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EMCO 2017-18 Annual Report Analysis
Sat, 31 Mar

EMCO 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.

EMCO Income Statement Analysis

  • Operating income during the year fell 52.4% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 266.9% YoY during the fiscal. Operating profit margins witnessed a growth and stood at 19.9% in FY18 as against 5.7% in FY17.
  • Depreciation charges decreased by 7.4% and finance costs increased by 10.5% YoY, respectively.
  • Other income grew by 165.2% YoY.
  • Net profit for the year grew by 88.7% YoY.
  • Net profit margins during the year declined from 9.6% in FY17 to 38.0% in FY18.

EMCO Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 8,153 3,877 -52.4%
Other income Rs m 150 397 165.2%
Total Revenues Rs m 8,303 4,275 -48.5%
Gross profit Rs m 462 -772 -266.9%
Depreciation Rs m 181 167 -7.4%
Interest Rs m 1,500 1,658 10.5%
Profit before tax Rs m -1,069 -2,200 105.7%
Tax Rs m -289 -727 151.7%
Profit after tax Rs m -780 -1,473 88.7%
Gross profit margin % 5.7 -19.9
Effective tax rate % 27.0 33.0
Net profit margin % -9.6 -38.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Read Now: We're Bullish on 2 Non-Nifty Stocks

EMCO Balance Sheet Analysis

  • The company's current liabilities during FY18 stood at Rs 14 billion as compared to Rs 12 billion in FY17, thereby witnessing an increase of 13.6%.
  • Long-term debt down at Rs 227 million as compared to Rs 1 billion during FY17, a fall of 77.8%.
  • Current assets fell 9% and stood at Rs 11 billion, while fixed assets fell 6% and stood at Rs 3 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 14 billion as against Rs 15 billion during FY17, thereby witnessing a fall of 8%.

EMCO Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 2,695 1,266 -53.0
 
Current Liabilities Rs m 12,086 13,727 13.6
Long-term Debt Rs m 1,021 227 -77.8
Total Liabilities Rs m 15,486 14,175 -8.5
 
Current assets Rs m 11,951 10,856 -9.2
Fixed Assets Rs m 3,535 3,318 -6.1
Total Assets Rs m 15,486 14,175 -8.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



EMCO Cash Flow Statement Analysis

  • EMCO's cash flow from operating activities (CFO) during FY18 stood at Rs 803 million, an improvement of 707.1% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs 466 million, an improvement of 90.1% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -1 billion on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs -156 million from the Rs 85 million net cash flows seen during FY17.

EMCO 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 100 803 707.1%
Cash Flow from Investing Activities Rs m 245 466 90.1%
Cash Flow from Financing Activities Rs m -133 -1,385 -
Net Cash Flow Rs m 85 -156 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for EMCO

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs -21.7, an decline from the EPS of Rs -11.5 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 10.3, stands at -0.5 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 0.6 times, while the price to sales ratio stands at 0.2 times.
  • The company's price to cash flow (P/CF) ratio stood at -1.1 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 120.3 57.1
TTM Earnings per share Rs -11.5 -21.7
Diluted earnings per share Rs -11.5 -21.7
Price to Cash Flow x -3.2 -1.1
TTM P/E ratio x -2.7 -0.5
Price / Book Value ratio x 0.8 1.2
Market Cap Rs m 2,067 1,460
Dividends per share (Unadj.) Rs 0.0 0.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for EMCO

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 0.8x during FY18, from 1.0x 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 -0.3x during FY18, from 0.3x 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 -116.4% during FY18, from -29.0% 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 -36.3% during FY18, from 11.6% 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 1.3% during FY18, from 4.6% 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 1.0 0.8
Debtors’ Days Days 2,852 5,392
Interest coverage x 0.3 -0.3
Debt to equity ratio x 0.4 0.2
Return on assets % 4.6 1.3
Return on equity % -29.0 -116.4
Return on capital employed % 11.6 -36.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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

EMCO Share Price Performance

Over the last one year, EMCO share price has moved down from Rs 27.9 to Rs 10.3, registering a loss of Rs 17.6 or around 63.1%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 18,476.7 (down 0.1%). Over the last one year it has moved up from 0.0 to 18,476.7, a gain of 18,477 points (up 0.0%).

Overall, the S&P BSE SENSEX is up 12.1% over the year.

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

Annual Report FAQs

What is the current share price of EMCO?

EMCO currently trades at Rs 1.7 per share. You can check out the latest share price performance of EMCO here...

What was the revenue of EMCO in FY18? How does it compare to earlier years?

The revenues of EMCO stood at Rs 4,275 m in FY18, which was down -48.5% compared to Rs 8,303 m reported in FY17.

EMCO's revenue has fallen from Rs 8,943 m in FY14 to Rs 4,275 m in FY18.

Over the past 5 years, the revenue of EMCO has grown at a CAGR of -16.9%.

What was the net profit of EMCO in FY18? How does it compare to earlier years?

The net loss of EMCO stood at Rs -1,473 m in FY18, which was up 88.7% compared to Rs -780 m reported in FY17.

This compares to a net loss of Rs -408 m in FY16 and a net loss of Rs -116 m in FY15.

Over the past 5 years, EMCO net profit has grown at a CAGR of 142.5%.

What does the cash flow statement of EMCO reveal?

The cash flow statement is the financial statement that presents the cash inflows and outflows of a company during a given period of time.

This statement is one of the most useful tools for judging a company's liquidity position. The ratios and parameters in this statement helps test a company's financial health.

The cash flow statement of EMCO reveals:

  • Cash flow from operations increased in FY18 and stood at Rs 803 m as compared to Rs 100 m in FY17.
  • Cash flow from investments increased in FY18 and stood at Rs 466 m as compared to Rs 245 m in FY17.
  • Cash flow from financial activity decreased in FY18 and stood at Rs -1,385 m as compared to Rs -133 m in FY17.

Here's the cash flow statement of EMCO for the past 5 years.

(Rs m)FY14FY15FY16FY17FY18
From Operations35761651100803
From Investments-117-140-293245466
From Financial Activity-204256-574-133-1,385
Net Cashflow37178-21685-156

What does the Key Ratio analysis of EMCO reveal?

Be it the company's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.

The ratio/financial analysis of EMCO reveals:

  • Operating profit margins witnessed a growth and stood at 19.9% in FY18 as against 5.7% in FY17.
  • Net profit margins declined from 9.6% in FY17 to 38.0% in FY18.
  • Debt to Equity ratio for FY18 stood at 0.2 as compared to 0.4 in FY17.

Here's the ratio/financial analysis of EMCO for the past 5 years.

 FY14FY15FY16FY17FY18
Operating Profit Margin (%)9.09.79.25.7-19.9
Net Profit Margin (%)-0.5-1.2-5.3-9.6-38.0
Debt to Equity Ratio (x)0.20.40.50.40.2

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