BHARAT ELECTRONICS 2018-19 Annual Report Analysis

Sun, 31 Mar

BHARAT ELECTRONICS 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.

BHARAT ELECTRONICS Income Statement Analysis

• Operating income during the year rose 17.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 55.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 22.8% in FY19 as against 17.3% in FY18.
• Depreciation charges increased by 24.4% and finance costs increased by 150.5% YoY, respectively.
• Other income declined by 52.5% YoY.
• Net profit for the year grew by 31.3% YoY.
• Net profit margins during the year grew from 13.6% in FY18 to 15.2% in FY19.

BHARAT ELECTRONICS Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	103,164	121,642	17.9%
Other income	Rs m	4,522	2,148	-52.5%
Total Revenues	Rs m	107,687	123,789	15.0%
Gross profit	Rs m	17,829	27,676	55.2%
Depreciation	Rs m	2,717	3,381	24.4%
Interest	Rs m	64	159	150.5%
Profit before tax	Rs m	19,570	26,283	34.3%
Tax	Rs m	5,498	7,803	41.9%
Profit after tax	Rs m	14,073	18,480	31.3%
Gross profit margin	%	17.3	22.8
Effective tax rate	%	28.1	29.7
Net profit margin	%	13.6	15.2

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BHARAT ELECTRONICS Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 104 billion as compared to Rs 99 billion in FY18, thereby witnessing an increase of 5.6%.
• Current assets rose 11% and stood at Rs 159 billion, while fixed assets rose 6% and stood at Rs 45 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 203 billion as against Rs 185 billion during FY18, thereby witnessing a growth of 10%.

BHARAT ELECTRONICS Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	80,157	92,115	14.9
Current Liabilities	Rs m	98,962	104,488	5.6
Long-term Debt	Rs m	333	0	-100.0
Total Liabilities	Rs m	185,305	203,486	9.8
Current assets	Rs m	143,045	158,744	11.0
Fixed Assets	Rs m	42,259	44,741	5.9
Total Assets	Rs m	185,305	203,486	9.8

BHARAT ELECTRONICS Cash Flow Statement Analysis

• BHARAT ELECTRONICS's cash flow from operating activities (CFO) during FY19 stood at Rs 15 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -9 billion, an improvement of 13,877.2% on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -7 billion, an improvement of 45% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -447 million from the Rs -19 billion net cash flows seen during FY18.

BHARAT ELECTRONICS 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	-6,866	15,139	-
Cash Flow from Investing Activities	Rs m	-64	-8,959	-
Cash Flow from Financing Activities	Rs m	-12,024	-6,627	-
Net Cash Flow	Rs m	-18,954	-447	-

Current Valuations for BHARAT ELECTRONICS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 7.6, 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 93.3, stands at 11.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.5 times, while the price to sales ratio stands at 1.9 times.
• The company's price to cash flow (P/CF) ratio stood at 12.3 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	42.3	49.9
TTM Earnings per share	Rs	5.8	7.6
Diluted earnings per share	Rs	5.8	7.6
Price to Cash Flow	x	20.6	12.3
TTM P/E ratio	x	24.7	11.8
Price / Book Value ratio	x	5.1	2.9
Market Cap	Rs m	411,175	269,974
Dividends per share (Unadj.)	Rs	2.0	3.4

Ratio Analysis for BHARAT ELECTRONICS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.5x during FY19, from 1.4x 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 deteriorated and stood at 166.0x during FY19, from 308.7x 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 20.1% during FY19, from 17.6% 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 28.7% during FY19, from 24.4% 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 9.2% during FY19, from 7.6% 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	1.4	1.5
Debtors’ Days	Days	1,774	1,612
Interest coverage	x	308.7	166.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	7.6	9.2
Return on equity	%	17.6	20.1
Return on capital employed	%	24.4	28.7

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

BHARAT ELECTRONICS Share Price Performance

Over the last one year, BHARAT ELECTRONICS share price has moved down from Rs 142.1 to Rs 93.3, registering a loss of Rs 48.8 or around 34.3%.

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

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

Read: Latest Annual Report Analysis of BHARAT ELECTRONICS