ACC 2018-19 Annual Report Analysis

Tue, 31 Dec

ACC has announced its results for the year ended December 2019. Let us have a look at the detailed performance review of the company during FY18-19.

ACC Income Statement Analysis

• Operating income during the year rose 5.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 17.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 15.4% in CY19 as against 13.8% in CY18.
• Depreciation charges increased by 0.5% and finance costs decreased by 1.7% YoY, respectively.
• Other income grew by 120.6% YoY.
• Net profit for the year declined by 9.7% YoY.
• Net profit margins during the year declined from 10.2% in CY18 to 8.7% in CY19.

ACC Income Statement 2018-19

No. of Mths Year Ending		12 Dec-18*	12 Dec-19*	% Change
Net Sales	Rs m	148,016	156,576	5.8%
Other income	Rs m	1,454	3,208	120.6%
Total Revenues	Rs m	149,470	159,783	6.9%
Gross profit	Rs m	20,454	24,105	17.8%
Depreciation	Rs m	6,032	6,064	0.5%
Interest	Rs m	878	863	-1.7%
Profit before tax	Rs m	14,998	20,385	35.9%
Tax	Rs m	-105	6,750	-6,522.3%
Profit after tax	Rs m	15,103	13,635	-9.7%
Gross profit margin	%	13.8	15.4
Effective tax rate	%	-0.7	33.1
Net profit margin	%	10.2	8.7

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ACC Balance Sheet Analysis

• The company's current liabilities during CY19 down at Rs 47 billion as compared to Rs 47 billion in CY18, thereby witnessing an decrease of -0.2%.
• Current assets rose 13% and stood at Rs 75 billion, while fixed assets rose 2% and stood at Rs 96 billion in CY19.
• Overall, the total assets and liabilities for CY19 stood at Rs 171 billion as against Rs 161 billion during CY18, thereby witnessing a growth of 7%.

ACC Balance Sheet as on December 2019

No. of Mths Year Ending		12 Dec-18*	12 Dec-19*	% Change
Networth	Rs m	105,319	115,438	9.6
Current Liabilities	Rs m	47,062	46,982	-0.2
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	160,560	171,360	6.7
Current assets	Rs m	66,844	75,346	12.7
Fixed Assets	Rs m	93,715	96,014	2.5
Total Assets	Rs m	160,560	171,360	6.7

ACC Cash Flow Statement Analysis

• ACC 's cash flow from operating activities (CFO) during CY19 stood at Rs 23 billion, an improvement of 101.8% on a YoY basis.
• Cash flow from investing activities (CFI) during CY19 stood at Rs -3 billion on a YoY basis.
• Cash flow from financial activities (CFF) during CY19 stood at Rs -4 billion, an improvement of 2% on a YoY basis.
• Overall, net cash flows for the company during CY19 stood at Rs 16 billion from the Rs 4 billion net cash flows seen during CY18.

ACC Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Dec-18	Dec-19
Cash Flow from Operating Activities	Rs m	11,175	22,547	101.8%
Cash Flow from Investing Activities	Rs m	-3,644	-3,217	-
Cash Flow from Financing Activities	Rs m	-3,805	-3,742	-
Net Cash Flow	Rs m	3,736	15,593	317.4%

Current Valuations for ACC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 72.6, an decline from the EPS of Rs 80.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,444.7, stands at 19.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.4 times, while the price to sales ratio stands at 1.7 times.
• The company's price to cash flow (P/CF) ratio stood at 14.7 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Dec-18*	12 Dec-19*
Sales per share (Unadj.)	Rs	788.2	833.8
TTM Earnings per share	Rs	80.4	72.6
Diluted earnings per share	Rs	80.4	72.6
Price to Cash Flow	x	13.4	14.7
TTM P/E ratio	x	18.7	19.9
Price / Book Value ratio	x	2.8	2.5
Market Cap	Rs m	292,103	290,451
Dividends per share (Unadj.)	Rs	14.0	14.0

Ratio Analysis for ACC

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.6x during CY19, from 1.4x during CY18. 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 24.6x during CY19, from 18.1x during CY18. 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 11.8% during CY19, from 14.3% during CY19. 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 18.4% during CY19, from 15.1% during CY18. 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 8.5% during CY19, from 10.0% during CY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Dec-18*	12 Dec-19*
Current ratio	x	1.4	1.6
Debtors’ Days	Days	2	1
Interest coverage	x	18.1	24.6
Debt to equity ratio	x	0.0	0.0
Return on assets	%	10.0	8.5
Return on equity	%	14.3	11.8
Return on capital employed	%	15.1	18.4

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

ACC Share Price Performance

Over the last one year, ACC share price has moved up from Rs 1,508.2 to Rs 1,661.0, registering a gain of Rs 152.8 or around 10.1%.

Overall, the S&P BSE SENSEX is up 16.3% over the year.

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

Read: Latest Annual Report Analysis of ACC