GVK POWER & INFRA 2017-18 Annual Report Analysis

Sat, 31 Mar

GVK POWER & INFRA 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.

GVK POWER & INFRA Income Statement Analysis

• Operating income during the year rose 9.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 34.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 40.3% in FY18 as against 32.9% in FY17.
• Depreciation charges increased by 8.4% and finance costs decreased by 13.1% YoY, respectively.
• Other income grew by 88.5% YoY.
• Net profit for the year declined by 103.4% YoY.
• Net profit margins during the year grew from 26.4% in FY17 to 0.8% in FY18.

GVK POWER & INFRA Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	35,165	38,632	9.9%
Other income	Rs m	5,327	10,042	88.5%
Total Revenues	Rs m	40,491	48,674	20.2%
Gross profit	Rs m	11,563	15,562	34.6%
Depreciation	Rs m	6,687	7,246	8.4%
Interest	Rs m	18,904	16,431	-13.1%
Profit before tax	Rs m	-8,701	1,927	-122.1%
Tax	Rs m	573	1,616	182.1%
Profit after tax	Rs m	-9,273	311	-103.4%
Gross profit margin	%	32.9	40.3
Effective tax rate	%	-6.6	83.8
Net profit margin	%	-26.4	0.8

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GVK POWER & INFRA Balance Sheet Analysis

• The company's current liabilities during FY18 down at Rs 57 billion as compared to Rs 70 billion in FY17, thereby witnessing an decrease of -17.9%.
• Long-term debt stood at Rs 107 billion as compared to Rs 105 billion during FY17, a growth of 1.7%.
• Current assets rose 29% and stood at Rs 26 billion, while fixed assets fell 5% and stood at Rs 175 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 201 billion as against Rs 205 billion during FY17, thereby witnessing a fall of 2%.

GVK POWER & INFRA Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	-2,968	-8,413	183.4
Current Liabilities	Rs m	69,690	57,248	-17.9
Long-term Debt	Rs m	105,115	106,933	1.7
Total Liabilities	Rs m	205,074	201,097	-1.9
Current assets	Rs m	19,877	25,602	28.8
Fixed Assets	Rs m	185,197	175,495	-5.2
Total Assets	Rs m	205,074	201,097	-1.9

GVK POWER & INFRA Cash Flow Statement Analysis

• GVK POWER & INFRA's cash flow from operating activities (CFO) during FY18 stood at Rs 25 billion, an improvement of 73.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -79 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -24 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 433 million from the Rs 2 billion net cash flows seen during FY17.

GVK POWER & INFRA 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	14,332	24,826	73.2%
Cash Flow from Investing Activities	Rs m	8,975	-79	-
Cash Flow from Financing Activities	Rs m	-21,721	-24,314	-
Net Cash Flow	Rs m	1,586	433	-72.7%

Current Valuations for GVK POWER & INFRA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.2, an improvement from the EPS of Rs -5.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 14.2, stands at -61.9 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 0.6 times.
• The company's price to cash flow (P/CF) ratio stood at 3.4 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	22.3	24.5
TTM Earnings per share	Rs	-5.9	0.2
Diluted earnings per share	Rs	-5.9	0.2
Price to Cash Flow	x	-3.6	3.4
TTM P/E ratio	x	7.6	-61.9
Price / Book Value ratio	x	-3.1	-3.1
Market Cap	Rs m	9,341	25,978
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for GVK POWER & INFRA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.4x during FY18, from 0.3x 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 1.1x during FY18, from 0.5x 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 declined and down at -3.7% during FY18, from 312.4% 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 18.6% during FY18, from 10.0% 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 8.3% during FY18, from 4.7% 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	0.3	0.4
Debtors’ Days	Days	461	395
Interest coverage	x	0.5	1.1
Debt to equity ratio	x	-35.4	-12.7
Return on assets	%	4.7	8.3
Return on equity	%	312.4	-3.7
Return on capital employed	%	10.0	18.6

To see how GVK POWER & INFRA has performed over the last 5 years, please visit here.

GVK POWER & INFRA Share Price Performance

Over the last one year, GVK POWER & INFRA share price has moved up from Rs 6.0 to Rs 14.2, registering a gain of Rs 8.2 or around 137.0%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 2,125.8 (down 1.1%). Over the last one year it has moved up from 0.0 to 2,125.8, a gain of 2,126 points (up 0.0%).

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

(To know more, check out historical annual results for GVK POWER & INFRA and quarterly results for GVK POWER & INFRA)

Read: Latest Annual Report Analysis of GVK POWER & INFRA