DEEP INDUSTRIES 2017-18 Annual Report Analysis

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DEEP INDUSTRIES 2017-18 Annual Report Analysis
Wed, 19 Dec

DEEP INDUSTRIES 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.

DEEP INDUSTRIES Income Statement Analysis

  • Operating income during the year rose 12.7% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 4.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 51.8% in FY18 as against 56.2% in FY17.
  • Depreciation charges increased by 15.7% and finance costs decreased by 48.0% YoY, respectively.
  • Other income declined by 24.9% YoY.
  • Net profit for the year grew by 3.0% YoY.
  • Net profit margins during the year declined from 26.2% in FY17 to 24.2% in FY18.

DEEP INDUSTRIES Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 2,774 3,127 12.7%
Other income Rs m 93 70 -24.9%
Total Revenues Rs m 2,867 3,197 11.5%
Gross profit Rs m 1,558 1,621 4.0%
Depreciation Rs m 335 388 15.7%
Interest Rs m 223 116 -48.0%
Profit before tax Rs m 1,093 1,187 8.6%
Tax Rs m 341 412 21.0%
Profit after tax Rs m 752 775 3.0%
Gross profit margin % 56.2 51.8
Effective tax rate % 31.2 34.7
Net profit margin % 26.2 24.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



DEEP INDUSTRIES Balance Sheet Analysis

  • The company's current liabilities during FY18 stood at Rs 2 billion as compared to Rs 1 billion in FY17, thereby witnessing an increase of 26.7%.
  • Long-term debt down at Rs 2 billion as compared to Rs 2 billion during FY17, a fall of 12.6%.
  • Current assets rose 82% and stood at Rs 3 billion, while fixed assets fell 6% and stood at Rs 6 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 8 billion as against Rs 8 billion during FY17, thereby witnessing a growth of 12%.

DEEP INDUSTRIES Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 3,863 4,569 18.3
 
Current Liabilities Rs m 1,259 1,595 26.7
Long-term Debt Rs m 1,792 1,565 -12.6
Total Liabilities Rs m 7,505 8,422 12.2
 
Current assets Rs m 1,558 2,837 82.1
Fixed Assets Rs m 5,917 5,566 -5.9
Total Assets Rs m 7,505 8,422 12.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



DEEP INDUSTRIES Cash Flow Statement Analysis

  • DEEP INDUSTRIES's cash flow from operating activities (CFO) during FY18 stood at Rs 1 billion, an improvement of 30.2% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -737 million on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -466 million on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs 225 million from the Rs 120 million net cash flows seen during FY17.

DEEP INDUSTRIES 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 1,097 1,428 30.2%
Cash Flow from Investing Activities Rs m -1,439 -737 -
Cash Flow from Financing Activities Rs m 462 -466 -
Net Cash Flow Rs m 120 225 87.3%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for DEEP INDUSTRIES

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 24.2, an improvement from the EPS of Rs 23.5 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 132.5, stands at 6.2 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.7 times, while the price to sales ratio stands at 2.5 times.
  • The company's price to cash flow (P/CF) ratio stood at 3.6 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 86.7 97.7
TTM Earnings per share Rs 23.5 24.2
Diluted earnings per share Rs 23.5 24.2
Price to Cash Flow x 3.9 3.6
TTM P/E ratio x 6.2 6.2
Price / Book Value ratio x 2.0 1.7
Market Cap Rs m 4,240 4,240
Dividends per share (Unadj.) Rs 1.8 1.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for DEEP INDUSTRIES

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 1.8x during FY18, from 1.2x 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 11.2x during FY18, from 5.9x 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 17.0% during FY18, from 19.5% 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 21.2% during FY18, from 23.3% 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 10.6% during FY18, from 13.0% 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 1.2 1.8
Debtors’ Days Days 87 99
Interest coverage x 5.9 11.2
Debt to equity ratio x 0.5 0.3
Return on assets % 13.0 10.6
Return on equity % 19.5 17.0
Return on capital employed % 23.3 21.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

DEEP INDUSTRIES Share Price Performance

Over the last one year, DEEP INDUSTRIES share price has moved up from Rs 209.5 to Rs 132.5, registering a loss of Rs 77.0 or around 36.8%.

Overall, the S&P BSE SENSEX is up 8.6% over the year.

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

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