EASTERN SILK IND 2017-18 Annual Report Analysis

Sat, 31 Mar

EASTERN SILK IND 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.

EASTERN SILK IND Income Statement Analysis

• Operating income during the year fell 18.8% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 45.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 59.1% in FY18 as against 87.9% in FY17.
• Depreciation charges decreased by 17.8% and finance costs decreased by 13.9% YoY, respectively.
• Other income grew by 30.7% YoY.
• Net profit for the year declined by 52.3% YoY.
• Net profit margins during the year declined from 69.5% in FY17 to 40.8% in FY18.

EASTERN SILK IND Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	634	515	-18.8%
Other income	Rs m	4	5	30.7%
Total Revenues	Rs m	638	520	-18.5%
Gross profit	Rs m	557	304	-45.4%
Depreciation	Rs m	107	88	-17.8%
Interest	Rs m	14	12	-13.9%
Profit before tax	Rs m	441	210	-52.3%
Tax	Rs m	1	0	-100.0%
Profit after tax	Rs m	441	210	-52.3%
Gross profit margin	%	87.9	59.1
Effective tax rate	%	0.2	0.0
Net profit margin	%	69.5	40.8

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EASTERN SILK IND Balance Sheet Analysis

• The company's current liabilities during FY18 down at Rs 2 billion as compared to Rs 3 billion in FY17, thereby witnessing an decrease of -21.0%.
• Long-term debt down at Rs 140 million as compared to Rs 140 million during FY17, a fall of 0.0%.
• Current assets fell 21% and stood at Rs 1 billion, while fixed assets fell 11% and stood at Rs 619 million in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 2 billion as against Rs 2 billion during FY17, thereby witnessing a fall of 17%.

EASTERN SILK IND Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	-354	-141	-60.0
Current Liabilities	Rs m	2,673	2,112	-21.0
Long-term Debt	Rs m	140	140	0.0
Total Liabilities	Rs m	2,006	1,657	-17.4
Current assets	Rs m	1,309	1,038	-20.7
Fixed Assets	Rs m	697	619	-11.3
Total Assets	Rs m	2,006	1,657	-17.4

EASTERN SILK IND Cash Flow Statement Analysis

• EASTERN SILK IND's cash flow from operating activities (CFO) during FY18 stood at Rs 695 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -2 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -722 million, an improvement of 54% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -28 million from the Rs -116 million net cash flows seen during FY17.

EASTERN SILK IND 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	1,451	695	-52.1%
Cash Flow from Investing Activities	Rs m	-12	-2	-
Cash Flow from Financing Activities	Rs m	-1,556	-722	-
Net Cash Flow	Rs m	-116	-28	-

Current Valuations for EASTERN SILK IND

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 2.7, an decline from the EPS of Rs 5.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 4.0, stands at -2.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at -2.3 times, while the price to sales ratio stands at 0.6 times.
• The company's price to cash flow (P/CF) ratio stood at 1.5 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	8.0	6.5
TTM Earnings per share	Rs	5.6	2.7
Diluted earnings per share	Rs	5.6	2.7
Price to Cash Flow	x	0.3	1.5
TTM P/E ratio	x	-1.4	-2.5
Price / Book Value ratio	x	-0.7	-3.1
Market Cap	Rs m	230	442
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for EASTERN SILK IND

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.5x during FY18, from 0.5x 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 19.0x during FY18, from 33.5x 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 -148.8% during FY18, from -124.6% 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 -16,570.3% during FY18, from -213.0% 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 13.4% during FY18, from 22.6% 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	0.5	0.5
Debtors’ Days	Days	2,646	1,786
Interest coverage	x	33.5	19.0
Debt to equity ratio	x	-0.4	-1.0
Return on assets	%	22.6	13.4
Return on equity	%	-124.6	-148.8
Return on capital employed	%	-213.0	-16,570.3

To see how EASTERN SILK IND has performed over the last 5 years, please visit here.

EASTERN SILK IND Share Price Performance

Over the last one year, EASTERN SILK IND share price has moved up from Rs 2.3 to Rs 4.0, registering a gain of Rs 1.8 or around 78.3%.

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

(To know more, check out historical annual results for EASTERN SILK IND and quarterly results for EASTERN SILK IND)

Read: Latest Annual Report Analysis of EASTERN SILK IND