GHCL 2018-19 Annual Report Analysis

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GHCL 2018-19 Annual Report Analysis
Fri, 24 May

GHCL 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.

GHCL Income Statement Analysis

  • Operating income during the year rose 14.5% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 25.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 22.7% in FY19 as against 20.8% in FY18.
  • Depreciation charges increased by 6.2% and finance costs increased by 0.6% YoY, respectively.
  • Other income declined by 59.1% YoY.
  • Net profit for the year declined by 1.6% YoY.
  • Net profit margins during the year declined from 12.1% in FY18 to 10.4% in FY19.

GHCL Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 29,192 33,413 14.5%
Other income Rs m 379 155 -59.1%
Total Revenues Rs m 29,572 33,568 13.5%
Gross profit Rs m 6,061 7,594 25.3%
Depreciation Rs m 1,101 1,169 6.2%
Interest Rs m 1,266 1,273 0.6%
Profit before tax Rs m 4,074 5,306 30.2%
Tax Rs m 511 1,801 252.7%
Profit after tax Rs m 3,564 3,506 -1.6%
Gross profit margin % 20.8 22.7
Effective tax rate % 12.5 33.9
Net profit margin % 12.1 10.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



GHCL Balance Sheet Analysis

  • The company's current liabilities during FY19 stood at Rs 11 billion as compared to Rs 11 billion in FY18, thereby witnessing an increase of 3.4%.
  • Long-term debt down at Rs 7 billion as compared to Rs 7 billion during FY18, a fall of 5.7%.
  • Current assets rose 20% and stood at Rs 12 billion, while fixed assets rose 5% and stood at Rs 27 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 40 billion as against Rs 36 billion during FY18, thereby witnessing a growth of 10%.

GHCL Balance Sheet as on March 2019

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 16,108 19,255 19.5
 
Current Liabilities Rs m 10,717 11,082 3.4
Long-term Debt Rs m 7,443 7,020 -5.7
Total Liabilities Rs m 36,281 39,949 10.1
 
Current assets Rs m 10,003 11,995 19.9
Fixed Assets Rs m 25,752 27,085 5.2
Total Assets Rs m 36,281 39,949 10.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



GHCL Cash Flow Statement Analysis

  • GHCL's cash flow from operating activities (CFO) during FY19 stood at Rs 5 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs -3 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY19 stood at Rs -3 billion, an improvement of 16% on a YoY basis.
  • Overall, net cash flows for the company during FY19 stood at Rs 6 million from the Rs 23 million net cash flows seen during FY18.

GHCL 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 5,895 5,302 -10.1%
Cash Flow from Investing Activities Rs m -2,794 -2,712 -
Cash Flow from Financing Activities Rs m -3,078 -2,584 -
Net Cash Flow Rs m 23 6 -73.8%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for GHCL

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 35.8, an decline from the EPS of Rs 36.6 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 244.8, stands at 6.8 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.2 times, while the price to sales ratio stands at 0.7 times.
  • The company's price to cash flow (P/CF) ratio stood at 5.2 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 299.7 340.8
TTM Earnings per share Rs 36.6 35.8
Diluted earnings per share Rs 35.6 35.1
Price to Cash Flow x 5.1 5.2
TTM P/E ratio x 6.6 6.8
Price / Book Value ratio x 1.7 1.2
Market Cap Rs m 23,844 24,480
Dividends per share (Unadj.) Rs 5.0 5.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for GHCL

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 1.1x during FY19, from 0.9x 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 improved and stood at 5.2x during FY19, from 4.2x 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 18.2% during FY19, from 22.1% 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 improved and stood at 25.0% during FY19, from 22.7% 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 declined and down at 12.0% during FY19, from 13.3% 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 0.9 1.1
Debtors’ Days Days 29 32
Interest coverage x 4.2 5.2
Debt to equity ratio x 0.5 0.4
Return on assets % 13.3 12.0
Return on equity % 22.1 18.2
Return on capital employed % 22.7 25.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

GHCL Share Price Performance

Over the last one year, GHCL share price has moved up from Rs 275.5 to Rs 244.8, registering a loss of Rs 30.8 or around 11.2%.

Overall, the S&P BSE SENSEX is up 13.6% over the year.

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

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