GFL 2017-18 Annual Report Analysis

Sat, 31 Mar

GFL 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.

GFL Income Statement Analysis

• Operating income during the year fell 38.9% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 23.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 19.2% in FY18 as against 15.4% in FY17.
• Depreciation charges decreased by 14.2% and finance costs increased by 0.1% YoY, respectively.
• Other income grew by 11.3% YoY.
• Net profit for the year grew by 11.0% YoY.
• Net profit margins during the year grew from 3.5% in FY17 to 6.4% in FY18.

GFL Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	61,839	37,801	-38.9%
Other income	Rs m	1,193	1,328	11.3%
Total Revenues	Rs m	63,031	39,129	-37.9%
Gross profit	Rs m	9,516	7,251	-23.8%
Depreciation	Rs m	3,487	2,992	-14.2%
Interest	Rs m	2,790	2,792	0.1%
Profit before tax	Rs m	4,432	2,795	-36.9%
Tax	Rs m	2,269	394	-82.7%
Profit after tax	Rs m	2,163	2,401	11.0%
Gross profit margin	%	15.4	19.2
Effective tax rate	%	51.2	14.1
Net profit margin	%	3.5	6.4

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GFL Balance Sheet Analysis

• The company's current liabilities during FY18 down at Rs 30 billion as compared to Rs 38 billion in FY17, thereby witnessing an decrease of -20.7%.
• Long-term debt down at Rs 6 billion as compared to Rs 11 billion during FY17, a fall of 48.0%.
• Current assets fell 33% and stood at Rs 40 billion, while fixed assets rose 16% and stood at Rs 58 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 98 billion as against Rs 109 billion during FY17, thereby witnessing a fall of 11%.

GFL Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	45,182	47,659	5.5
Current Liabilities	Rs m	37,573	29,814	-20.7
Long-term Debt	Rs m	11,438	5,952	-48.0
Total Liabilities	Rs m	109,308	97,528	-10.8
Current assets	Rs m	59,220	39,662	-33.0
Fixed Assets	Rs m	50,087	57,865	15.5
Total Assets	Rs m	109,308	97,528	-10.8

GFL Cash Flow Statement Analysis

• GFL's cash flow from operating activities (CFO) during FY18 stood at Rs 10 billion, an improvement of 30.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs 6 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -17 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -1 billion from the Rs 1 billion net cash flows seen during FY17.

GFL 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	7,317	9,518	30.1%
Cash Flow from Investing Activities	Rs m	-6,744	5,890	-
Cash Flow from Financing Activities	Rs m	532	-16,681	-
Net Cash Flow	Rs m	1,105	-1,269	-

Current Valuations for GFL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 21.9, an improvement from the EPS of Rs 19.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 780.6, stands at 35.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.8 times, while the price to sales ratio stands at 2.3 times.
• The company's price to cash flow (P/CF) ratio stood at 16.2 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	562.9	344.1
TTM Earnings per share	Rs	19.7	21.9
Diluted earnings per share	Rs	19.7	21.9
Price to Cash Flow	x	14.7	16.2
TTM P/E ratio	x	61.5	35.9
Price / Book Value ratio	x	1.5	1.8
Market Cap	Rs m	67,228	87,636
Dividends per share (Unadj.)	Rs	3.5	3.5

Ratio Analysis for GFL

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.3x during FY18, from 1.6x 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 2.0x during FY18, from 2.6x 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 5.0% during FY18, from 4.8% 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 10.4% during FY18, from 12.8% 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 5.3% 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	1.6	1.3
Debtors’ Days	Days	1,638	1,877
Interest coverage	x	2.6	2.0
Debt to equity ratio	x	0.3	0.1
Return on assets	%	4.5	5.3
Return on equity	%	4.8	5.0
Return on capital employed	%	12.8	10.4

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

GFL Share Price Performance

Over the last one year, GFL share price has moved up from Rs 758.2 to Rs 780.6, registering a gain of Rs 22.4 or around 3.0%.

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

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

Read: Latest Annual Report Analysis of GFL