SAREGAMA 2017-18 Annual Report Analysis

Sat, 31 Mar

SAREGAMA 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.

SAREGAMA Income Statement Analysis

• Operating income during the year rose 63.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 284.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 10.2% in FY18 as against 4.3% in FY17.
• Depreciation charges decreased by 6.3% and finance costs increased by 43.2% YoY, respectively.
• Other income declined by 23.3% YoY.
• Net profit for the year grew by 227.2% YoY.
• Net profit margins during the year grew from 4.0% in FY17 to 7.9% in FY18.

SAREGAMA Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	2,185	3,566	63.2%
Other income	Rs m	133	102	-23.3%
Total Revenues	Rs m	2,318	3,668	58.2%
Gross profit	Rs m	94	363	284.2%
Depreciation	Rs m	44	42	-6.3%
Interest	Rs m	24	34	43.2%
Profit before tax	Rs m	159	389	144.3%
Tax	Rs m	73	106	45.8%
Profit after tax	Rs m	86	283	227.2%
Gross profit margin	%	4.3	10.2
Effective tax rate	%	45.7	27.3
Net profit margin	%	4.0	7.9

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SAREGAMA Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 2 billion as compared to Rs 1 billion in FY17, thereby witnessing an increase of 47.7%.
• Current assets rose 45% and stood at Rs 3 billion, while fixed assets rose 8% and stood at Rs 4 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 6 billion as against Rs 5 billion during FY17, thereby witnessing a growth of 21%.

SAREGAMA Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	3,398	3,816	12.3
Current Liabilities	Rs m	1,320	1,951	47.7
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	5,209	6,294	20.8
Current assets	Rs m	1,837	2,659	44.7
Fixed Assets	Rs m	3,372	3,635	7.8
Total Assets	Rs m	5,209	6,294	20.8

SAREGAMA Cash Flow Statement Analysis

• SAREGAMA's cash flow from operating activities (CFO) during FY18 stood at Rs -190 million, an improvement of 425.0% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -2 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs 91 million, an improvement of 369% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -97 million from the Rs -65 million net cash flows seen during FY17.

SAREGAMA 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	-36	-190	-
Cash Flow from Investing Activities	Rs m	5	-2	-
Cash Flow from Financing Activities	Rs m	-34	91	-
Net Cash Flow	Rs m	-65	-97	-

Current Valuations for SAREGAMA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 16.3, an improvement from the EPS of Rs 5.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 657.8, stands at 415.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 33.2 times, while the price to sales ratio stands at 3.2 times.
• The company's price to cash flow (P/CF) ratio stood at 31.4 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	125.6	204.8
TTM Earnings per share	Rs	5.0	16.3
Diluted earnings per share	Rs	0.4	1.5
Price to Cash Flow	x	341.8	31.4
TTM P/E ratio	x	521.0	415.7
Price / Book Value ratio	x	1.4	2.7
Market Cap	Rs m	4,610	10,176
Dividends per share (Unadj.)	Rs	0.2	0.3

Ratio Analysis for SAREGAMA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.4x during FY18, from 1.4x 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 12.6x during FY18, from 7.8x 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 7.4% during FY18, from 2.5% 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 11.1% during FY18, from 5.4% 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 5.0% during FY18, from 2.1% 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	1.4	1.4
Debtors’ Days	Days	873	748
Interest coverage	x	7.8	12.6
Debt to equity ratio	x	0.0	0.0
Return on assets	%	2.1	5.0
Return on equity	%	2.5	7.4
Return on capital employed	%	5.4	11.1

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

SAREGAMA Share Price Performance

Over the last one year, SAREGAMA share price has moved up from Rs 231.9 to Rs 657.8, registering a gain of Rs 426.0 or around 183.7%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 6,513.3 (down 0.7%). Over the last one year it has moved up from 5,771.5 to 6,513.3, a gain of 742 points (up 12.9%).

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

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

Read: Latest Annual Report Analysis of SAREGAMA