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DEN NETWORKS 2017-18 Annual Report Analysis

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DEN NETWORKS 2017-18 Annual Report Analysis
Fri, 21 Dec

DEN NETWORKS 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.

DEN NETWORKS Income Statement Analysis

  • Operating income during the year rose 11.0% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 55.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 21.7% in FY18 as against 15.5% in FY17.
  • Depreciation charges decreased by 10.0% and finance costs increased by 1.4% YoY, respectively.
  • Other income declined by 27.7% YoY.
  • Net profit for the year declined by 90.9% YoY.
  • Net profit margins during the year grew from 15.7% in FY17 to 1.3% in FY18.

DEN NETWORKS Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 11,573 12,851 11.0%
Other income Rs m 413 299 -27.7%
Total Revenues Rs m 11,987 13,150 9.7%
Gross profit Rs m 1,788 2,783 55.6%
Depreciation Rs m 2,761 2,486 -10.0%
Interest Rs m 652 661 1.4%
Profit before tax Rs m -1,211 -65 -94.7%
Tax Rs m 330 100 -69.8%
Profit after tax Rs m -1,878 -171 -90.9%
Gross profit margin % 15.5 21.7
Effective tax rate % -27.2 -154.6
Net profit margin % -15.7 -1.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



DEN NETWORKS Balance Sheet Analysis

  • The company's current liabilities during FY18 down at Rs 8 billion as compared to Rs 9 billion in FY17, thereby witnessing an decrease of -13.7%.
  • Long-term debt stood at Rs 3 billion as compared to Rs 2 billion during FY17, a growth of 67.1%.
  • Current assets rose 8% and stood at Rs 8 billion, while fixed assets fell 14% and stood at Rs 12 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 24 billion as against Rs 24 billion during FY17, thereby witnessing a fall of 2%.

DEN NETWORKS Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 9,028 8,899 -1.4
 
Current Liabilities Rs m 9,153 7,902 -13.7
Long-term Debt Rs m 1,880 3,141 67.1
Total Liabilities Rs m 24,071 23,573 -2.1
 
Current assets Rs m 7,369 7,942 7.8
Fixed Assets Rs m 14,346 12,362 -13.8
Total Assets Rs m 24,071 23,573 -2.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



DEN NETWORKS Cash Flow Statement Analysis

  • DEN NETWORKS's cash flow from operating activities (CFO) during FY18 stood at Rs 2 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -827 million, an improvement of 2,451.5% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -410 million, an improvement of 85% on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs 641 million from the Rs -737 million net cash flows seen during FY17.

DEN NETWORKS 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 2,022 1,846 -8.7%
Cash Flow from Investing Activities Rs m -32 -827 -
Cash Flow from Financing Activities Rs m -2,774 -410 -
Net Cash Flow Rs m -737 641 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for DEN NETWORKS

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs -0.9, an improvement from the EPS of Rs -9.6 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 69.4, stands at -73.3 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.4 times, while the price to sales ratio stands at 1.6 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-17* 12 Mar-18*
Sales per share (Unadj.) Rs 59.1 65.8
TTM Earnings per share Rs -9.6 -0.9
Diluted earnings per share Rs -10.5 -1.0
Price to Cash Flow x 14.9 5.3
TTM P/E ratio x -80.5 -73.3
Price / Book Value ratio x 1.8 2.4
Market Cap Rs m 13,587 12,367
Dividends per share (Unadj.) Rs 0.0 0.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for DEN NETWORKS

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 1.0x during FY18, from 0.8x 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 0.9x during FY18, from -0.9x 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 -1.9% during FY18, from -20.8% 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 4.9% during FY18, from -8.2% 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 2.1% during FY18, from -5.1% 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 0.8 1.0
Debtors’ Days Days 74 86
Interest coverage x -0.9 0.9
Debt to equity ratio x 0.2 0.4
Return on assets % -5.1 2.1
Return on equity % -20.8 -1.9
Return on capital employed % -8.2 4.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



To see how DEN NETWORKS has performed over the last 5 years, please visit here.

DEN NETWORKS Share Price Performance

Over the last one year, DEN NETWORKS share price has moved up from Rs 110.4 to Rs 69.4, registering a loss of Rs 41.0 or around 37.1%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 7,086.8 (down 0.8%). Over the last one year it has moved up from 6,242.1 to 7,086.8, a gain of 845 points (up 13.5%).

Overall, the S&P BSE SENSEX is up 7.8% over the year.

(To know more, check out historical annual results for DEN NETWORKS and quarterly results for DEN NETWORKS)

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Related Views on News

DEN NETWORKS Announces Quarterly Results (3QFY19); Net Profit Down 1792.5% (Quarterly Result Update)

Jan 16, 2019 | Updated on Jan 16, 2019

For the quarter ended December 2018, DEN NETWORKS has posted a net profit of Rs 293 m (down 1792.5% YoY). Sales on the other hand came in at Rs 3 bn (down 6.0% YoY). Read on for a complete analysis of DEN NETWORKS's quarterly results.

DEN NETWORKS Announces Quarterly Results (2QFY19); Net Profit Up 1280.2% (Quarterly Result Update)

Nov 27, 2018 | Updated on Nov 27, 2018

For the quarter ended September 2018, DEN NETWORKS has posted a net profit of Rs 153 m (up 1280.2% YoY). Sales on the other hand came in at Rs 3 bn (down 5.3% YoY). Read on for a complete analysis of DEN NETWORKS's quarterly results.

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