GATI 2017-18 Annual Report Analysis

Sat, 31 Mar

GATI 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.

GATI Income Statement Analysis

• Operating income during the year rose 2.7% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 80.9% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 1.1% in FY18 as against 5.8% in FY17.
• Depreciation charges increased by 0.7% and finance costs decreased by 5.6% YoY, respectively.
• Other income grew by 1004.2% YoY.
• Net profit for the year grew by 128.0% YoY.
• Net profit margins during the year grew from 1.0% in FY17 to 2.3% in FY18.

GATI Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	16,910	17,365	2.7%
Other income	Rs m	104	1,147	1,004.2%
Total Revenues	Rs m	17,014	18,511	8.8%
Gross profit	Rs m	978	187	-80.9%
Depreciation	Rs m	298	300	0.7%
Interest	Rs m	518	489	-5.6%
Profit before tax	Rs m	265	544	104.9%
Tax	Rs m	94	153	62.8%
Profit after tax	Rs m	172	391	128.0%
Gross profit margin	%	5.8	1.1
Effective tax rate	%	35.4	28.1
Net profit margin	%	1.0	2.3

GATI Balance Sheet Analysis

• The company's current liabilities during FY18 down at Rs 4 billion as compared to Rs 5 billion in FY17, thereby witnessing an decrease of -24.6%.
• Long-term debt stood at Rs 2 billion as compared to Rs 2 billion during FY17, a growth of 19.1%.
• Current assets rose 4% and stood at Rs 4 billion, while fixed assets rose 0% and stood at Rs 12 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 15 billion as against Rs 15 billion during FY17, thereby witnessing a growth of 1%.

GATI Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	6,354	7,262	14.3
Current Liabilities	Rs m	5,109	3,851	-24.6
Long-term Debt	Rs m	1,814	2,160	19.1
Total Liabilities	Rs m	15,286	15,455	1.1
Current assets	Rs m	3,568	3,704	3.8
Fixed Assets	Rs m	11,703	11,744	0.3
Total Assets	Rs m	15,286	15,455	1.1

GATI Cash Flow Statement Analysis

• GATI's cash flow from operating activities (CFO) during FY18 stood at Rs 1 billion, an improvement of 86.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -153 million 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 -140 million from the Rs 180 million net cash flows seen during FY17.

GATI 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	669	1,245	86.2%
Cash Flow from Investing Activities	Rs m	-163	-153	-
Cash Flow from Financing Activities	Rs m	-326	-1,232	-
Net Cash Flow	Rs m	180	-140	-

Current Valuations for GATI

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 3.6, an improvement from the EPS of Rs 1.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 89.2, stands at 28.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.5 times, while the price to sales ratio stands at 0.6 times.
• The company's price to cash flow (P/CF) ratio stood at 19.0 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	191.8	160.3
TTM Earnings per share	Rs	1.9	3.6
Diluted earnings per share	Rs	1.4	3.2
Price to Cash Flow	x	36.8	19.0
TTM P/E ratio	x	58.5	28.0
Price / Book Value ratio	x	2.1	1.8
Market Cap	Rs m	13,075	13,113
Dividends per share (Unadj.)	Rs	0.8	0.9

Ratio Analysis for GATI

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.0x during FY18, from 0.7x 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 improved and stood at 2.1x during FY18, from 1.5x 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 improved and stood at 5.4% during FY18, from 2.7% 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 improved and stood at 11.0% during FY18, from 9.6% 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 improved and stood at 5.7% during FY18, from 4.5% 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	0.7	1.0
Debtors’ Days	Days	46	51
Interest coverage	x	1.5	2.1
Debt to equity ratio	x	0.3	0.3
Return on assets	%	4.5	5.7
Return on equity	%	2.7	5.4
Return on capital employed	%	9.6	11.0

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

GATI Share Price Performance

Over the last one year, GATI share price has moved down from Rs 140.5 to Rs 89.2, registering a loss of Rs 51.3 or around 36.5%.

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

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

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