3, stands at 61.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.5 times, while the price to sales ratio stands at 2.5 times.
• The company's price to cash flow (P/CF) ratio stood at 25.1 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	605.6	589.2
TTM Earnings per share	Rs	55.2	27.2
Diluted earnings per share	Rs	49.7	24.5
Price to Cash Flow	x	15.8	25.1
TTM P/E ratio	x	22.1	61.2
Price / Book Value ratio	x	3.9	4.0
Market Cap	Rs m	1,085,239	1,058,564
Dividends per share (Unadj.)	Rs	50.0	40.0

Ratio Analysis for TECH MAHINDRA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.9x during FY24, from 1.8x 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 9.2x during FY24, from 20.8x 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 9.1% during FY24, from 17.6% 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 13.7% during FY24, from 24.5% 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 6.6% during FY24, from 11.6% 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	1.8	1.9
Debtors’ Days	Days	88	80
Interest coverage	x	20.8	9.2
Debt to equity ratio	x	0.0	0.0
Return on assets	%	11.6	6.6
Return on equity	%	17.6	9.1
Return on capital employed	%	24.5	13.7

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 1,130.6 to Rs 1,494.3, registering a gain of Rs 363.8 or around 32.2%.

Meanwhile, the S&P BSE IT Index is trading at Rs 38,240.0 (up 1.6%). Over the last one year it has moved up from 29,876.5 to 38,240.0, a gain of 8,363 points (up 28.0%).

Overall, the S&P BSE SENSEX is up 24.5% over the year.

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