HERITAGE FOOD 2018-19 Annual Report Analysis

Sun, 31 Mar

HERITAGE FOOD 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.

HERITAGE FOOD Income Statement Analysis

• Operating income during the year rose 6.0% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 121.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 2.2% in FY19 as against 10.8% in FY18.
• Depreciation charges increased by 18.1% and finance costs increased by 16.1% YoY, respectively.
• Other income declined by 65.2% YoY.
• Net profit for the year grew by 32.6% YoY.
• Net profit margins during the year grew from 2.6% in FY18 to 3.3% in FY19.

HERITAGE FOOD Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	23,728	25,148	6.0%
Other income	Rs m	4,030	1,401	-65.2%
Total Revenues	Rs m	27,758	26,549	-4.4%
Gross profit	Rs m	-2,555	554	-121.7%
Depreciation	Rs m	378	447	18.1%
Interest	Rs m	198	230	16.1%
Profit before tax	Rs m	899	1,279	42.3%
Tax	Rs m	271	447	64.7%
Profit after tax	Rs m	628	832	32.6%
Gross profit margin	%	-10.8	2.2
Effective tax rate	%	30.2	34.9
Net profit margin	%	2.6	3.3

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HERITAGE FOOD Balance Sheet Analysis

• The company's current liabilities during FY19 down at Rs 3 billion as compared to Rs 3 billion in FY18, thereby witnessing an decrease of -0.1%.
• Long-term debt stood at Rs 2 billion as compared to Rs 1 billion during FY18, a growth of 17.1%.
• Current assets rose 8% and stood at Rs 3 billion, while fixed assets fell 6% and stood at Rs 14 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 16 billion as against Rs 17 billion during FY18, thereby witnessing a fall of 4%.

HERITAGE FOOD Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	7,745	7,994	3.2
Current Liabilities	Rs m	3,259	3,256	-0.1
Long-term Debt	Rs m	1,423	1,666	17.1
Total Liabilities	Rs m	17,066	16,345	-4.2
Current assets	Rs m	2,540	2,749	8.2
Fixed Assets	Rs m	14,526	13,596	-6.4
Total Assets	Rs m	17,066	16,345	-4.2

HERITAGE FOOD Cash Flow Statement Analysis

• HERITAGE FOOD's cash flow from operating activities (CFO) during FY19 stood at Rs 1 billion, an improvement of 22.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -1 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -33 million on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 115 million from the Rs -234 million net cash flows seen during FY18.

HERITAGE FOOD 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	1,212	1,480	22.1%
Cash Flow from Investing Activities	Rs m	-2,000	-1,331	-
Cash Flow from Financing Activities	Rs m	555	-33	-
Net Cash Flow	Rs m	-234	115	-

Current Valuations for HERITAGE FOOD

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 17.9, an improvement from the EPS of Rs 13.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 544.7, stands at 30.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.2 times, while the price to sales ratio stands at 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 21.7 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	511.4	542.0
TTM Earnings per share	Rs	13.5	17.9
Diluted earnings per share	Rs	13.5	17.9
Price to Cash Flow	x	31.8	21.7
TTM P/E ratio	x	58.7	30.4
Price / Book Value ratio	x	6.6	3.5
Market Cap	Rs m	51,417	27,791
Dividends per share (Unadj.)	Rs	2.0	2.0

Ratio Analysis for HERITAGE FOOD

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.8x during FY19, from 0.8x 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 6.6x during FY19, from 5.5x 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 10.4% during FY19, from 8.1% 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 15.6% during FY19, from 12.0% 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 6.5% during FY19, from 4.8% 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	0.8	0.8
Debtors’ Days	Days	20	61
Interest coverage	x	5.5	6.6
Debt to equity ratio	x	0.2	0.2
Return on assets	%	4.8	6.5
Return on equity	%	8.1	10.4
Return on capital employed	%	12.0	15.6

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

HERITAGE FOOD Share Price Performance

Over the last one year, HERITAGE FOOD share price has moved down from Rs 689.5 to Rs 544.7, registering a loss of Rs 144.9 or around 21.0%.

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

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

Read: Latest Annual Report Analysis of HERITAGE FOOD