ADANI ENTERPRISES 2018-19 Annual Report Analysis

Sun, 31 Mar

ADANI ENTERPRISES 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.

ADANI ENTERPRISES Income Statement Analysis

• Operating income during the year rose 6.9% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 33.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 4.8% in FY19 as against 7.8% in FY18.
• Depreciation charges decreased by 67.2% and finance costs decreased by 11.4% YoY, respectively.
• Other income declined by 9.3% YoY.
• Net profit for the year declined by 16.1% YoY.
• Net profit margins during the year declined from 1.0% in FY18 to 0.8% in FY19.

ADANI ENTERPRISES Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	384,236	410,564	6.9%
Other income	Rs m	6,395	5,800	-9.3%
Total Revenues	Rs m	390,631	416,364	6.6%
Gross profit	Rs m	29,851	19,848	-33.5%
Depreciation	Rs m	12,679	4,165	-67.2%
Interest	Rs m	18,488	16,373	-11.4%
Profit before tax	Rs m	5,079	5,109	0.6%
Tax	Rs m	1,306	1,943	48.8%
Profit after tax	Rs m	3,773	3,166	-16.1%
Gross profit margin	%	7.8	4.8
Effective tax rate	%	25.7	38.0
Net profit margin	%	1.0	0.8

Download Now: Exclusive Guide About India's Potentially Decade-Long $10 Trillion Bull Run...

ADANI ENTERPRISES Balance Sheet Analysis

• The company's current liabilities during FY19 down at Rs 225 billion as compared to Rs 343 billion in FY18, thereby witnessing an decrease of -34.4%.
• Long-term debt down at Rs 30 billion as compared to Rs 43 billion during FY18, a fall of 30.0%.
• Current assets fell 35% and stood at Rs 231 billion, while fixed assets fell 8% and stood at Rs 191 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 422 billion as against Rs 562 billion during FY18, thereby witnessing a fall of 25%.

ADANI ENTERPRISES Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	150,892	147,559	-2.2
Current Liabilities	Rs m	342,995	225,093	-34.4
Long-term Debt	Rs m	42,730	29,922	-30.0
Total Liabilities	Rs m	561,777	421,869	-24.9
Current assets	Rs m	354,564	231,280	-34.8
Fixed Assets	Rs m	207,213	190,589	-8.0
Total Assets	Rs m	561,777	421,869	-24.9

ADANI ENTERPRISES Cash Flow Statement Analysis

• ADANI ENTERPRISES's cash flow from operating activities (CFO) during FY19 stood at Rs 33 billion, an improvement of 13.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs 18 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -62 billion on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -4 billion from the Rs 4 billion net cash flows seen during FY18.

ADANI ENTERPRISES 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	29,424	33,267	13.1%
Cash Flow from Investing Activities	Rs m	-77,065	18,091	-
Cash Flow from Financing Activities	Rs m	51,196	-61,584	-
Net Cash Flow	Rs m	4,131	-4,356	-

Current Valuations for ADANI ENTERPRISES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 2.9, an decline from the EPS of Rs 3.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 147.4, stands at 60.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.1 times, while the price to sales ratio stands at 0.4 times.
• The company's price to cash flow (P/CF) ratio stood at 25.3 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	349.4	373.3
TTM Earnings per share	Rs	3.4	2.9
Diluted earnings per share	Rs	3.3	2.8
Price to Cash Flow	x	10.8	25.3
TTM P/E ratio	x	42.5	60.5
Price / Book Value ratio	x	1.2	1.3
Market Cap	Rs m	180,616	185,730
Dividends per share (Unadj.)	Rs	0.4	0.4

Ratio Analysis for ADANI ENTERPRISES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.0x during FY19, from 1.0x 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 1.3x during FY19, from 1.3x 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 declined and down at 2.1% during FY19, from 2.5% 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 declined and down at 12.1% during FY19, from 12.2% 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 4.6% during FY19, from 4.0% 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	1.0	1.0
Debtors’ Days	Days	11	13
Interest coverage	x	1.3	1.3
Debt to equity ratio	x	0.3	0.2
Return on assets	%	4.0	4.6
Return on equity	%	2.5	2.1
Return on capital employed	%	12.2	12.1

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

ADANI ENTERPRISES Share Price Performance

Over the last one year, ADANI ENTERPRISES share price has moved down from Rs 156.5 to Rs 147.4, registering a loss of Rs 9.1 or around 5.8%.

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

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

Read: Latest Annual Report Analysis of ADANI ENTERPRISES