Helping You Build Wealth With Honest Research
Since 1996. Try Now

MEMBER'S LOGINX

     
Invalid Username / Password
   
     
   
     
 
Invalid Captcha
   
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  


HFCL 2018-19 Annual Report Analysis
Sun, 31 Mar

HFCL 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.

HFCL Income Statement Analysis

  • Operating income during the year rose 47.8% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 51.9% YoY during the fiscal. Operating profit margins witnessed a fall and down at 8.7% in FY19 as against 8.4% in FY18.
  • Depreciation charges increased by 16.1% and finance costs increased by 44.4% YoY, respectively.
  • Other income grew by 33.8% YoY.
  • Net profit for the year grew by 36.4% YoY.
  • Net profit margins during the year declined from 5.3% in FY18 to 4.9% in FY19.

HFCL Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 32,062 47,378 47.8%
Other income Rs m 351 470 33.8%
Total Revenues Rs m 32,413 47,848 47.6%
Gross profit Rs m 2,708 4,113 51.9%
Depreciation Rs m 232 270 16.1%
Interest Rs m 636 919 44.4%
Profit before tax Rs m 2,190 3,394 55.0%
Tax Rs m 487 1,070 119.8%
Profit after tax Rs m 1,703 2,324 36.4%
Gross profit margin % 8.4 8.7
Effective tax rate % 22.2 31.5
Net profit margin % 5.3 4.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Read Now: We're Bullish on 2 Non-Nifty Stocks

HFCL Balance Sheet Analysis

  • The company's current liabilities during FY19 stood at Rs 17 billion as compared to Rs 13 billion in FY18, thereby witnessing an increase of 34.2%.
  • Long-term debt down at Rs 1 billion as compared to Rs 1 billion during FY18, a fall of 4.9%.
  • Current assets rose 24% and stood at Rs 27 billion, while fixed assets rose 69% and stood at Rs 5 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 32 billion as against Rs 25 billion during FY18, thereby witnessing a growth of 30%.

HFCL Balance Sheet as on March 2019

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 11,607 14,290 23.1
 
Current Liabilities Rs m 12,671 17,011 34.2
Long-term Debt Rs m 1,413 1,344 -4.9
Total Liabilities Rs m 24,697 32,143 30.2
 
Current assets Rs m 21,450 26,660 24.3
Fixed Assets Rs m 3,247 5,482 68.9
Total Assets Rs m 24,697 32,143 30.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



HFCL Cash Flow Statement Analysis

  • HFCL's cash flow from operating activities (CFO) during FY19 stood at Rs 339 million on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs -2 billion, an improvement of 400.8% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY19 stood at Rs 674 million, an improvement of 158% on a YoY basis.
  • Overall, net cash flows for the company during FY19 stood at Rs -490 million from the Rs 607 million net cash flows seen during FY18.

HFCL 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 2,071 339 -83.6%
Cash Flow from Investing Activities Rs m -300 -1,503 -
Cash Flow from Financing Activities Rs m -1,164 674 -
Net Cash Flow Rs m 607 -490 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for HFCL

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 1.8, an improvement from the EPS of Rs 1.4 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 22.8, stands at 17.1 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.2 times, while the price to sales ratio stands at 0.6 times.
  • The company's price to cash flow (P/CF) ratio stood at 12.9 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 25.9 37.2
TTM Earnings per share Rs 1.4 1.8
Diluted earnings per share Rs 1.2 1.7
Price to Cash Flow x 18.4 12.9
TTM P/E ratio x 23.0 17.1
Price / Book Value ratio x 2.6 2.3
Market Cap Rs m 30,055 33,421
Dividends per share (Unadj.) Rs 0.1 0.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for HFCL

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 1.6x during FY19, from 1.7x 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 4.7x during FY19, from 4.4x 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 improved and stood at 16.3% during FY19, from 14.7% 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 27.6% during FY19, from 21.7% 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 improved and stood at 10.1% during FY19, from 9.5% 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 1.7 1.6
Debtors’ Days Days 13 11
Interest coverage x 4.4 4.7
Debt to equity ratio x 0.1 0.1
Return on assets % 9.5 10.1
Return on equity % 14.7 16.3
Return on capital employed % 21.7 27.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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

HFCL Share Price Performance

Over the last one year, HFCL share price has moved down from Rs 25.9 to Rs 22.8, registering a loss of Rs 3.1 or around 12.0%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 7,621.8 (up 0.4%). Over the last one year it has moved up from 6,513.3 to 7,621.8, a gain of 1,109 points (up 17.0%).

Overall, the S&P BSE SENSEX is up 16.3% over the year.

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

Annual Report FAQs

What is the current share price of HFCL?

HFCL currently trades at Rs 91.9 per share. You can check out the latest share price performance of HFCL here...

What was the revenue of HFCL in FY19? How does it compare to earlier years?

The revenues of HFCL stood at Rs 47,848 m in FY19, which was up 47.6% compared to Rs 32,413 m reported in FY18.

HFCL's revenue has grown from Rs 23,227 m in FY16 to Rs 47,848 m in FY19.

Over the past 4 years, the revenue of HFCL has grown at a CAGR of 27.2%.

What was the net profit of HFCL in FY19? How does it compare to earlier years?

The net profit of HFCL stood at Rs 2,324 m in FY19, which was up 36.4% compared to Rs 1,703 m reported in FY18.

This compares to a net profit of Rs 1,297 m in FY17 and a net profit of Rs 1,532 m in FY16.

Over the past 4 years, HFCL net profit has grown at a CAGR of 14.9%.

What does the cash flow statement of HFCL reveal?

The cash flow statement is the financial statement that presents the cash inflows and outflows of a company during a given period of time.

This statement is one of the most useful tools for judging a company's liquidity position. The ratios and parameters in this statement helps test a company's financial health.

The cash flow statement of HFCL reveals:

  • Cash flow from operations decreased in FY19 and stood at Rs 339 m as compared to Rs 2,071 m in FY18.
  • Cash flow from investments decreased in FY19 and stood at Rs -1,503 m as compared to Rs -300 m in FY18.
  • Cash flow from financial activity increased in FY19 and stood at Rs 674 m as compared to Rs -1,164 m in FY18.

Here's the cash flow statement of HFCL for the past 4 years.

(Rs m)FY16FY17FY18FY19
From Operations41,3612,071339
From Investments373-250-300-1,503
From Financial Activity-552-1,142-1,164674
Net Cashflow-175-32607-490

What does the Key Ratio analysis of HFCL reveal?

Be it the company's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.

The ratio/financial analysis of HFCL reveals:

  • Operating profit margins witnessed a fall and down at 8.7% in FY19 as against 8.4% in FY18.
  • Net profit margins declined from 5.3% in FY18 to 4.9% in FY19.
  • Debt to Equity ratio for FY19 stood at 0.1 as compared to 0.1 in FY18.

Here's the ratio/financial analysis of HFCL for the past 4 years.

 FY16FY17FY18FY19
Operating Profit Margin (%)9.09.48.48.7
Net Profit Margin (%)6.76.35.34.9
Debt to Equity Ratio (x)0.40.30.10.1

Read: Latest Annual Report Analysis of HFCL

Equitymaster requests your view! Post a comment on "HFCL 2018-19 Annual Report Analysis". Click here!