DCM SHRIRAM 2017-18 Annual Report Analysis

Sat, 31 Mar

DCM SHRIRAM 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.

DCM SHRIRAM Income Statement Analysis

• Operating income during the year rose 24.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 33.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 15.1% in FY18 as against 14.1% in FY17.
• Depreciation charges increased by 23.7% and finance costs increased by 16.3% YoY, respectively.
• Other income grew by 29.4% YoY.
• Net profit for the year grew by 21.1% YoY.
• Net profit margins during the year declined from 10.1% in FY17 to 9.8% in FY18.

DCM SHRIRAM Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	54,597	67,943	24.4%
Other income	Rs m	489	632	29.4%
Total Revenues	Rs m	55,086	68,576	24.5%
Gross profit	Rs m	7,690	10,278	33.7%
Depreciation	Rs m	1,137	1,407	23.7%
Interest	Rs m	714	830	16.3%
Profit before tax	Rs m	6,327	8,673	37.1%
Tax	Rs m	804	1,987	147.2%
Profit after tax	Rs m	5,523	6,687	21.1%
Gross profit margin	%	14.1	15.1
Effective tax rate	%	12.7	22.9
Net profit margin	%	10.1	9.8

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DCM SHRIRAM Balance Sheet Analysis

• The company's current liabilities during FY18 down at Rs 21 billion as compared to Rs 27 billion in FY17, thereby witnessing an decrease of -21.5%.
• Long-term debt stood at Rs 5 billion as compared to Rs 5 billion during FY17, a growth of 11.7%.
• Current assets fell 6% and stood at Rs 34 billion, while fixed assets rose 11% and stood at Rs 25 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 59 billion as against Rs 58 billion during FY17, thereby witnessing a growth of 0%.

DCM SHRIRAM Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	25,277	30,395	20.2
Current Liabilities	Rs m	27,318	21,450	-21.5
Long-term Debt	Rs m	4,722	5,272	11.7
Total Liabilities	Rs m	58,422	58,626	0.3
Current assets	Rs m	36,058	33,755	-6.4
Fixed Assets	Rs m	22,364	24,871	11.2
Total Assets	Rs m	58,422	58,626	0.3

DCM SHRIRAM Cash Flow Statement Analysis

• DCM SHRIRAM's cash flow from operating activities (CFO) during FY18 stood at Rs 8 billion, an improvement of 7.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -3 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -6 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -654 million from the Rs 2 billion net cash flows seen during FY17.

DCM SHRIRAM 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	7,725	8,271	7.1%
Cash Flow from Investing Activities	Rs m	-4,115	-3,211	-
Cash Flow from Financing Activities	Rs m	-1,850	-5,714	-
Net Cash Flow	Rs m	1,761	-654	-

Current Valuations for DCM SHRIRAM

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 41.2, an improvement from the EPS of Rs 34.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 423.8, stands at 10.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.2 times, while the price to sales ratio stands at 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 9.3 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	336.1	418.3
TTM Earnings per share	Rs	34.0	41.2
Diluted earnings per share	Rs	35.4	42.9
Price to Cash Flow	x	6.9	9.3
TTM P/E ratio	x	8.3	10.2
Price / Book Value ratio	x	1.4	2.5
Market Cap	Rs m	36,462	75,057
Dividends per share (Unadj.)	Rs	5.8	8.2

Ratio Analysis for DCM SHRIRAM

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.6x during FY18, from 1.3x 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 11.4x during FY18, from 9.9x 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 improved and stood at 22.0% during FY18, from 21.9% 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 26.6% during FY18, from 23.5% 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 improved and stood at 12.8% during FY18, from 10.7% 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	1.3	1.6
Debtors’ Days	Days	7	5
Interest coverage	x	9.9	11.4
Debt to equity ratio	x	0.2	0.2
Return on assets	%	10.7	12.8
Return on equity	%	21.9	22.0
Return on capital employed	%	23.5	26.6

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

DCM SHRIRAM Share Price Performance

Over the last one year, DCM SHRIRAM share price has moved up from Rs 294.8 to Rs 423.8, registering a gain of Rs 129.0 or around 43.8%.

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

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

Read: Latest Annual Report Analysis of DCM SHRIRAM