DEEPAK FERTILISERS 2018-19 Annual Report Analysis

Sun, 31 Mar

DEEPAK FERTILISERS 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.

DEEPAK FERTILISERS Income Statement Analysis

• Operating income during the year rose 13.7% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 15.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 6.8% in FY19 as against 9.2% in FY18.
• Depreciation charges increased by 5.0% and finance costs increased by 32.4% YoY, respectively.
• Other income grew by 125.4% YoY.
• Net profit for the year declined by 54.0% YoY.
• Net profit margins during the year declined from 2.8% in FY18 to 1.1% in FY19.

DEEPAK FERTILISERS Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	59,282	67,421	13.7%
Other income	Rs m	241	543	125.4%
Total Revenues	Rs m	59,523	67,964	14.2%
Gross profit	Rs m	5,452	4,593	-15.7%
Depreciation	Rs m	1,632	1,715	5.0%
Interest	Rs m	1,732	2,293	32.4%
Profit before tax	Rs m	2,329	1,128	-51.5%
Tax	Rs m	664	363	-45.3%
Profit after tax	Rs m	1,665	765	-54.0%
Gross profit margin	%	9.2	6.8
Effective tax rate	%	28.5	32.2
Net profit margin	%	2.8	1.1

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DEEPAK FERTILISERS Balance Sheet Analysis

• The company's current liabilities during FY19 down at Rs 32 billion as compared to Rs 42 billion in FY18, thereby witnessing an decrease of -25.3%.
• Long-term debt stood at Rs 18 billion as compared to Rs 6 billion during FY18, a growth of 183.1%.
• Current assets fell 17% and stood at Rs 29 billion, while fixed assets rose 22% and stood at Rs 41 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 70 billion as against Rs 69 billion during FY18, thereby witnessing a growth of 2%.

DEEPAK FERTILISERS Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	20,462	20,479	0.1
Current Liabilities	Rs m	42,311	31,588	-25.3
Long-term Debt	Rs m	6,255	17,709	183.1
Total Liabilities	Rs m	68,971	70,441	2.1
Current assets	Rs m	35,276	29,350	-16.8
Fixed Assets	Rs m	33,696	41,091	21.9
Total Assets	Rs m	68,971	70,441	2.1

DEEPAK FERTILISERS Cash Flow Statement Analysis

• DEEPAK FERTILISERS's cash flow from operating activities (CFO) during FY19 stood at Rs 13 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -6 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -7 billion on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -31 million from the Rs -10 million net cash flows seen during FY18.

DEEPAK FERTILISERS 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	-1,315	13,100	-
Cash Flow from Investing Activities	Rs m	-11,387	-5,757	-
Cash Flow from Financing Activities	Rs m	12,692	-7,374	-
Net Cash Flow	Rs m	-10	-31	-

Current Valuations for DEEPAK FERTILISERS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 8.7, an decline from the EPS of Rs 18.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 132.9, stands at 21.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.8 times, while the price to sales ratio stands at 0.2 times.
• The company's price to cash flow (P/CF) ratio stood at 8.9 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	672.1	764.4
TTM Earnings per share	Rs	18.9	8.7
Diluted earnings per share	Rs	13.8	6.3
Price to Cash Flow	x	10.5	8.9
TTM P/E ratio	x	19.3	21.0
Price / Book Value ratio	x	1.6	1.1
Market Cap	Rs m	32,318	22,128
Dividends per share (Unadj.)	Rs	6.0	3.0

Ratio Analysis for DEEPAK FERTILISERS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.9x during FY19, from 0.8x 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 1.5x during FY19, from 2.3x 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 declined and down at 3.7% during FY19, from 8.1% 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 declined and down at 9.0% during FY19, from 15.2% 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 declined and down at 4.3% during FY19, from 4.9% 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	0.8	0.9
Debtors’ Days	Days	1,210	756
Interest coverage	x	2.3	1.5
Debt to equity ratio	x	0.3	0.9
Return on assets	%	4.9	4.3
Return on equity	%	8.1	3.7
Return on capital employed	%	15.2	9.0

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

DEEPAK FERTILISERS Share Price Performance

Over the last one year, DEEPAK FERTILISERS share price has moved down from Rs 287.1 to Rs 132.9, registering a loss of Rs 154.2 or around 53.7%.

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

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

Read: Latest Annual Report Analysis of DEEPAK FERTILISERS