EIH 2018-19 Annual Report Analysis

Sun, 31 Mar

EIH 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.

EIH Income Statement Analysis

• Operating income during the year rose 13.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 10.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 18.2% in FY19 as against 18.7% in FY18.
• Depreciation charges increased by 13.0% and finance costs increased by 118.2% YoY, respectively.
• Other income declined by 31.8% YoY.
• Net profit for the year declined by 23.6% YoY.
• Net profit margins during the year declined from 11.2% in FY18 to 7.5% in FY19.

EIH Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	15,980	18,108	13.3%
Other income	Rs m	1,060	723	-31.8%
Total Revenues	Rs m	17,040	18,831	10.5%
Gross profit	Rs m	2,989	3,294	10.2%
Depreciation	Rs m	1,173	1,326	13.0%
Interest	Rs m	231	504	118.2%
Profit before tax	Rs m	2,645	2,186	-17.3%
Tax	Rs m	855	820	-4.2%
Profit after tax	Rs m	1,790	1,367	-23.6%
Gross profit margin	%	18.7	18.2
Effective tax rate	%	32.3	37.5
Net profit margin	%	11.2	7.5

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EIH Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 7 billion as compared to Rs 6 billion in FY18, thereby witnessing an increase of 12.9%.
• Long-term debt down at Rs 3 billion as compared to Rs 3 billion during FY18, a fall of 6.2%.
• Current assets rose 15% and stood at Rs 7 billion, while fixed assets rose 3% and stood at Rs 36 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 42 billion as against Rs 41 billion during FY18, thereby witnessing a growth of 4%.

EIH Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	28,828	29,934	3.8
Current Liabilities	Rs m	5,771	6,514	12.9
Long-term Debt	Rs m	2,933	2,751	-6.2
Total Liabilities	Rs m	40,642	42,420	4.4
Current assets	Rs m	5,827	6,679	14.6
Fixed Assets	Rs m	34,815	35,740	2.7
Total Assets	Rs m	40,642	42,420	4.4

EIH Cash Flow Statement Analysis

• EIH's cash flow from operating activities (CFO) during FY19 stood at Rs 3 billion, an improvement of 3.9% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -2 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -189 million on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 311 million from the Rs -9 million net cash flows seen during FY18.

EIH 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	2,718	2,825	3.9%
Cash Flow from Investing Activities	Rs m	-3,179	-2,324	-
Cash Flow from Financing Activities	Rs m	452	-189	-
Net Cash Flow	Rs m	-9	311	-

Current Valuations for EIH

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 2.4, an decline from the EPS of Rs 3.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 202.6, stands at 111.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.2 times, while the price to sales ratio stands at 6.4 times.
• The company's price to cash flow (P/CF) ratio stood at 37.4 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	28.0	31.7
TTM Earnings per share	Rs	3.1	2.4
Diluted earnings per share	Rs	2.9	2.2
Price to Cash Flow	x	33.6	37.4
TTM P/E ratio	x	88.6	111.8
Price / Book Value ratio	x	3.4	3.4
Market Cap	Rs m	98,196	100,711
Dividends per share (Unadj.)	Rs	0.9	0.9

Ratio Analysis for EIH

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.0x during FY19, from 1.0x 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 5.3x during FY19, from 12.4x 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 declined and down at 4.6% during FY19, from 6.2% 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 8.2% during FY19, from 9.1% 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 4.4% during FY19, from 5.0% 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	1.0	1.0
Debtors’ Days	Days	51	50
Interest coverage	x	12.4	5.3
Debt to equity ratio	x	0.1	0.1
Return on assets	%	5.0	4.4
Return on equity	%	6.2	4.6
Return on capital employed	%	9.1	8.2

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

EIH Share Price Performance

Over the last one year, EIH share price has moved up from Rs 159.1 to Rs 202.6, registering a gain of Rs 43.5 or around 27.3%.

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

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

Read: Latest Annual Report Analysis of EIH