DCM SHRIRAM 2018-19 Annual Report Analysis

Sun, 31 Mar

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

DCM SHRIRAM Income Statement Analysis

• Operating income during the year rose 14.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 32.1% YoY during the fiscal. Operating profit margins witnessed a fall and down at 17.5% in FY19 as against 15.1% in FY18.
• Depreciation charges increased by 11.7% and finance costs increased by 43.2% YoY, respectively.
• Other income grew by 56.3% YoY.
• Net profit for the year grew by 35.0% YoY.
• Net profit margins during the year grew from 9.8% in FY18 to 11.6% in FY19.

DCM SHRIRAM Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	67,943	77,711	14.4%
Other income	Rs m	632	988	56.3%
Total Revenues	Rs m	68,576	78,700	14.8%
Gross profit	Rs m	10,278	13,575	32.1%
Depreciation	Rs m	1,407	1,572	11.7%
Interest	Rs m	830	1,189	43.2%
Profit before tax	Rs m	8,673	11,802	36.1%
Tax	Rs m	1,987	2,776	39.7%
Profit after tax	Rs m	6,687	9,026	35.0%
Gross profit margin	%	15.1	17.5
Effective tax rate	%	22.9	23.5
Net profit margin	%	9.8	11.6

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DCM SHRIRAM Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 29 billion as compared to Rs 21 billion in FY18, thereby witnessing an increase of 37.5%.
• Long-term debt stood at Rs 9 billion as compared to Rs 5 billion during FY18, a growth of 77.7%.
• Current assets rose 30% and stood at Rs 44 billion, while fixed assets rose 29% and stood at Rs 32 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 76 billion as against Rs 59 billion during FY18, thereby witnessing a growth of 30%.

DCM SHRIRAM Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	30,395	35,257	16.0
Current Liabilities	Rs m	21,450	29,485	37.5
Long-term Debt	Rs m	5,272	9,368	77.7
Total Liabilities	Rs m	58,626	75,937	29.5
Current assets	Rs m	33,755	43,777	29.7
Fixed Assets	Rs m	24,871	32,160	29.3
Total Assets	Rs m	58,626	75,937	29.5

DCM SHRIRAM Cash Flow Statement Analysis

• DCM SHRIRAM's cash flow from operating activities (CFO) during FY19 stood at Rs 8 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -8 billion, an improvement of 150.2% on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs 3 billion, an improvement of 148% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 2 billion from the Rs -654 million net cash flows seen during FY18.

DCM SHRIRAM Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	8,271	7,749	-6.3%
Cash Flow from Investing Activities	Rs m	-3,211	-8,034	-
Cash Flow from Financing Activities	Rs m	-5,714	2,769	-
Net Cash Flow	Rs m	-654	2,483	-

Current Valuations for DCM SHRIRAM

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 57.9, an improvement from the EPS of Rs 41.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 416.0, stands at 7.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.8 times, while the price to sales ratio stands at 0.8 times.
• The company's price to cash flow (P/CF) ratio stood at 5.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	418.3	498.3
TTM Earnings per share	Rs	41.2	57.9
Diluted earnings per share	Rs	42.9	57.9
Price to Cash Flow	x	8.2	5.3
TTM P/E ratio	x	10.2	7.2
Price / Book Value ratio	x	2.5	1.6
Market Cap	Rs m	75,057	56,338
Dividends per share (Unadj.)	Rs	8.2	9.8

Ratio Analysis for DCM SHRIRAM

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.5x during FY19, from 1.6x during FY18. 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 10.9x during FY19, from 11.4x during FY18. 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 25.6% during FY19, from 22.0% during FY19. 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 29.1% during FY19, from 26.6% during FY18. 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 13.5% during FY19, from 12.8% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	1.6	1.5
Debtors’ Days	Days	5	5
Interest coverage	x	11.4	10.9
Debt to equity ratio	x	0.2	0.3
Return on assets	%	12.8	13.5
Return on equity	%	22.0	25.6
Return on capital employed	%	26.6	29.1

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 down from Rs 423.8 to Rs 416.0, registering a loss of Rs 7.9 or around 1.9%.

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