ARCHIES 2018-19 Annual Report Analysis

Sun, 31 Mar

ARCHIES 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.

ARCHIES Income Statement Analysis

• Operating income during the year rose 2.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 164.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 3.2% in FY19 as against 1.2% in FY18.
• Depreciation charges decreased by 11.3% and finance costs decreased by 4.5% YoY, respectively.
• Other income declined by 9.1% YoY.
• Net profit for the year declined by 130.6% YoY.
• Net profit margins during the year grew from 1.5% in FY18 to 0.4% in FY19.

ARCHIES Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	1,574	1,614	2.5%
Other income	Rs m	20	18	-9.1%
Total Revenues	Rs m	1,595	1,632	2.3%
Gross profit	Rs m	20	52	164.2%
Depreciation	Rs m	40	36	-11.3%
Interest	Rs m	28	27	-4.5%
Profit before tax	Rs m	-29	7	-125.3%
Tax	Rs m	-5	0	-100.2%
Profit after tax	Rs m	-24	7	-130.6%
Gross profit margin	%	1.2	3.2
Effective tax rate	%	17.7	0.1
Net profit margin	%	-1.5	0.4

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ARCHIES Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 464 million as compared to Rs 440 million in FY18, thereby witnessing an increase of 5.4%.
• Current assets rose 2% and stood at Rs 812 million, while fixed assets rose 2% and stood at Rs 873 million in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 2 billion as against Rs 2 billion during FY18, thereby witnessing a growth of 2%.

ARCHIES Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	1,175	1,180	0.4
Current Liabilities	Rs m	440	464	5.4
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	1,658	1,685	1.6
Current assets	Rs m	798	812	1.7
Fixed Assets	Rs m	859	873	1.6
Total Assets	Rs m	1,658	1,685	1.6

ARCHIES Cash Flow Statement Analysis

• ARCHIES's cash flow from operating activities (CFO) during FY19 stood at Rs 72 million, an improvement of 71.9% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -39 million, an improvement of 7.8% on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -25 million on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 9 million from the Rs 0 million net cash flows seen during FY18.

ARCHIES 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	42	72	71.9%
Cash Flow from Investing Activities	Rs m	-36	-39	-
Cash Flow from Financing Activities	Rs m	-6	-25	-
Net Cash Flow	Rs m	0	9	6,021.4%

Current Valuations for ARCHIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.2, an improvement from the EPS of Rs -0.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 25.2, stands at 117.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.7 times, while the price to sales ratio stands at 0.5 times.
• The company's price to cash flow (P/CF) ratio stood at 26.3 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	46.6	47.8
TTM Earnings per share	Rs	-0.7	0.2
Diluted earnings per share	Rs	-0.7	0.2
Price to Cash Flow	x	64.6	26.3
TTM P/E ratio	x	-45.2	117.1
Price / Book Value ratio	x	1.1	1.0
Market Cap	Rs m	1,323	1,131
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for ARCHIES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.8x during FY19, from 1.8x 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 0.0x 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 improved and stood at 0.6% during FY19, from -2.0% 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 improved and stood at 2.9% during FY19, from 0.0% 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 2.0% during FY19, from 0.3% 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	1.8	1.8
Debtors’ Days	Days	510	432
Interest coverage	x	0.0	1.3
Debt to equity ratio	x	0.0	0.0
Return on assets	%	0.3	2.0
Return on equity	%	-2.0	0.6
Return on capital employed	%	0.0	2.9

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

ARCHIES Share Price Performance

Over the last one year, ARCHIES share price has moved down from Rs 31.8 to Rs 25.2, registering a loss of Rs 6.6 or around 20.6%.

Meanwhile, the S&P BSE FMCG Index is trading at Rs 11,741.5 (down 0.1%). Over the last one year it has moved up from 10,290.1 to 11,741.5, a gain of 1,451 points (up 14.1%).

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

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

Read: Latest Annual Report Analysis of ARCHIES