FOSECO INDIA 2016-17 Annual Report Analysis

Sun, 31 Dec

FOSECO INDIA has announced its results for the year ended December 2017. Let us have a look at the detailed performance review of the company during FY16-17.

FOSECO INDIA Income Statement Analysis

• Operating income during the year rose 12.7% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 6.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 15.3% in CY17 as against 18.4% in CY16.
• Depreciation charges increased by 5.7% and finance costs decreased by 43.9% YoY, respectively.
• Other income grew by 20.8% YoY.
• Net profit for the year declined by 4.6% YoY.
• Net profit margins during the year declined from 11.1% in CY16 to 9.4% in CY17.

FOSECO INDIA Income Statement 2016-17

No. of Mths Year Ending		12 Dec-16*	12 Dec-17*	% Change
Net Sales	Rs m	2,985	3,365	12.7%
Other income	Rs m	21	25	20.8%
Total Revenues	Rs m	3,006	3,390	12.8%
Gross profit	Rs m	549	513	-6.5%
Depreciation	Rs m	51	53	5.7%
Interest	Rs m	6	4	-43.9%
Profit before tax	Rs m	513	482	-6.1%
Tax	Rs m	182	166	-9.0%
Profit after tax	Rs m	331	316	-4.6%
Gross profit margin	%	18.4	15.3
Effective tax rate	%	35.5	34.5
Net profit margin	%	11.1	9.4

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FOSECO INDIA Balance Sheet Analysis

• The company's current liabilities during CY17 stood at Rs 740 million as compared to Rs 571 million in CY16, thereby witnessing an increase of 29.6%.
• Current assets rose 29% and stood at Rs 2 billion, while fixed assets fell 17% and stood at Rs 278 million in CY17.
• Overall, the total assets and liabilities for CY17 stood at Rs 2 billion as against Rs 2 billion during CY16, thereby witnessing a growth of 21%.

FOSECO INDIA Balance Sheet as on December 2017

No. of Mths Year Ending		12 Dec-16*	12 Dec-17*	% Change
Networth	Rs m	1,243	1,457	17.2
Current Liabilities	Rs m	571	740	29.6
Long-term Debt	Rs m	6	0	-100.0
Total Liabilities	Rs m	1,812	2,187	20.7
Current assets	Rs m	1,477	1,909	29.2
Fixed Assets	Rs m	334	278	-16.8
Total Assets	Rs m	1,812	2,187	20.7

FOSECO INDIA Cash Flow Statement Analysis

• FOSECO INDIA's cash flow from operating activities (CFO) during CY17 stood at Rs 657 million, an improvement of 105.3% on a YoY basis.
• Cash flow from investing activities (CFI) during CY17 stood at Rs 18 million on a YoY basis.
• Cash flow from financial activities (CFF) during CY17 stood at Rs -169 million, an improvement of 15% on a YoY basis.
• Overall, net cash flows for the company during CY17 stood at Rs 506 million from the Rs 57 million net cash flows seen during CY16.

FOSECO INDIA Cash Flow Statement 2016-17

Particulars	No. of months	12	12	% Change
	Year Ending	Dec-16	Dec-17
Cash Flow from Operating Activities	Rs m	320	657	105.3%
Cash Flow from Investing Activities	Rs m	-64	18	-
Cash Flow from Financing Activities	Rs m	-198	-169	-
Net Cash Flow	Rs m	57	506	780.1%

Current Valuations for FOSECO INDIA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 49.4, an decline from the EPS of Rs 51.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,984.1, stands at 40.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 8.7 times, while the price to sales ratio stands at 3.8 times.
• The company's price to cash flow (P/CF) ratio stood at 31.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Dec-16*	12 Dec-17*
Sales per share (Unadj.)	Rs	467.1	526.6
TTM Earnings per share	Rs	51.8	49.4
Diluted earnings per share	Rs	51.8	49.4
Price to Cash Flow	x	21.3	31.1
TTM P/E ratio	x	24.5	40.5
Price / Book Value ratio	x	6.8	7.9
Market Cap	Rs m	8,443	11,483
Dividends per share (Unadj.)	Rs	23.0	25.0

Ratio Analysis for FOSECO INDIA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.6x during CY17, from 2.6x during CY16. 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 improved and stood at 137.5x during CY17, from 82.6x during CY16. 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 21.7% during CY17, from 26.6% during CY17. 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 33.3% during CY17, from 41.6% during CY16. 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 14.6% during CY17, from 18.6% during CY16. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Dec-16*	12 Dec-17*
Current ratio	x	2.6	2.6
Debtors’ Days	Days	1,218	1,091
Interest coverage	x	82.6	137.5
Debt to equity ratio	x	0.0	0.0
Return on assets	%	18.6	14.6
Return on equity	%	26.6	21.7
Return on capital employed	%	41.6	33.3

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

FOSECO INDIA Share Price Performance

Over the last one year, FOSECO INDIA share price has moved up from Rs 1,189.0 to Rs 1,354.0, registering a gain of Rs 165.0 or around 13.9%.

Overall, the S&P BSE SENSEX is up 16.9% over the year.

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

Read: Latest Annual Report Analysis of FOSECO INDIA