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CLARIANT CHEMICALS 2017-18 Annual Report Analysis

Sat, 31 Mar

CLARIANT CHEMICALS 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.

CLARIANT CHEMICALS Income Statement Analysis

• Operating income during the year rose 10.7% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 34.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 4.4% in FY18 as against 7.4% in FY17.
• Depreciation charges decreased by 4.5% and finance costs increased by 29.2% YoY, respectively.
• Other income grew by 205.0% YoY.
• Net profit for the year declined by 11.8% YoY.
• Net profit margins during the year declined from 2.7% in FY17 to 2.2% in FY18.

CLARIANT CHEMICALS Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	9,023	9,984	10.7%
Other income	Rs m	91	278	205.0%
Total Revenues	Rs m	9,114	10,262	12.6%
Gross profit	Rs m	671	440	-34.5%
Depreciation	Rs m	395	377	-4.5%
Interest	Rs m	5	6	29.2%
Profit before tax	Rs m	363	334	-7.9%
Tax	Rs m	118	118	0.1%
Profit after tax	Rs m	245	216	-11.8%
Gross profit margin	%	7.4	4.4
Effective tax rate	%	32.5	35.4
Net profit margin	%	2.7	2.2

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CLARIANT CHEMICALS Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 2 billion as compared to Rs 2 billion in FY17, thereby witnessing an increase of 0.7%.
• Current assets fell 8% and stood at Rs 5 billion, while fixed assets fell 0% and stood at Rs 4 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 9 billion as against Rs 9 billion during FY17, thereby witnessing a fall of 4%.

CLARIANT CHEMICALS Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	6,729	6,246	-7.2
Current Liabilities	Rs m	2,333	2,349	0.7
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	9,332	8,926	-4.4
Current assets	Rs m	5,097	4,704	-7.7
Fixed Assets	Rs m	4,235	4,222	-0.3
Total Assets	Rs m	9,332	8,926	-4.4

CLARIANT CHEMICALS Cash Flow Statement Analysis

• CLARIANT CHEMICALS's cash flow from operating activities (CFO) during FY18 stood at Rs -11 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs 670 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -701 million on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -41 million from the Rs 29 million net cash flows seen during FY17.

CLARIANT CHEMICALS 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	816	-11	-
Cash Flow from Investing Activities	Rs m	-500	670	-
Cash Flow from Financing Activities	Rs m	-286	-701	-
Net Cash Flow	Rs m	29	-41	-

Current Valuations for CLARIANT CHEMICALS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 9.4, an decline from the EPS of Rs 10.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 532.5, stands at 56.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.0 times, while the price to sales ratio stands at 1.2 times.
• The company's price to cash flow (P/CF) ratio stood at 24.1 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	390.9	432.6
TTM Earnings per share	Rs	10.6	9.4
Diluted earnings per share	Rs	10.6	9.4
Price to Cash Flow	x	25.9	24.1
TTM P/E ratio	x	67.7	56.9
Price / Book Value ratio	x	2.5	2.3
Market Cap	Rs m	16,539	14,287
Dividends per share (Unadj.)	Rs	25.0	5.0

Ratio Analysis for CLARIANT CHEMICALS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.0x during FY18, from 2.2x 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 56.9x during FY18, from 79.4x 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 3.5% during FY18, from 3.6% 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 5.4% during FY18, from 5.5% 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 2.5% during FY18, from 2.7% 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	2.2	2.0
Debtors’ Days	Days	700	650
Interest coverage	x	79.4	56.9
Debt to equity ratio	x	0.0	0.0
Return on assets	%	2.7	2.5
Return on equity	%	3.6	3.5
Return on capital employed	%	5.5	5.4

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

CLARIANT CHEMICALS Share Price Performance

Over the last one year, CLARIANT CHEMICALS share price has moved down from Rs 717.5 to Rs 532.5, registering a loss of Rs 185.1 or around 25.8%.

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

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

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