EMCO LTD 2017-18 Annual Report Analysis

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EMCO LTD 2017-18 Annual Report Analysis
Thu, 20 Dec

EMCO LTD 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 LTD Income Statement Analysis

  • Operating income during the year fell 53.4% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 215.4% YoY during the fiscal. Operating profit margins witnessed a growth and stood at 22.0% in FY18 as against 8.9% in FY17.
  • Depreciation charges decreased by 7.7% and finance costs increased by 11.1% YoY, respectively.
  • Other income grew by 246.6% YoY.
  • Net profit for the year grew by 70.3% YoY.
  • Net profit margins during the year declined from 7.7% in FY17 to 26.5% in FY18.

EMCO LTD Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 8,414 3,918 -53.4%
Other income Rs m 88 305 246.6%
Total Revenues Rs m 8,502 4,223 -50.3%
Gross profit Rs m 746 -861 -215.4%
Depreciation Rs m 181 167 -7.7%
Interest Rs m 1,330 1,477 11.1%
Profit before tax Rs m -677 -2,200 224.8%
Tax Rs m -289 -727 151.8%
Profit after tax Rs m -656 -1,118 70.3%
Gross profit margin % 8.9 -22.0
Effective tax rate % 42.6 33.0
Net profit margin % -7.7 -26.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



EMCO LTD 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 15 billion as against Rs 16 billion during FY17, thereby witnessing a fall of 4%.

EMCO LTD Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 2,704 1,271 -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 15,820 15,232 -3.7
 
Current assets Rs m 11,951 10,856 -9.2
Fixed Assets Rs m 3,262 3,053 -6.4
Total Assets Rs m 15,820 15,232 -3.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



EMCO LTD Cash Flow Statement Analysis

  • EMCO LTD's cash flow from operating activities (CFO) during FY18 stood at Rs 803 million, an improvement of 707.0% 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 -117 million from the Rs 211 million net cash flows seen during FY17.

EMCO LTD 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 100 803 707.0%
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 211 -117 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for EMCO LTD

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs -16.5, an decline from the EPS of Rs -9.7 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 7.4, stands at -0.3 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.1 times, while the price to sales ratio stands at 0.4 times.
  • The company's price to cash flow (P/CF) ratio stood at -0.4 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 124.5 57.7
TTM Earnings per share Rs -9.7 -16.5
Diluted earnings per share Rs -10.1 -17.2
Price to Cash Flow x -0.8 -0.4
TTM P/E ratio x -0.3 -0.3
Price / Book Value ratio x 0.8 1.1
Market Cap Rs m 501 483
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 EMCO LTD

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved 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 -0.5x during FY18, from 0.5x 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 -87.9% during FY18, from -24.3% 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 -24.6% during FY18, from 10.3% 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 2.4% during FY18, from 4.3% 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 276 534
Interest coverage x 0.5 -0.5
Debt to equity ratio x 0.4 0.2
Return on assets % 4.3 2.4
Return on equity % -24.3 -87.9
Return on capital employed % 10.3 -24.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

EMCO LTD Share Price Performance

Over the last one year, EMCO LTD share price has moved up from Rs 19.6 to Rs 0.0, registering a loss of Rs 19.6 or around 100.0%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 18,794.4 (down 0.0%). Over the last one year it has moved up from 18,684.3 to 18,794.4, a gain of 110 points (up 0.6%).

Overall, the NIFTY 50 is down 0.4% over the year.

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

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