BHEL 2017-18 Annual Report Analysis

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BHEL 2017-18 Annual Report Analysis
Wed, 19 Dec

BHEL 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.

BHEL Income Statement Analysis

  • Operating income during the year rose 1.6% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 86.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 6.8% in FY18 as against 3.7% in FY17.
  • Depreciation charges decreased by 7.4% and finance costs decreased by 27.4% YoY, respectively.
  • Other income declined by 10.0% YoY.
  • Net profit for the year declined by 3.7% YoY.
  • Net profit margins during the year declined from 1.6% in FY17 to 1.5% in FY18.

BHEL Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 284,770 289,404 1.6%
Other income Rs m 7,532 6,780 -10.0%
Total Revenues Rs m 292,302 296,184 1.3%
Gross profit Rs m 10,570 19,701 86.4%
Depreciation Rs m 8,498 7,873 -7.4%
Interest Rs m 3,513 2,552 -27.4%
Profit before tax Rs m 6,091 16,056 163.6%
Tax Rs m 1,304 7,767 495.7%
Profit after tax Rs m 4,552 4,382 -3.7%
Gross profit margin % 3.7 6.8
Effective tax rate % 21.4 48.4
Net profit margin % 1.6 1.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



BHEL Balance Sheet Analysis

  • The company's current liabilities during FY18 stood at Rs 222 billion as compared to Rs 201 billion in FY17, thereby witnessing an increase of 10.3%.
  • Long-term debt down at Rs 572 million as compared to Rs 896 million during FY17, a fall of 36.1%.
  • Current assets rose 1% and stood at Rs 432 billion, while fixed assets fell 13% and stood at Rs 33 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 635 billion as against Rs 613 billion during FY17, thereby witnessing a growth of 4%.

BHEL Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 323,890 323,350 -0.2
 
Current Liabilities Rs m 201,426 222,115 10.3
Long-term Debt Rs m 896 572 -36.1
Total Liabilities Rs m 613,475 635,447 3.6
 
Current assets Rs m 429,040 431,935 0.7
Fixed Assets Rs m 37,695 32,760 -13.1
Total Assets Rs m 613,475 635,447 3.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



BHEL Cash Flow Statement Analysis

  • BHEL's cash flow from operating activities (CFO) during FY18 stood at Rs 10 billion, an improvement of 76.5% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs 10 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -7 billion on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs 13 billion from the Rs -5 billion net cash flows seen during FY17.

BHEL 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 5,604 9,891 76.5%
Cash Flow from Investing Activities Rs m -5,652 9,612 -
Cash Flow from Financing Activities Rs m -4,679 -6,674 -
Net Cash Flow Rs m -4,726 12,829 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for BHEL

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 1.2, an decline from the EPS of Rs 1.9 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 70.5, stands at 27.2 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.5 times, while the price to sales ratio stands at 1.7 times.
  • The company's price to cash flow (P/CF) ratio stood at 16.0 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 116.3 78.8
TTM Earnings per share Rs 1.9 1.2
Diluted earnings per share Rs 1.2 1.2
Price to Cash Flow x 13.0 16.0
TTM P/E ratio x 18.1 27.2
Price / Book Value ratio x 1.1 1.5
Market Cap Rs m 172,433 258,546
Dividends per share (Unadj.) Rs 0.8 1.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for BHEL

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 1.9x during FY18, from 2.1x 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 deteriorated and stood at 7.3x during FY18, from 2.7x 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 1.4% during FY18, from 1.4% 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 4.5% during FY18, from 2.9% 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 1.1% during FY18, from 1.3% 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 2.1 1.9
Debtors’ Days Days 283 287
Interest coverage x 2.7 7.3
Debt to equity ratio x 0.0 0.0
Return on assets % 1.3 1.1
Return on equity % 1.4 1.4
Return on capital employed % 2.9 4.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

BHEL Share Price Performance

Over the last one year, BHEL share price has moved up from Rs 90.1 to Rs 70.5, registering a loss of Rs 19.7 or around 21.8%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 18,819.8 (up 0.8%). Over the last one year it has moved up from 18,565.4 to 18,819.8, a gain of 254 points (up 1.4%).

Overall, the S&P BSE SENSEX is up 8.7% over the year.

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

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