SAREGAMA 2017-18 Annual Report Analysis

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SAREGAMA 2017-18 Annual Report Analysis
Fri, 11 Jan

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 284.4% 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 43.4% YoY, respectively.
  • Other income declined by 23.3% YoY.
  • Net profit for the year grew by 227.5% YoY.
  • Net profit margins during the year grew from 3.7% in FY17 to 7.7% 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 94 363 284.4%
Depreciation Rs m 44 42 -6.3%
Interest Rs m 24 34 43.4%
Profit before tax Rs m 159 389 144.3%
Tax Rs m 73 106 45.7%
Profit after tax Rs m 86 283 227.5%
Gross profit margin % 4.3 10.2
Effective tax rate % 45.8 27.3
Net profit margin % 3.7 7.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



SAREGAMA Balance Sheet Analysis

  • The company's current liabilities during FY18 stood at Rs 1 billion as compared to Rs 908 million in FY17, thereby witnessing an increase of 58.6%.
  • Current assets rose 51% and stood at Rs 2 billion, while fixed assets fell 1% and stood at Rs 2 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 3,817 12.4
 
Current Liabilities Rs m 908 1,441 58.6
Long-term Debt Rs m 0 0 0.0
Total Liabilities Rs m 4,797 5,784 20.6
 
Current assets Rs m 1,425 2,149 50.8
Fixed Assets Rs m 1,989 1,973 -0.8
Total Assets Rs m 4,797 5,784 20.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



SAREGAMA Cash Flow Statement Analysis

  • SAREGAMA's cash flow from operating activities (CFO) during FY18 stood at Rs -186 million, an improvement of 415.5% 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 -186 -
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 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 601.0, stands at 46.8 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.7 times, while the price to sales ratio stands at 2.9 times.
  • The company's price to cash flow (P/CF) ratio stood at 32.2 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 125.6 204.8
TTM Earnings per share Rs 5.0 16.3
Diluted earnings per share Rs 5.0 16.3
Price to Cash Flow x 80.0 32.2
TTM P/E ratio x 46.8 46.8
Price / Book Value ratio x 1.4 2.7
Market Cap Rs m 10,457 10,457
Dividends per share (Unadj.) Rs 1.5 3.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for SAREGAMA

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 1.5x 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 12.5x 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 5.5% during FY18, from 2.3% 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 1.5
Debtors’ Days Days 87 75
Interest coverage x 7.8 12.5
Debt to equity ratio x 0.0 0.0
Return on assets % 2.3 5.5
Return on equity % 2.5 7.4
Return on capital employed % 5.4 11.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 830.5 to Rs 601.0, registering a loss of Rs 229.5 or around 27.6%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 7,058.8 (down 0.8%). Over the last one year it has moved up from 6,572.8 to 7,058.8, a gain of 486 points (up 7.4%).

Overall, the S&P BSE SENSEX is up 4.7% over the year.

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

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