BIRLA CORP 2017-18 Annual Report Analysis

Sat, 31 Mar

BIRLA CORPORATION 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.

BIRLA CORPORATION Income Statement Analysis

• Operating income during the year rose 48.6% on a year-on-year (YoY) basis.
• The company's operating profit increased by 29.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 14.4% in FY18 as against 16.6% in FY17.
• Depreciation charges increased by 30.0% and finance costs increased by 36.4% YoY, respectively.
• Other income declined by 49.6% YoY.
• Net profit for the year declined by 29.9% YoY.
• Net profit margins during the year declined from 5.9% in FY17 to 2.8% in FY18.

BIRLA CORPORATION Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	37,141	55,210	48.6%
Other income	Rs m	1,469	740	-49.6%
Total Revenues	Rs m	38,610	55,950	44.9%
Gross profit	Rs m	6,157	7,956	29.2%
Depreciation	Rs m	2,555	3,322	30.0%
Interest	Rs m	2,768	3,776	36.4%
Profit before tax	Rs m	2,303	1,598	-30.6%
Tax	Rs m	108	59	-45.6%
Profit after tax	Rs m	2,195	1,540	-29.9%
Gross profit margin	%	16.6	14.4
Effective tax rate	%	4.7	3.7
Net profit margin	%	5.9	2.8

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BIRLA CORPORATION Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 16 billion as compared to Rs 12 billion in FY17, thereby witnessing an increase of 27.9%.
• Long-term debt down at Rs 38 billion as compared to Rs 40 billion during FY17, a fall of 5.4%.
• Current assets rose 17% and stood at Rs 25 billion, while fixed assets rose 13% and stood at Rs 86 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 111 billion as against Rs 97 billion during FY17, thereby witnessing a growth of 14%.

BIRLA CORPORATION Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	32,862	42,798	30.2
Current Liabilities	Rs m	12,442	15,914	27.9
Long-term Debt	Rs m	40,491	38,298	-5.4
Total Liabilities	Rs m	96,978	110,746	14.2
Current assets	Rs m	20,948	24,539	17.1
Fixed Assets	Rs m	76,030	86,206	13.4
Total Assets	Rs m	96,978	110,746	14.2

BIRLA CORPORATION Cash Flow Statement Analysis

• BIRLA CORPORATION's cash flow from operating activities (CFO) during FY18 stood at Rs 8 billion, an improvement of 18.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -2 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -6 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 153 million from the Rs -240 million net cash flows seen during FY17.

BIRLA CORPORATION 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	6,773	8,049	18.8%
Cash Flow from Investing Activities	Rs m	-9,816	-2,344	-
Cash Flow from Financing Activities	Rs m	2,803	-5,552	-
Net Cash Flow	Rs m	-240	153	-

Current Valuations for BIRLA CORPORATION

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 20.0, an decline from the EPS of Rs 28.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 713.3, stands at 35.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.3 times, while the price to sales ratio stands at 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 15.6 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	482.3	716.9
TTM Earnings per share	Rs	28.5	20.0
Diluted earnings per share	Rs	28.5	20.0
Price to Cash Flow	x	12.0	15.6
TTM P/E ratio	x	25.8	35.7
Price / Book Value ratio	x	1.4	1.8
Market Cap	Rs m	45,115	76,043
Dividends per share (Unadj.)	Rs	6.5	6.5

Ratio Analysis for BIRLA CORPORATION

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.5x during FY18, from 1.7x 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 deteriorated and stood at 1.4x during FY18, from 1.8x 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 3.6% during FY18, from 6.7% 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 declined and down at 6.6% during FY18, from 6.9% 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 4.8% during FY18, from 5.1% 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	1.7	1.5
Debtors’ Days	Days	130	1
Interest coverage	x	1.8	1.4
Debt to equity ratio	x	1.2	0.9
Return on assets	%	5.1	4.8
Return on equity	%	6.7	3.6
Return on capital employed	%	6.9	6.6

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

BIRLA CORPORATION Share Price Performance

Over the last one year, BIRLA CORPORATION share price has moved down from Rs 738.7 to Rs 713.3, registering a loss of Rs 25.4 or around 3.4%.

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

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

Read: Latest Annual Report Analysis of BIRLA CORPORATION