HINDUSTAN COPPER 2017-18 Annual Report Analysis

Sat, 31 Mar

HINDUSTAN COPPER 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.

HINDUSTAN COPPER Income Statement Analysis

• Operating income during the year rose 49.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 32.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 8.4% in FY18 as against 9.5% in FY17.
• Depreciation charges increased by 41.2% and finance costs increased by 71.2% YoY, respectively.
• Other income grew by 49.6% YoY.
• Net profit for the year grew by 28.5% YoY.
• Net profit margins during the year declined from 5.6% in FY17 to 4.9% in FY18.

HINDUSTAN COPPER Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	10,971	16,351	49.0%
Other income	Rs m	275	411	49.6%
Total Revenues	Rs m	11,246	16,761	49.0%
Gross profit	Rs m	1,037	1,369	32.0%
Depreciation	Rs m	232	327	41.2%
Interest	Rs m	138	236	71.2%
Profit before tax	Rs m	942	1,217	29.2%
Tax	Rs m	323	421	30.4%
Profit after tax	Rs m	619	796	28.5%
Gross profit margin	%	9.5	8.4
Effective tax rate	%	34.2	34.6
Net profit margin	%	5.6	4.9

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HINDUSTAN COPPER Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 11 billion as compared to Rs 7 billion in FY17, thereby witnessing an increase of 48.0%.
• Long-term debt down at Rs 1 billion as compared to Rs 2 billion during FY17, a fall of 50.2%.
• Current assets fell 9% and stood at Rs 12 billion, while fixed assets rose 51% and stood at Rs 11 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 28 billion as against Rs 25 billion during FY17, thereby witnessing a growth of 13%.

HINDUSTAN COPPER Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	14,670	15,273	4.1
Current Liabilities	Rs m	7,481	11,074	48.0
Long-term Debt	Rs m	2,050	1,021	-50.2
Total Liabilities	Rs m	24,581	27,721	12.8
Current assets	Rs m	13,112	11,976	-8.7
Fixed Assets	Rs m	7,229	10,904	50.8
Total Assets	Rs m	24,581	27,721	12.8

HINDUSTAN COPPER Cash Flow Statement Analysis

• HINDUSTAN COPPER's cash flow from operating activities (CFO) during FY18 stood at Rs 4 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -6 billion, an improvement of 116.3% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -961 million on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -3 billion from the Rs -5 billion net cash flows seen during FY17.

HINDUSTAN COPPER 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	-2,596	3,718	-
Cash Flow from Investing Activities	Rs m	-2,577	-5,575	-
Cash Flow from Financing Activities	Rs m	-84	-961	-
Net Cash Flow	Rs m	-5,257	-2,818	-

Current Valuations for HINDUSTAN COPPER

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.9, an improvement from the EPS of Rs 0.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 63.0, stands at 76.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.0 times, while the price to sales ratio stands at 3.6 times.
• The company's price to cash flow (P/CF) ratio stood at 68.4 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	11.9	17.7
TTM Earnings per share	Rs	0.7	0.9
Diluted earnings per share	Rs	0.6	0.8
Price to Cash Flow	x	75.1	68.4
TTM P/E ratio	x	103.6	76.3
Price / Book Value ratio	x	3.7	5.0
Market Cap	Rs m	53,616	76,793
Dividends per share (Unadj.)	Rs	0.2	0.3

Ratio Analysis for HINDUSTAN COPPER

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.1x during FY18, from 1.8x 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 6.2x 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 5.2% during FY18, from 4.2% 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 8.9% during FY18, from 6.5% 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 3.7% during FY18, from 3.1% 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	1.8	1.1
Debtors’ Days	Days	549	182
Interest coverage	x	7.8	6.2
Debt to equity ratio	x	0.1	0.1
Return on assets	%	3.1	3.7
Return on equity	%	4.2	5.2
Return on capital employed	%	6.5	8.9

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

HINDUSTAN COPPER Share Price Performance

Over the last one year, HINDUSTAN COPPER share price has moved down from Rs 66.1 to Rs 63.0, registering a loss of Rs 3.2 or around 4.8%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 13,322.0 (down 2.0%). Over the last one year it has moved up from 11,804.5 to 13,322.0, a gain of 1,518 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 HINDUSTAN COPPER and quarterly results for HINDUSTAN COPPER)

Read: Latest Annual Report Analysis of HINDUSTAN COPPER