CENTURY ENKA 2017-18 Annual Report Analysis

Sat, 31 Mar

CENTURY ENKA 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.

CENTURY ENKA Income Statement Analysis

• Operating income during the year rose 34.3% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 20.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 9.9% in FY18 as against 16.7% in FY17.
• Depreciation charges decreased by 1.0% and finance costs decreased by 39.5% YoY, respectively.
• Other income grew by 14.6% YoY.
• Net profit for the year declined by 23.0% YoY.
• Net profit margins during the year declined from 8.8% in FY17 to 5.1% in FY18.

CENTURY ENKA Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	10,314	13,852	34.3%
Other income	Rs m	155	178	14.6%
Total Revenues	Rs m	10,469	14,029	34.0%
Gross profit	Rs m	1,723	1,366	-20.7%
Depreciation	Rs m	424	419	-1.0%
Interest	Rs m	56	34	-39.5%
Profit before tax	Rs m	1,398	1,090	-22.0%
Tax	Rs m	488	389	-20.2%
Profit after tax	Rs m	910	701	-23.0%
Gross profit margin	%	16.7	9.9
Effective tax rate	%	34.9	35.7
Net profit margin	%	8.8	5.1

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CENTURY ENKA Balance Sheet Analysis

• The company's current liabilities during FY18 down at Rs 1 billion as compared to Rs 1 billion in FY17, thereby witnessing an decrease of -3.1%.
• Long-term debt down at Rs 306 million as compared to Rs 371 million during FY17, a fall of 17.4%.
• Current assets rose 9% and stood at Rs 6 billion, while fixed assets rose 0% and stood at Rs 6 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 12 billion as against Rs 11 billion during FY17, thereby witnessing a growth of 4%.

CENTURY ENKA Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	8,544	9,009	5.4
Current Liabilities	Rs m	1,083	1,050	-3.1
Long-term Debt	Rs m	371	306	-17.4
Total Liabilities	Rs m	11,195	11,637	4.0
Current assets	Rs m	5,131	5,572	8.6
Fixed Assets	Rs m	6,064	6,065	0.0
Total Assets	Rs m	11,195	11,637	4.0

CENTURY ENKA Cash Flow Statement Analysis

• CENTURY ENKA's cash flow from operating activities (CFO) during FY18 stood at Rs 561 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -83 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -275 million, an improvement of 36% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 204 million from the Rs -20 million net cash flows seen during FY17.

CENTURY ENKA 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	605	561	-7.3%
Cash Flow from Investing Activities	Rs m	-198	-83	-
Cash Flow from Financing Activities	Rs m	-427	-275	-
Net Cash Flow	Rs m	-20	204	-

Current Valuations for CENTURY ENKA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 32.1, an decline from the EPS of Rs 41.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 301.6, stands at 9.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.7 times, while the price to sales ratio stands at 0.5 times.
• The company's price to cash flow (P/CF) ratio stood at 7.3 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	472.0	634.0
TTM Earnings per share	Rs	41.6	32.1
Diluted earnings per share	Rs	41.6	32.1
Price to Cash Flow	x	7.0	7.3
TTM P/E ratio	x	10.3	9.4
Price / Book Value ratio	x	0.8	0.9
Market Cap	Rs m	6,683	8,147
Dividends per share (Unadj.)	Rs	7.0	7.0

Ratio Analysis for CENTURY ENKA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 5.3x during FY18, from 4.7x 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 33.1x during FY18, from 25.9x 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 7.8% during FY18, from 10.6% 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 declined and down at 12.1% during FY18, from 16.3% 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 6.3% during FY18, from 8.6% 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	4.7	5.3
Debtors’ Days	Days	668	546
Interest coverage	x	25.9	33.1
Debt to equity ratio	x	0.0	0.0
Return on assets	%	8.6	6.3
Return on equity	%	10.6	7.8
Return on capital employed	%	16.3	12.1

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

CENTURY ENKA Share Price Performance

Over the last one year, CENTURY ENKA share price has moved down from Rs 427.4 to Rs 301.6, registering a loss of Rs 125.9 or around 29.4%.

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

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

Read: Latest Annual Report Analysis of CENTURY ENKA