HERITAGE FOOD 2018-19 Annual Report Analysis

Mon, 16 Sep

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 increased by 33.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 7.4% in FY19 as against 5.8% in FY18.
• Depreciation charges increased by 18.1% and finance costs increased by 17.8% YoY, respectively.
• Other income grew by 17.6% YoY.
• Net profit for the year grew by 32.2% 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	23,731	25,148	6.0%
Other income	Rs m	77	90	17.6%
Total Revenues	Rs m	23,808	25,238	6.0%
Gross profit	Rs m	1,383	1,850	33.8%
Depreciation	Rs m	378	447	18.1%
Interest	Rs m	182	215	17.8%
Profit before tax	Rs m	899	1,279	42.3%
Tax	Rs m	271	447	64.7%
Profit after tax	Rs m	627	829	32.2%
Gross profit margin	%	5.8	7.4
Effective tax rate	%	30.2	34.9
Net profit margin	%	2.6	3.3

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 17.0%.
• Current assets rose 8% and stood at Rs 3 billion, while fixed assets rose 19% and stood at Rs 5 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	7,777	8,026	3.2
Current Liabilities	Rs m	3,259	3,256	-0.1
Long-term Debt	Rs m	1,423	1,666	17.0
Total Liabilities	Rs m	17,066	16,345	-4.2
Current assets	Rs m	2,540	2,749	8.2
Fixed Assets	Rs m	4,424	5,260	18.9
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 35.7, an improvement from the EPS of Rs 27.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 378.0, stands at 21.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.7 times, while the price to sales ratio stands at 0.6 times.
• The company's price to cash flow (P/CF) ratio stood at 13.7 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	1,022.9	1,083.9
TTM Earnings per share	Rs	27.0	35.7
Diluted earnings per share	Rs	13.5	17.9
Price to Cash Flow	x	8.7	13.7
TTM P/E ratio	x	10.9	21.7
Price / Book Value ratio	x	2.1	1.7
Market Cap	Rs m	8,770	17,538
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 7.0x during FY19, from 5.9x 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 10.3% 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 15.4% during FY19, from 11.7% 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 6.4% during FY19, from 4.7% 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	2	6
Interest coverage	x	5.9	7.0
Debt to equity ratio	x	0.2	0.2
Return on assets	%	4.7	6.4
Return on equity	%	8.1	10.3
Return on capital employed	%	11.7	15.4

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 574.7 to Rs 378.0, registering a loss of Rs 196.7 or around 34.2%.

Overall, the S&P BSE SENSEX is down 2.5% over the year.

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