EPL 2018-19 Annual Report Analysis

Sun, 31 Mar

EPL 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.

EPL Income Statement Analysis

• Operating income during the year rose 12.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 9.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 18.6% in FY19 as against 19.2% in FY18.
• Depreciation charges increased by 11.4% and finance costs increased by 11.4% YoY, respectively.
• Other income grew by 8.1% YoY.
• Net profit for the year grew by 8.5% YoY.
• Net profit margins during the year declined from 7.3% in FY18 to 7.0% in FY19.

EPL Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	24,013	27,069	12.7%
Other income	Rs m	264	285	8.1%
Total Revenues	Rs m	24,277	27,354	12.7%
Gross profit	Rs m	4,599	5,022	9.2%
Depreciation	Rs m	1,671	1,861	11.4%
Interest	Rs m	550	613	11.4%
Profit before tax	Rs m	2,642	2,833	7.2%
Tax	Rs m	889	932	4.8%
Profit after tax	Rs m	1,753	1,901	8.5%
Gross profit margin	%	19.2	18.6
Effective tax rate	%	33.7	32.9
Net profit margin	%	7.3	7.0

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EPL Balance Sheet Analysis

• The company's current liabilities during FY19 down at Rs 6 billion as compared to Rs 7 billion in FY18, thereby witnessing an decrease of -13.8%.
• Long-term debt stood at Rs 5 billion as compared to Rs 4 billion during FY18, a growth of 4.5%.
• Current assets fell 4% and stood at Rs 11 billion, while fixed assets rose 9% and stood at Rs 14 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 25 billion as against Rs 24 billion during FY18, thereby witnessing a growth of 3%.

EPL Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	12,473	13,872	11.2
Current Liabilities	Rs m	6,657	5,740	-13.8
Long-term Debt	Rs m	4,492	4,693	4.5
Total Liabilities	Rs m	24,367	25,127	3.1
Current assets	Rs m	11,339	10,910	-3.8
Fixed Assets	Rs m	13,027	14,218	9.1
Total Assets	Rs m	24,367	25,127	3.1

EPL Cash Flow Statement Analysis

• EPL's cash flow from operating activities (CFO) during FY19 stood at Rs 4 billion, an improvement of 3.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -2 billion, an improvement of 20.6% on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -2 billion on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -254 million from the Rs 337 million net cash flows seen during FY18.

EPL 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	3,435	3,564	3.8%
Cash Flow from Investing Activities	Rs m	-1,558	-1,879	-
Cash Flow from Financing Activities	Rs m	-1,539	-1,939	-
Net Cash Flow	Rs m	337	-254	-

Current Valuations for EPL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 6.0, an decline from the EPS of Rs 11.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 116.8, stands at 18.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.7 times, while the price to sales ratio stands at 1.4 times.
• The company's price to cash flow (P/CF) ratio stood at 15.7 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	152.7	85.9
TTM Earnings per share	Rs	11.1	6.0
Diluted earnings per share	Rs	5.5	6.0
Price to Cash Flow	x	22.2	15.7
TTM P/E ratio	x	42.8	18.9
Price / Book Value ratio	x	3.5	4.3
Market Cap	Rs m	43,091	58,958
Dividends per share (Unadj.)	Rs	2.4	1.3

Ratio Analysis for EPL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.9x during FY19, from 1.7x 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 5.6x during FY19, from 5.8x 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 13.7% during FY19, from 14.1% 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 18.6% during FY19, from 18.8% 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 improved and stood at 10.0% during FY19, from 9.5% 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	1.7	1.9
Debtors’ Days	Days	698	665
Interest coverage	x	5.8	5.6
Debt to equity ratio	x	0.4	0.3
Return on assets	%	9.5	10.0
Return on equity	%	14.1	13.7
Return on capital employed	%	18.8	18.6

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

EPL Share Price Performance

Over the last one year, EPL share price has moved down from Rs 240.5 to Rs 116.8, registering a loss of Rs 123.7 or around 51.4%.

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

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

Read: Latest Annual Report Analysis of EPL