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CESC 2017-18 Annual Report Analysis
Sat, 31 Mar

CESC 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.

CESC Income Statement Analysis

  • Operating income during the year fell 26.5% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 1.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 29.9% in FY18 as against 21.6% in FY17.
  • Depreciation charges increased by 5.1% and finance costs decreased by 4.8% YoY, respectively.
  • Other income grew by 25.4% YoY.
  • Net profit for the year grew by 21.5% YoY.
  • Net profit margins during the year grew from 5.4% in FY17 to 9.0% in FY18.

CESC Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 139,828 102,749 -26.5%
Other income Rs m 3,120 3,912 25.4%
Total Revenues Rs m 142,947 106,661 -25.4%
Gross profit Rs m 30,272 30,752 1.6%
Depreciation Rs m 7,148 7,515 5.1%
Interest Rs m 14,823 14,110 -4.8%
Profit before tax Rs m 11,421 13,040 14.2%
Tax Rs m 3,803 3,785 -0.5%
Profit after tax Rs m 7,618 9,255 21.5%
Gross profit margin % 21.6 29.9
Effective tax rate % 33.3 29.0
Net profit margin % 5.4 9.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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CESC Balance Sheet Analysis

  • The company's current liabilities during FY18 down at Rs 77 billion as compared to Rs 86 billion in FY17, thereby witnessing an decrease of -9.7%.
  • Long-term debt down at Rs 110 billion as compared to Rs 116 billion during FY17, a fall of 4.7%.
  • Current assets fell 14% and stood at Rs 80 billion, while fixed assets fell 11% and stood at Rs 250 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 330 billion as against Rs 375 billion during FY17, thereby witnessing a fall of 12%.

CESC Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 106,106 84,202 -20.6
 
Current Liabilities Rs m 85,594 77,281 -9.7
Long-term Debt Rs m 115,897 110,478 -4.7
Total Liabilities Rs m 374,651 329,863 -12.0
 
Current assets Rs m 93,314 80,051 -14.2
Fixed Assets Rs m 281,337 249,812 -11.2
Total Assets Rs m 374,651 329,863 -12.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



CESC Cash Flow Statement Analysis

  • CESC's cash flow from operating activities (CFO) during FY18 stood at Rs 25 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -12 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -15 billion on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs -6 billion from the Rs 4 billion net cash flows seen during FY17.

CESC 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 26,552 24,686 -7.0%
Cash Flow from Investing Activities Rs m -14,932 -12,298 -
Cash Flow from Financing Activities Rs m -7,599 -14,854 -
Net Cash Flow Rs m 4,021 -6,226 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for CESC

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 69.8, an improvement from the EPS of Rs 57.5 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 967.7, stands at 148.6 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 15.2 times, while the price to sales ratio stands at 1.2 times.
  • The company's price to cash flow (P/CF) ratio stood at 7.9 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 1,054.8 775.1
TTM Earnings per share Rs 57.5 69.8
Diluted earnings per share Rs 5.7 7.0
Price to Cash Flow x 75.5 7.9
TTM P/E ratio x 129.1 148.6
Price / Book Value ratio x 0.8 1.6
Market Cap Rs m 89,678 132,620
Dividends per share (Unadj.) Rs 1.0 1.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for CESC

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 1.0x during FY18, from 1.1x 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 improved and stood at 1.9x during FY18, from 1.8x 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 improved and stood at 11.0% during FY18, from 7.2% 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 13.9% during FY18, from 11.8% 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 improved and stood at 7.1% during FY18, from 6.0% 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 1.1 1.0
Debtors’ Days Days 4 5
Interest coverage x 1.8 1.9
Debt to equity ratio x 1.1 1.3
Return on assets % 6.0 7.1
Return on equity % 7.2 11.0
Return on capital employed % 11.8 13.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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

CESC Share Price Performance

Over the last one year, CESC share price has moved up from Rs 840.8 to Rs 967.7, registering a gain of Rs 126.9 or around 15.1%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 2,125.8 (down 1.1%). Over the last one year it has moved down from 2,274.4 to 2,125.8, a loss of 149 points (down 6.5%).

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

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

Annual Report FAQs

What is the current share price of CESC?

CESC currently trades at Rs 121.4 per share. You can check out the latest share price performance of CESC here...

What was the revenue of CESC in FY18? How does it compare to earlier years?

The revenues of CESC stood at Rs 106,661 m in FY18, which was down -25.4% compared to Rs 142,947 m reported in FY17.

CESC's revenue has grown from Rs 102,963 m in FY14 to Rs 106,661 m in FY18.

Over the past 5 years, the revenue of CESC has grown at a CAGR of 0.9%.

What was the net profit of CESC in FY18? How does it compare to earlier years?

The net profit of CESC stood at Rs 9,255 m in FY18, which was up 21.5% compared to Rs 7,618 m reported in FY17.

This compares to a net profit of Rs 6,651 m in FY16 and a net profit of Rs 2,989 m in FY15.

Over the past 5 years, CESC net profit has grown at a CAGR of 12.7%.

What does the cash flow statement of CESC reveal?

The cash flow statement is the financial statement that presents the cash inflows and outflows of a company during a given period of time.

This statement is one of the most useful tools for judging a company's liquidity position. The ratios and parameters in this statement helps test a company's financial health.

The cash flow statement of CESC reveals:

  • Cash flow from operations decreased in FY18 and stood at Rs 24,686 m as compared to Rs 26,552 m in FY17.
  • Cash flow from investments increased in FY18 and stood at Rs -12,298 m as compared to Rs -14,932 m in FY17.
  • Cash flow from financial activity decreased in FY18 and stood at Rs -14,854 m as compared to Rs -7,599 m in FY17.

Here's the cash flow statement of CESC for the past 5 years.

(Rs m)FY14FY15FY16FY17FY18
From Operations22,5118,89524,80426,55224,686
From Investments-31,803-24,405-12,196-14,932-12,298
From Financial Activity8,22513,309-11,809-7,599-14,854
Net Cashflow-1,067-1,6077994,021-6,226

What does the Key Ratio analysis of CESC reveal?

Be it the company's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.

The ratio/financial analysis of CESC reveals:

  • Operating profit margins witnessed a fall and down at 29.9% in FY18 as against 21.6% in FY17.
  • Net profit margins grew from 5.4% in FY17 to 9.0% in FY18.
  • Debt to Equity ratio for FY18 stood at 1.3 as compared to 1.1 in FY17.

Here's the ratio/financial analysis of CESC for the past 5 years.

 FY14FY15FY16FY17FY18
Operating Profit Margin (%)16.717.825.321.629.9
Net Profit Margin (%)5.72.75.55.49.0
Debt to Equity Ratio (x)1.61.71.01.11.3

Read: Latest Annual Report Analysis of CESC

 

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