CASTROL INDIA 2017-18 Annual Report Analysis

Mon, 31 Dec

CASTROL INDIA has announced its results for the year ended December 2018. Let us have a look at the detailed performance review of the company during FY17-18.

CASTROL INDIA Income Statement Analysis

• Operating income during the year rose 17.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 3.6% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 27.4% in CY18 as against 31.1% in CY17.
• Depreciation charges increased by 22.1% and finance costs decreased by 9.2% YoY, respectively.
• Other income grew by 0.8% YoY.
• Net profit for the year grew by 2.4% YoY.
• Net profit margins during the year declined from 20.9% in CY17 to 18.1% in CY18.

CASTROL INDIA Income Statement 2017-18

No. of Mths Year Ending		12 Dec-17*	12 Dec-18*	% Change
Net Sales	Rs m	33,171	39,046	17.7%
Other income	Rs m	837	843	0.8%
Total Revenues	Rs m	34,007	39,889	17.3%
Gross profit	Rs m	10,331	10,708	3.6%
Depreciation	Rs m	455	556	22.1%
Interest	Rs m	12	11	-9.2%
Profit before tax	Rs m	10,701	10,984	2.6%
Tax	Rs m	3,783	3,901	3.1%
Profit after tax	Rs m	6,918	7,084	2.4%
Gross profit margin	%	31.1	27.4
Effective tax rate	%	35.3	35.5
Net profit margin	%	20.9	18.1

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CASTROL INDIA Balance Sheet Analysis

• The company's current liabilities during CY18 down at Rs 9 billion as compared to Rs 9 billion in CY17, thereby witnessing an decrease of -1.7%.
• Current assets rose 10% and stood at Rs 17 billion, while fixed assets fell 7% and stood at Rs 3 billion in CY18.
• Overall, the total assets and liabilities for CY18 stood at Rs 21 billion as against Rs 19 billion during CY17, thereby witnessing a growth of 7%.

CASTROL INDIA Balance Sheet as on December 2018

No. of Mths Year Ending		12 Dec-17*	12 Dec-18*	% Change
Networth	Rs m	10,100	11,508	13.9
Current Liabilities	Rs m	9,409	9,252	-1.7
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	19,218	20,535	6.9
Current assets	Rs m	15,717	17,266	9.9
Fixed Assets	Rs m	3,501	3,269	-6.6
Total Assets	Rs m	19,218	20,535	6.9

CASTROL INDIA Cash Flow Statement Analysis

• CASTROL INDIA's cash flow from operating activities (CFO) during CY18 stood at Rs 5 billion on a YoY basis.
• Cash flow from investing activities (CFI) during CY18 stood at Rs 661 million on a YoY basis.
• Cash flow from financial activities (CFF) during CY18 stood at Rs -6 billion, an improvement of 13% on a YoY basis.
• Overall, net cash flows for the company during CY18 stood at Rs 482 million from the Rs 1 billion net cash flows seen during CY17.

CASTROL INDIA Cash Flow Statement 2017-18

Particulars	No. of months	12	12	% Change
	Year Ending	Dec-17	Dec-18
Cash Flow from Operating Activities	Rs m	6,083	5,495	-9.7%
Cash Flow from Investing Activities	Rs m	1,514	661	-56.3%
Cash Flow from Financing Activities	Rs m	-6,558	-5,674	-
Net Cash Flow	Rs m	1,039	482	-53.6%

Current Valuations for CASTROL INDIA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 7.2, an improvement from the EPS of Rs 7.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 151.5, stands at 21.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 13.0 times, while the price to sales ratio stands at 3.8 times.
• The company's price to cash flow (P/CF) ratio stood at 22.6 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Dec-17*	12 Dec-18*
Sales per share (Unadj.)	Rs	33.5	39.5
TTM Earnings per share	Rs	7.0	7.2
Diluted earnings per share	Rs	7.0	7.2
Price to Cash Flow	x	25.9	22.6
TTM P/E ratio	x	27.6	21.1
Price / Book Value ratio	x	31.7	15.0
Market Cap	Rs m	319,709	172,528
Dividends per share (Unadj.)	Rs	7.0	5.0

Ratio Analysis for CASTROL INDIA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.9x during CY18, from 1.7x during CY17. 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 1,008.7x during CY18, from 892.7x during CY17. 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 61.6% during CY18, from 68.5% during CY18. 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 95.5% during CY18, from 106.1% during CY17. 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 34.5% during CY18, from 36.1% during CY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Dec-17*	12 Dec-18*
Current ratio	x	1.7	1.9
Debtors’ Days	Days	3	4
Interest coverage	x	892.7	1,008.7
Debt to equity ratio	x	0.0	0.0
Return on assets	%	36.1	34.5
Return on equity	%	68.5	61.6
Return on capital employed	%	106.1	95.5

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

CASTROL INDIA Share Price Performance

Over the last one year, CASTROL INDIA share price has moved down from Rs 433.1 to Rs 205.1, registering a loss of Rs 228.0 or around 52.6%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 14,614.4 (up 0.1%). Over the last one year it has moved up from 13,563.6 to 14,614.4, a gain of 1,051 points (up 7.7%).

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

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

Read: Latest Annual Report Analysis of CASTROL INDIA