JOHNSON CONTROLS HITACHI 2017-18 Annual Report Analysis

Sat, 31 Mar

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

JOHNSON CONTROLS HITACHI Income Statement Analysis

• Operating income during the year rose 21.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 18.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 9.4% in FY18 as against 9.7% in FY17.
• Depreciation charges increased by 2.1% and finance costs decreased by 54.9% YoY, respectively.
• Other income grew by 9.0% YoY.
• Net profit for the year grew by 23.1% YoY.
• Net profit margins during the year grew from 4.7% in FY17 to 4.7% in FY18.

JOHNSON CONTROLS HITACHI Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	17,361	21,125	21.7%
Other income	Rs m	68	74	9.0%
Total Revenues	Rs m	17,428	21,199	21.6%
Gross profit	Rs m	1,678	1,989	18.5%
Depreciation	Rs m	519	529	2.1%
Interest	Rs m	44	20	-54.9%
Profit before tax	Rs m	1,183	1,514	27.9%
Tax	Rs m	370	512	38.5%
Profit after tax	Rs m	813	1,002	23.1%
Gross profit margin	%	9.7	9.4
Effective tax rate	%	31.3	33.8
Net profit margin	%	4.7	4.7

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JOHNSON CONTROLS HITACHI Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 7 billion as compared to Rs 7 billion in FY17, thereby witnessing an increase of 7.6%.
• Current assets rose 20% and stood at Rs 10 billion, while fixed assets rose 5% and stood at Rs 4 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 14 billion as against Rs 12 billion during FY17, thereby witnessing a growth of 15%.

JOHNSON CONTROLS HITACHI Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	4,402	5,352	21.6
Current Liabilities	Rs m	6,721	7,232	7.6
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	12,377	14,233	15.0
Current assets	Rs m	8,499	10,156	19.5
Fixed Assets	Rs m	3,879	4,077	5.1
Total Assets	Rs m	12,377	14,233	15.0

JOHNSON CONTROLS HITACHI Cash Flow Statement Analysis

• JOHNSON CONTROLS HITACHI's cash flow from operating activities (CFO) during FY18 stood at Rs 972 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -320 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -531 million, an improvement of 52% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 122 million from the Rs 199 million net cash flows seen during FY17.

JOHNSON CONTROLS HITACHI Cash Flow Statement 2017-18

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-17	Mar-18
Cash Flow from Operating Activities	Rs m	1,716	972	-43.3%
Cash Flow from Investing Activities	Rs m	-414	-320	-
Cash Flow from Financing Activities	Rs m	-1,102	-531	-
Net Cash Flow	Rs m	199	122	-38.8%

Current Valuations for JOHNSON CONTROLS HITACHI

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 36.8, an improvement from the EPS of Rs 29.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,496.5, stands at 67.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 12.7 times, while the price to sales ratio stands at 3.2 times.
• The company's price to cash flow (P/CF) ratio stood at 39.2 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Sales per share (Unadj.)	Rs	638.5	776.9
TTM Earnings per share	Rs	29.9	36.8
Diluted earnings per share	Rs	29.9	36.8
Price to Cash Flow	x	37.1	39.2
TTM P/E ratio	x	61.0	67.8
Price / Book Value ratio	x	9.3	11.2
Market Cap	Rs m	40,732	60,053
Dividends per share (Unadj.)	Rs	1.5	1.5

Ratio Analysis for JOHNSON CONTROLS HITACHI

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x during FY18, from 1.3x during FY17. 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 77.4x during FY18, from 27.9x during FY17. 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 18.7% during FY18, from 18.5% during FY18. 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 28.7% during FY18, from 27.9% during FY17. 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 7.2% during FY18, from 6.9% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Current ratio	x	1.3	1.4
Debtors’ Days	Days	59	72
Interest coverage	x	27.9	77.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	6.9	7.2
Return on equity	%	18.5	18.7
Return on capital employed	%	27.9	28.7

To see how JOHNSON CONTROLS HITACHI has performed over the last 5 years, please visit here.

JOHNSON CONTROLS HITACHI Share Price Performance

Over the last one year, JOHNSON CONTROLS HITACHI share price has moved up from Rs 1,818.3 to Rs 2,496.5, registering a gain of Rs 678.2 or around 37.3%.

Meanwhile, the S&P BSE CONSUMER DURABLES Index is trading at Rs 22,261.9 (up 0.2%). Over the last one year it has moved up from 15,257.3 to 22,261.9, a gain of 7,005 points (up 45.9%).

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

(To know more, check out historical annual results for JOHNSON CONTROLS HITACHI and quarterly results for JOHNSON CONTROLS HITACHI)

Read: Latest Annual Report Analysis of JOHNSON CONTROLS HITACHI