ASHOK LEYLAND 2017-18 Annual Report Analysis

Sat, 31 Mar

ASHOK LEYLAND 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.

ASHOK LEYLAND Income Statement Analysis

• Operating income during the year rose 36.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 27.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 14.4% in FY18 as against 15.4% in FY17.
• Depreciation charges increased by 12.8% and finance costs increased by 17.0% YoY, respectively.
• Other income grew by 36.3% YoY.
• Net profit for the year grew by 10.0% YoY.
• Net profit margins during the year declined from 7.6% in FY17 to 6.2% in FY18.

ASHOK LEYLAND Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	215,521	293,541	36.2%
Other income	Rs m	1,461	1,991	36.3%
Total Revenues	Rs m	216,982	295,532	36.2%
Gross profit	Rs m	33,144	42,325	27.7%
Depreciation	Rs m	5,728	6,459	12.8%
Interest	Rs m	10,488	12,274	17.0%
Profit before tax	Rs m	18,389	25,584	39.1%
Tax	Rs m	1,961	7,511	283.0%
Profit after tax	Rs m	16,428	18,073	10.0%
Gross profit margin	%	15.4	14.4
Effective tax rate	%	10.7	29.4
Net profit margin	%	7.6	6.2

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ASHOK LEYLAND Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 142 billion as compared to Rs 104 billion in FY17, thereby witnessing an increase of 36.5%.
• Long-term debt stood at Rs 102 billion as compared to Rs 89 billion during FY17, a growth of 15.2%.
• Current assets rose 29% and stood at Rs 144 billion, while fixed assets rose 23% and stood at Rs 190 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 334 billion as against Rs 266 billion during FY17, thereby witnessing a growth of 26%.

ASHOK LEYLAND Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	63,660	73,505	15.5
Current Liabilities	Rs m	103,993	141,915	36.5
Long-term Debt	Rs m	88,764	102,281	15.2
Total Liabilities	Rs m	265,548	333,762	25.7
Current assets	Rs m	111,630	144,216	29.2
Fixed Assets	Rs m	153,919	189,547	23.1
Total Assets	Rs m	265,548	333,762	25.7

ASHOK LEYLAND Cash Flow Statement Analysis

• ASHOK LEYLAND's cash flow from operating activities (CFO) during FY18 stood at Rs 15 billion, an improvement of 441.4% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -32 billion, an improvement of 86.8% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs 19 billion, an improvement of 158% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 2 billion from the Rs -7 billion net cash flows seen during FY17.

ASHOK LEYLAND 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	2,701	14,624	441.4%
Cash Flow from Investing Activities	Rs m	-16,949	-31,662	-
Cash Flow from Financing Activities	Rs m	7,377	19,054	158.3%
Net Cash Flow	Rs m	-6,681	2,049	-

Current Valuations for ASHOK LEYLAND

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 6.2, an improvement from the EPS of Rs 5.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 145.3, stands at 27.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.8 times, while the price to sales ratio stands at 1.4 times.
• The company's price to cash flow (P/CF) ratio stood at 13.9 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	75.7	100.3
TTM Earnings per share	Rs	5.8	6.2
Diluted earnings per share	Rs	5.6	6.2
Price to Cash Flow	x	11.2	13.9
TTM P/E ratio	x	21.7	27.0
Price / Book Value ratio	x	4.2	4.6
Market Cap	Rs m	265,236	340,349
Dividends per share (Unadj.)	Rs	1.6	2.4

Ratio Analysis for ASHOK LEYLAND

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.0x during FY18, from 1.1x 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 3.1x during FY18, from 2.8x 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 declined and down at 24.6% during FY18, from 25.8% 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 21.5% during FY18, from 18.9% 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 declined and down at 9.1% during FY18, from 10.1% 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	1.1	1.0
Debtors’ Days	Days	210	1
Interest coverage	x	2.8	3.1
Debt to equity ratio	x	1.4	1.4
Return on assets	%	10.1	9.1
Return on equity	%	25.8	24.6
Return on capital employed	%	18.9	21.5

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

ASHOK LEYLAND Share Price Performance

Over the last one year, ASHOK LEYLAND share price has moved up from Rs 84.6 to Rs 145.3, registering a gain of Rs 60.8 or around 71.9%.

Meanwhile, the S&P BSE AUTO Index is trading at Rs 24,057.3 (down 0.1%). Over the last one year it has moved up from 22,012.7 to 24,057.3, a gain of 2,045 points (up 9.3%).

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

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

Read: Latest Annual Report Analysis of ASHOK LEYLAND