GREAVES COTTON 2017-18 Annual Report Analysis

Sat, 31 Mar

GREAVES COTTON 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.

GREAVES COTTON Income Statement Analysis

• Operating income during the year rose 20.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 24.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 17.2% in FY18 as against 16.6% in FY17.
• Depreciation charges increased by 11.8% increased by 0.0% YoY, respectively.
• Other income declined by 13.1% YoY.
• Net profit for the year grew by 11.9% YoY.
• Net profit margins during the year declined from 12.5% in FY17 to 11.6% in FY18.

GREAVES COTTON Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	14,496	17,445	20.3%
Other income	Rs m	556	484	-13.1%
Total Revenues	Rs m	15,052	17,929	19.1%
Gross profit	Rs m	2,408	3,000	24.6%
Depreciation	Rs m	469	524	11.8%
Interest	Rs m	8	8	0.0%
Profit before tax	Rs m	2,487	2,952	18.7%
Tax	Rs m	680	930	36.7%
Profit after tax	Rs m	1,807	2,022	11.9%
Gross profit margin	%	16.6	17.2
Effective tax rate	%	27.4	31.5
Net profit margin	%	12.5	11.6

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GREAVES COTTON Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 4 billion as compared to Rs 3 billion in FY17, thereby witnessing an increase of 15.9%.
• Current assets rose 12% and stood at Rs 7 billion, while fixed assets rose 3% and stood at Rs 6 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 13 billion as against Rs 12 billion during FY17, thereby witnessing a growth of 8%.

GREAVES COTTON Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	9,253	9,650	4.3
Current Liabilities	Rs m	3,051	3,537	15.9
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	12,499	13,462	7.7
Current assets	Rs m	6,314	7,076	12.1
Fixed Assets	Rs m	6,185	6,386	3.2
Total Assets	Rs m	12,499	13,462	7.7

GREAVES COTTON Cash Flow Statement Analysis

• GREAVES COTTON's cash flow from operating activities (CFO) during FY18 stood at Rs 3 billion, an improvement of 144.4% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -972 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -2 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 199 million from the Rs 24 million net cash flows seen during FY17.

GREAVES COTTON 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	1,144	2,796	144.4%
Cash Flow from Investing Activities	Rs m	359	-972	-
Cash Flow from Financing Activities	Rs m	-1,479	-1,625	-
Net Cash Flow	Rs m	24	199	733.9%

Current Valuations for GREAVES COTTON

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 8.3, an improvement from the EPS of Rs 7.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 113.9, stands at 13.0 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 1.6 times.
• The company's price to cash flow (P/CF) ratio stood at 13.9 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	59.4	71.4
TTM Earnings per share	Rs	7.4	8.3
Diluted earnings per share	Rs	7.8	8.7
Price to Cash Flow	x	17.8	13.9
TTM P/E ratio	x	22.4	13.0
Price / Book Value ratio	x	3.9	3.7
Market Cap	Rs m	35,666	35,465
Dividends per share (Unadj.)	Rs	5.5	5.5

Ratio Analysis for GREAVES COTTON

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.0x during FY18, from 2.1x 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 365.4x during FY18, from 308.0x 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 21.0% during FY18, from 19.5% 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 30.7% during FY18, from 27.0% 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 15.1% during FY18, from 14.5% 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	2.1	2.0
Debtors’ Days	Days	7	5
Interest coverage	x	308.0	365.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	14.5	15.1
Return on equity	%	19.5	21.0
Return on capital employed	%	27.0	30.7

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

GREAVES COTTON Share Price Performance

Over the last one year, GREAVES COTTON share price has moved down from Rs 174.7 to Rs 113.9, registering a loss of Rs 60.8 or around 34.8%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 18,476.7 (down 0.1%). Over the last one year it has moved up from 16,446.0 to 18,476.7, a gain of 2,031 points (up 12.3%).

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

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

Read: Latest Annual Report Analysis of GREAVES COTTON