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HOV SERVICES 2017-18 Annual Report Analysis

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HOV SERVICES 2017-18 Annual Report Analysis
Wed, 15 May

HOV SERVICES 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.

HOV SERVICES Income Statement Analysis

  • Operating income during the year fell 11.9% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 185.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 1.5% in FY18 as against 0.5% in FY17.
  • Depreciation charges increased by 25.9% and finance costs decreased by 59.7% YoY, respectively.
  • Other income grew by 315.8% YoY.
  • Net profit for the year declined by 101.6% YoY.
  • Net profit margins during the year grew from 885.4% in FY17 to 13.4% in FY18.

HOV SERVICES Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 154 136 -11.9%
Other income Rs m 10 42 315.8%
Total Revenues Rs m 164 178 8.3%
Gross profit Rs m 1 2 185.7%
Depreciation Rs m 9 11 25.9%
Interest Rs m 6 3 -59.7%
Profit before tax Rs m -4 31 -889.7%
Tax Rs m 6 7 18.8%
Profit after tax Rs m -1,456 24 -101.6%
Gross profit margin % 0.5 1.5
Effective tax rate % -151.0 22.7
Net profit margin % -885.4 13.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



HOV SERVICES Balance Sheet Analysis

  • The company's current liabilities during FY18 down at Rs 37 million as compared to Rs 132 million in FY17, thereby witnessing an decrease of -72.1%.
  • Long-term debt down at Rs 43 million as compared to Rs 52 million during FY17, a fall of 18.2%.
  • Current assets fell 37% and stood at Rs 110 million, while fixed assets fell 9% and stood at Rs 107 million in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 10 billion as against Rs 525 million during FY17, thereby witnessing a growth of 1,828%.

HOV SERVICES Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 340 7,163 2,004.9
 
Current Liabilities Rs m 132 37 -72.1
Long-term Debt Rs m 52 43 -18.2
Total Liabilities Rs m 525 10,114 1,828.3
 
Current assets Rs m 175 110 -37.2
Fixed Assets Rs m 118 107 -9.2
Total Assets Rs m 525 10,114 1,828.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



HOV SERVICES Cash Flow Statement Analysis

  • HOV SERVICES's cash flow from operating activities (CFO) during FY18 stood at Rs 99 million, an improvement of 691.2% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs 6 million on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -79 million on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs 27 million from the Rs 11 million net cash flows seen during FY17.

HOV SERVICES 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 13 99 691.2%
Cash Flow from Investing Activities Rs m 10 6 -33.7%
Cash Flow from Financing Activities Rs m -11 -79 -
Net Cash Flow Rs m 11 27 144.0%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for HOV SERVICES

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 1.9, an improvement from the EPS of Rs -116.2 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 126.1, stands at -17.6 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 0.5 times, while the price to sales ratio stands at 26.5 times.
  • The company's price to cash flow (P/CF) ratio stood at 45.8 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 12.3 10.8
TTM Earnings per share Rs -116.2 1.9
Diluted earnings per share Rs -116.1 1.9
Price to Cash Flow x -1,224.3 45.8
TTM P/E ratio x -17.6 -17.6
Price / Book Value ratio x 5.1 0.5
Market Cap Rs m 1,579 1,581
Dividends per share (Unadj.) Rs 0.0 0.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for HOV SERVICES

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 3.0x during FY18, from 1.3x 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 13.3x during FY18, from 0.4x 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 0.3% during FY18, from -427.7% 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 0.5% during FY18, from -367.7% 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 0.3% during FY18, from -276.3% 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 1.3 3.0
Debtors’ Days Days 103 116
Interest coverage x 0.4 13.3
Debt to equity ratio x 0.2 0.0
Return on assets % -276.3 0.3
Return on equity % -427.7 0.3
Return on capital employed % -367.7 0.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

HOV SERVICES Share Price Performance

Over the last one year, HOV SERVICES share price has moved up from Rs 202.5 to Rs 126.1, registering a loss of Rs 76.5 or around 37.8%.

Overall, the S&P BSE SENSEX is up 4.9% over the year.

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

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