CASTROL INDIA 2018-19 Annual Report Analysis

Tue, 31 Dec

CASTROL INDIA has announced its results for the year ended December 2019. Let us have a look at the detailed performance review of the company during FY18-19.

CASTROL INDIA Income Statement Analysis

• Operating income during the year fell 0.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 7.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 29.7% in CY19 as against 27.4% in CY18.
• Depreciation charges increased by 25.5% and finance costs increased by 9.2% YoY, respectively.
• Other income declined by 23.2% YoY.
• Net profit for the year grew by 16.8% YoY.
• Net profit margins during the year grew from 18.1% in CY18 to 21.3% in CY19.

CASTROL INDIA Income Statement 2018-19

No. of Mths Year Ending		12 Dec-18*	12 Dec-19*	% Change
Net Sales	Rs m	39,046	38,768	-0.7%
Other income	Rs m	843	648	-23.2%
Total Revenues	Rs m	39,889	39,416	-1.2%
Gross profit	Rs m	10,708	11,531	7.7%
Depreciation	Rs m	556	697	25.5%
Interest	Rs m	11	12	9.2%
Profit before tax	Rs m	10,984	11,469	4.4%
Tax	Rs m	3,901	3,195	-18.1%
Profit after tax	Rs m	7,084	8,274	16.8%
Gross profit margin	%	27.4	29.7
Effective tax rate	%	35.5	27.9
Net profit margin	%	18.1	21.3

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CASTROL INDIA Balance Sheet Analysis

• The company's current liabilities during CY19 down at Rs 8 billion as compared to Rs 9 billion in CY18, thereby witnessing an decrease of -9.2%.
• Current assets rose 6% and stood at Rs 18 billion, while fixed assets rose 2% and stood at Rs 3 billion in CY19.
• Overall, the total assets and liabilities for CY19 stood at Rs 22 billion as against Rs 21 billion during CY18, thereby witnessing a growth of 6%.

CASTROL INDIA Balance Sheet as on December 2019

No. of Mths Year Ending		12 Dec-18*	12 Dec-19*	% Change
Networth	Rs m	11,508	13,479	17.1
Current Liabilities	Rs m	9,252	8,404	-9.2
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	20,535	21,703	5.7
Current assets	Rs m	17,266	18,355	6.3
Fixed Assets	Rs m	3,269	3,348	2.4
Total Assets	Rs m	20,535	21,703	5.7

CASTROL INDIA Cash Flow Statement Analysis

• CASTROL INDIA's cash flow from operating activities (CFO) during CY19 stood at Rs 9 billion, an improvement of 60.1% on a YoY basis.
• Cash flow from investing activities (CFI) during CY19 stood at Rs -4 billion on a YoY basis.
• Cash flow from financial activities (CFF) during CY19 stood at Rs -6 billion on a YoY basis.
• Overall, net cash flows for the company during CY19 stood at Rs -2 billion from the Rs 482 million net cash flows seen during CY18.

CASTROL INDIA Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Dec-18	Dec-19
Cash Flow from Operating Activities	Rs m	5,495	8,795	60.1%
Cash Flow from Investing Activities	Rs m	661	-4,483	-
Cash Flow from Financing Activities	Rs m	-5,674	-6,277	-
Net Cash Flow	Rs m	482	-1,965	-

Current Valuations for CASTROL INDIA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 8.4, an improvement from the EPS of Rs 7.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 129.4, stands at 15.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 9.5 times, while the price to sales ratio stands at 3.3 times.
• The company's price to cash flow (P/CF) ratio stood at 15.7 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Dec-18*	12 Dec-19*
Sales per share (Unadj.)	Rs	39.5	39.2
TTM Earnings per share	Rs	7.2	8.4
Diluted earnings per share	Rs	7.2	8.4
Price to Cash Flow	x	19.6	15.7
TTM P/E ratio	x	21.1	15.5
Price / Book Value ratio	x	15.0	10.5
Market Cap	Rs m	172,528	141,222
Dividends per share (Unadj.)	Rs	5.0	5.5

Ratio Analysis for CASTROL INDIA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.2x during CY19, from 1.9x during CY18. 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 964.8x during CY19, from 1,008.7x during CY18. 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 61.4% during CY19, from 61.6% during CY19. 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 85.2% during CY19, from 95.5% during CY18. 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 38.2% during CY19, from 34.5% during CY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Dec-18*	12 Dec-19*
Current ratio	x	1.9	2.2
Debtors’ Days	Days	4	5
Interest coverage	x	1,008.7	964.8
Debt to equity ratio	x	0.0	0.0
Return on assets	%	34.5	38.2
Return on equity	%	61.6	61.4
Return on capital employed	%	95.5	85.2

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 205.1 to Rs 166.5, registering a loss of Rs 38.6 or around 18.8%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 15,269.7 (up 0.9%). Over the last one year it has moved up from 14,614.4 to 15,269.7, a gain of 655 points (up 4.5%).

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