ACC 2017-18 Annual Report Analysis

Mon, 31 Dec

ACC has announced its results for the year ended December 2018. Let us have a look at the detailed performance review of the company during FY17-18.

ACC Income Statement Analysis

• Operating income during the year rose 19.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 7.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 13.8% in CY18 as against 15.4% in CY17.
• Depreciation charges decreased by 6.3% and finance costs decreased by 10.9% YoY, respectively.
• Other income grew by 7.7% YoY.
• Net profit for the year grew by 65.3% YoY.
• Net profit margins during the year grew from 7.4% in CY17 to 10.2% in CY18.

ACC Income Statement 2017-18

No. of Mths Year Ending		12 Dec-17*	12 Dec-18*	% Change
Net Sales	Rs m	123,695	148,016	19.7%
Other income	Rs m	1,350	1,454	7.7%
Total Revenues	Rs m	125,045	149,470	19.5%
Gross profit	Rs m	19,063	20,454	7.3%
Depreciation	Rs m	6,436	6,032	-6.3%
Interest	Rs m	985	878	-10.9%
Profit before tax	Rs m	12,991	14,998	15.4%
Tax	Rs m	3,856	-105	-102.7%
Profit after tax	Rs m	9,136	15,103	65.3%
Gross profit margin	%	15.4	13.8
Effective tax rate	%	29.7	-0.7
Net profit margin	%	7.4	10.2

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ACC Balance Sheet Analysis

• The company's current liabilities during CY18 down at Rs 47 billion as compared to Rs 48 billion in CY17, thereby witnessing an decrease of -1.8%.
• Current assets rose 18% and stood at Rs 67 billion, while fixed assets rose 2% and stood at Rs 94 billion in CY18.
• Overall, the total assets and liabilities for CY18 stood at Rs 161 billion as against Rs 148 billion during CY17, thereby witnessing a growth of 8%.

ACC Balance Sheet as on December 2018

No. of Mths Year Ending		12 Dec-17*	12 Dec-18*	% Change
Networth	Rs m	93,559	105,319	12.6
Current Liabilities	Rs m	47,927	47,062	-1.8
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	148,457	160,560	8.2
Current assets	Rs m	56,549	66,844	18.2
Fixed Assets	Rs m	91,908	93,715	2.0
Total Assets	Rs m	148,457	160,560	8.2

ACC Cash Flow Statement Analysis

• ACC 's cash flow from operating activities (CFO) during CY18 stood at Rs 11 billion on a YoY basis.
• Cash flow from investing activities (CFI) during CY18 stood at Rs -4 billion on a YoY basis.
• Cash flow from financial activities (CFF) during CY18 stood at Rs -4 billion, an improvement of 11% on a YoY basis.
• Overall, net cash flows for the company during CY18 stood at Rs 4 billion from the Rs 8 billion net cash flows seen during CY17.

ACC Cash Flow Statement 2017-18

Particulars	No. of months	12	12	% Change
	Year Ending	Dec-17	Dec-18
Cash Flow from Operating Activities	Rs m	15,545	11,175	-28.1%
Cash Flow from Investing Activities	Rs m	-3,796	-3,644	-
Cash Flow from Financing Activities	Rs m	-4,258	-3,805	-
Net Cash Flow	Rs m	7,500	3,736	-50.2%

Current Valuations for ACC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 80.4, an improvement from the EPS of Rs 48.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,504.8, stands at 18.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.7 times, while the price to sales ratio stands at 1.9 times.
• The company's price to cash flow (P/CF) ratio stood at 13.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Dec-17*	12 Dec-18*
Sales per share (Unadj.)	Rs	658.7	788.2
TTM Earnings per share	Rs	48.6	80.4
Diluted earnings per share	Rs	48.7	80.4
Price to Cash Flow	x	21.2	13.8
TTM P/E ratio	x	36.1	18.7
Price / Book Value ratio	x	3.2	2.8
Market Cap	Rs m	299,014	292,103
Dividends per share (Unadj.)	Rs	26.0	14.0

Ratio Analysis for ACC

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x during CY18, from 1.2x during CY17. 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 18.1x during CY18, from 14.2x during CY17. 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 14.3% during CY18, from 9.8% during CY18. 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 15.1% during CY18, from 14.9% during CY17. 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 10.0% during CY18, from 6.8% during CY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Dec-17*	12 Dec-18*
Current ratio	x	1.2	1.4
Debtors’ Days	Days	2	2
Interest coverage	x	14.2	18.1
Debt to equity ratio	x	0.0	0.0
Return on assets	%	6.8	10.0
Return on equity	%	9.8	14.3
Return on capital employed	%	14.9	15.1

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 1,446.2 to Rs 1,508.2, registering a gain of Rs 62.1 or around 4.3%.

Overall, the S&P BSE SENSEX is up 12.1% 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