BEML 2017-18 Annual Report Analysis

Sat, 31 Mar

BEML 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.

BEML Income Statement Analysis

• Operating income during the year rose 47.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 69.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 8.1% in FY18 as against 7.1% in FY17.
• Depreciation charges increased by 4.1% and finance costs increased by 0.0% YoY, respectively.
• Other income declined by 60.0% YoY.
• Net profit for the year grew by 53.0% YoY.
• Net profit margins during the year grew from 3.9% in FY17 to 4.1% in FY18.

BEML Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	21,590	31,795	47.3%
Other income	Rs m	626	250	-60.0%
Total Revenues	Rs m	22,216	32,045	44.2%
Gross profit	Rs m	1,531	2,591	69.2%
Depreciation	Rs m	628	654	4.1%
Interest	Rs m	546	547	0.0%
Profit before tax	Rs m	983	1,641	66.9%
Tax	Rs m	135	344	154.7%
Profit after tax	Rs m	848	1,297	53.0%
Gross profit margin	%	7.1	8.1
Effective tax rate	%	13.7	21.0
Net profit margin	%	3.9	4.1

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BEML Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 17 billion as compared to Rs 17 billion in FY17, thereby witnessing an increase of 1.0%.
• Long-term debt down at Rs 3 billion as compared to Rs 3 billion during FY17, a fall of 1.9%.
• Current assets rose 0% and stood at Rs 38 billion, while fixed assets fell 3% and stood at Rs 7 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 46 billion as against Rs 46 billion during FY17, thereby witnessing a fall of 0%.

BEML Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	21,824	22,011	0.9
Current Liabilities	Rs m	16,952	17,125	1.0
Long-term Debt	Rs m	3,105	3,045	-1.9
Total Liabilities	Rs m	45,942	45,799	-0.3
Current assets	Rs m	38,188	38,310	0.3
Fixed Assets	Rs m	7,754	7,489	-3.4
Total Assets	Rs m	45,942	45,799	-0.3

BEML Cash Flow Statement Analysis

• BEML's cash flow from operating activities (CFO) during FY18 stood at Rs 1 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -619 million, an improvement of 4.1% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -1 billion, an improvement of 37% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -328 million from the Rs -111 million net cash flows seen during FY17.

BEML 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	2,086	1,297	-37.8%
Cash Flow from Investing Activities	Rs m	-594	-619	-
Cash Flow from Financing Activities	Rs m	-1,603	-1,007	-
Net Cash Flow	Rs m	-111	-328	-

Current Valuations for BEML

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 31.1, an improvement from the EPS of Rs 20.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,044.2, stands at 33.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.0 times, while the price to sales ratio stands at 1.4 times.
• The company's price to cash flow (P/CF) ratio stood at 31.4 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	518.5	763.6
TTM Earnings per share	Rs	20.4	31.1
Diluted earnings per share	Rs	20.4	31.1
Price to Cash Flow	x	38.4	31.4
TTM P/E ratio	x	67.1	33.6
Price / Book Value ratio	x	2.0	2.8
Market Cap	Rs m	44,689	61,289
Dividends per share (Unadj.)	Rs	8.0	8.0

Ratio Analysis for BEML

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.2x during FY18, from 2.3x 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 4.0x 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 improved and stood at 5.9% during FY18, from 3.9% 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 8.7% during FY18, from 6.1% 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 4.0% during FY18, from 3.0% 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	2.3	2.2
Debtors’ Days	Days	2,419	1,895
Interest coverage	x	2.8	4.0
Debt to equity ratio	x	0.1	0.1
Return on assets	%	3.0	4.0
Return on equity	%	3.9	5.9
Return on capital employed	%	6.1	8.7

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

BEML Share Price Performance

Over the last one year, BEML share price has moved down from Rs 1,360.7 to Rs 1,044.2, registering a loss of Rs 316.6 or around 23.3%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 18,476.7 (down 0.1%). Over the last one year it has moved up from 16,446.0 to 18,476.7, a gain of 2,031 points (up 12.3%).

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

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

Read: Latest Annual Report Analysis of BEML