RATING

RECOMMENDATION

Strong Sell

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  • Available in Depository:

  • NSDL

  • CDSL

  • Available for Investment:

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  • Secondary

RATING

RECOMMENDATION

Strong Sell

Business Type

Traditional Business

RATING

RECOMMENDATION

Strong Sell

Business Type

Traditional Business

  • MILTON CYCLE INDUSTRIES Growth

MILTON CYCLE INDUSTRIES Revenue Growth

Growth in %

  • -19.86%

    1 Year

  • -9.17%

    2 Year

  • -5.98%

    3 Year

The company's total revenue has shown a de-growth of 20% in FY20 from FY19, on account of a fall in revenue from operations, which showed a de-growth of 26%. On the other hand, other income of the company grew by a factor of 7x as the company sold some of its fixed assets worth Rs. 7 Cr. in FY20. The fall in the revenue of the company in FY20 was mainly due to industry factors. In FY20, sales contracted a massive 22% in the overall industry as government purchases plunged, as demand for standard bicycles (accounting for half of all bicycles sold in FY20) is driven by government purchases. Government departments procure these bicycles through a tender process and distribute them under various welfare schemes. COVID-19 has also led to the closure of the manufacturing plant in the latter months of FY20, which further reduced the sales of the company. 

MILTON CYCLE INDUSTRIES Net Profit Growth(PAT)

Growth in %

  • 329.54%

    1 Year

  • 91.12%

    2 Year

  • 43.67%

    3 Year

Despite the fall in total revenue of 20% in FY20 compared to FY19, net profit of the company has increased approximately by a factor of 4x. Net income stood at Rs. 278 lakhs in FY20, compared with Rs. 59 lakhs in FY19. There was a sudden increase in the net profits despite the increase in the prices of steel and aluminium in FY20 due to a spurge in supply, which led to the high cost of material consumed per unit of revenue. The primary reason for the increase in net profit is a fall in the total expenses of the company by 7%. Other expenses accounted for most of the change. Other expenses, mainly low repair and maintenance costs, low consumption of stores and spares, and lower advertising expenses, contributed the most to the increase in the net profits in FY20. It must be noted that adjusted net profit (deducting non-recurring sales of fixed assets in other income) stood at a negative Rs. 5 Cr. in FY20.

MILTON CYCLE INDUSTRIES EPS Growth

Growth in %

  • 329.56%

    1 Year

  • 91.13%

    2 Year

  • 43.66%

    3 Year

There has been an increase in the earnings per share of the company, led by an increase in net profits in FY20. The EPS of the company grew by 13% in FY20 from FY19. There were also no changes made to the equity structure of the company. Adjusted EPS of the company (deducting non-recurring sales of fixed assets in other income) stood at a negative Rs. 117 in FY20.

  • MILTON CYCLE INDUSTRIES Book Value Growth

Growth in %

  • 12.97%

    1 Year

  • 9.13%

    2 Year

Book value per share of the company has increased by 13% in FY20, when compared with FY19. The increase in the book value of the company has been entirely brought about by an increase in the net profits of the company in FY20. There were also no transfers or changes made in the general reserves of the company in FY20. 

MILTON CYCLE INDUSTRIES EBITDA Growth

Growth in %

  • 75.99%

    1 Year

  • 24.25%

    2 Year

  • 14.24%

    3 Year

The company's EBITDA in FY20 grew by 76% over FY19. The reason for such growth is judicious control over expenses by the company. In FY20, the company generated Rs. 94 Cr. in revenue, which was Rs. 23 Cr. less than in FY19. Despite that, expenses have fallen by approximately Rs. 2 Cr. The company has cut down on expenses such as advertising and marketing costs, repair and maintenance costs, as well as low consumption of stores and spares. It must be noted that even though the company has increased its EBITDA, revenue per unit of expenses has still gone down by 14% in FY20 from FY19. Adjusted EBITDA of the company (deducting non-recurring sales of fixed assets in other income) stood at a negative Rs. 282 lakhs in FY20.

MILTON CYCLE INDUSTRIES Operating Profit Growth

Growth in %

  • 118.50%

    1 Year

  • 36.84%

    2 Year

  • 24.47%

    3 Year

In FY20, the company made additions to its fixed assets, but there were more deletions of fixed assets, which reduced the total fixed assets of the company. That amounted to lower depreciation in FY20 compared with FY19. This amounts to Rs. 85 lakhs worth of depreciation over Rs. 89 lakhs in FY19, resulting in higher growth in EBIT of 119% over 76% growth in EBITDA. Although, adjusted EBIT of the company (deducting non-recurring sales of fixed assets in other income) stood at a negative Rs. 366 lakhs in FY20.

MILTON CYCLE INDUSTRIES Asset Growth

Growth in %

  • 28.19%

    1 Year

  • 5.07%

    2 Year

  • 11.93%

    3 Year

Total assets of the Milton Cycle Industries grew by 28% in FY20 over FY19. This has been brought about by a growth in the current assets of 38% in FY20 over FY19, which led to current assets constituting 85% of the total assets. On the other hand, non-current assets of the company showed a de-growth of 9% in FY20 over FY19. Receivables account for 58% of current assets, which displays a lack of the company's ability to collect. An increase in the loan and advances by a factor of 14x due to Rs. 9 Cr. worth of inter-corporate deposit has been given to Atlas Cycles for 90 days, which explains the best for the growth in total assets. 

MILTON CYCLE INDUSTRIES Cash Flow from Operations

Growth in %

  • NA

    1 Year

  • NA

    2 Year

  • NA

    3 Year

In comparison to FY19, cash flow from operations has decreased by approximately Rs. 7 Cr. in FY20. This is due to the company's non-operating activities being deducted from its net profit. Fixed asset sales accounted for the majority of the total. Receivables increased due to poor collection, and a decline in other current liabilities lowered the company's cash flow operations further in FY20.

  • MILTON CYCLE INDUSTRIES Solvency Ratios

MILTON CYCLE INDUSTRIES D/E Ratio

Overall debt to equity stance of the company improved in FY20 over FY19, which showed a de-growth of 18%. There was a marginal growth in the debt of the company of 3% in FY20 over FY19. The company did not take any long-term debt. Instead, the company uses cash credit limits to meet its working capital requirements. The total cash credit limit sanctioned to them is Rs. 10 Cr., of which the company has used approximately Rs. 5.9 Cr. in FY20 compared with Rs. 5.7 Cr. in FY19, explaining the growth in the total debt of the company. And, with an increase in the equity of the company, which was a result of an increase in the net profits of the company, has reduced the total debt to equity of the company in FY20. 

MILTON CYCLE INDUSTRIES Current Ratio

Current assets accounted for 85% of the total assets of the company, which is mostly due to the high receivables of the company, worth Rs. 29 Cr. Current assets grew by 38% in FY20 over FY19 on account of Rs. 9 Cr. worth of deposits given to Atlas Cycles. Current liabilities, on the other hand, grew by 31%, on account of an increase in the payables of Rs. 16 Cr. in FY20 over FY19. Overall, taking into consideration of other current assets and other current liabilities, current assets outgrew current liabilities by Rs. 6 Cr, leading to an increase in the current ratio of the company. 

MILTON CYCLE INDUSTRIES Quick Ratio

Inventories constitute 16% of the overall current, which plays a significant role in the company. Despite the growth in quick ratio of 9% in FY20, which exceeds the growth in current ratio of 5%, taking inventories out of consideration led to a poor quick ratio of less than 1.

MILTON CYCLE INDUSTRIES Interest Coverage Ratio

As the company has taken a cash credit limit from the Union Bank of India, the more the company uses from its limit to finance its working capital requirements, the higher the interest expense the company has to incur. The company has taken a cash credit limit with a fixed interest rate of 12% p.a. and the company in FY20 used Rs. 5.7 Cr. of its limits, which led to higher interest expense compared with FY19. On the other hand, the company generated substantial high net profits in FY20, which led to a growth of 99% in the interest coverage ratio of the company.

  • MILTON CYCLE INDUSTRIES Operating Efficiency

The company, due to its prudent cost management, has improved the operating efficiency of the company. The company has realised high net profits, which gave a further boost to the operating efficiency of the company. It must be noted that adjusted operating margins of the company were considerably low when compared with non-adjusted operating efficiency margins. Adjusted EBIT, PBT and PAT margins were negative 4.2%, negative 5% and negative 5.7%, respectively, in FY20.

MILTON CYCLE INDUSTRIES Operating Profit EBIT Margin(OPM)

MILTON CYCLE INDUSTRIES Profit Before Tax Margin (PBT Margin)

MILTON CYCLE INDUSTRIES Profit After Tax Margin (PAT Margin)

  • MILTON CYCLE INDUSTRIES Profitablity Ratio

Overall profitable ratios have increased, but adjusted ROE, ROCE and ROA have witnessed a spread of 55%, 55% and 14% respectively from non-adjusted profitability indicators, which implies a significant reduction in the overall profitability position of the company by deducting non-recurring sales of fixed assets in other income in FY20. 

MILTON CYCLE INDUSTRIES Return on Equity(RoE)

ROE witnessed a growth rate of 280% in FY20 over FY19. As per Dupont Analysis, this growth is primarily driven by abnormal growth in the net income margin of the company, which increased by a factor of 6x due to an increase in the net profits of the company, which was a result of other expenses of the company. Asset turnover has declined as the company wasn't able to increase revenue correspondingly with increases in the assets due to lower sales realisation on account of the impact of the purge in government purchases in the overall industry. The equity multiplier witnessed a de-growth of 7% as the company financed most of its assets using cash credit limits and was less reliant on the equity of the company. There is a 

MILTON CYCLE INDUSTRIES Return on Capital Employed(RoCE)

The total capital employed by the company has shown growth of 20% in FY20 over FY19, which was a result of an increase in the overall equity of the company. Growth in ROCE of 95% is a result of an increase in the net profits of the company. 

MILTON CYCLE INDUSTRIES Return to Assets (RoA)

ROA has also been shown to increase by a factor of 4x in FY20 over FY19. Meanwhile, the asset turnover of the company has shown a de-growth of 30%. This indicates that the company's assets were not allocated efficiently to improve sales, but due to prudent cost management, which resulted in high net profits, improved the ROA of the company in FY20. 

  • MILTON CYCLE INDUSTRIES Valuation Ratios

MILTON CYCLE INDUSTRIES Earning Yield