ICRA 2018-19 Annual Report Analysis

Sun, 31 Mar

ICRA 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.

ICRA Income Statement Analysis

• Operating income during the year rose 6.2% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 1.9% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 34.4% in FY19 as against 37.3% in FY18.
• Depreciation charges decreased by 25.3% and finance costs decreased by 27.9% YoY, respectively.
• Other income declined by 9.2% YoY.
• Net profit for the year grew by 4.7% YoY.
• Net profit margins during the year declined from 32.8% in FY18 to 32.3% in FY19.

ICRA Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	3,089	3,281	6.2%
Other income	Rs m	494	448	-9.2%
Total Revenues	Rs m	3,582	3,729	4.1%
Gross profit	Rs m	1,151	1,129	-1.9%
Depreciation	Rs m	75	56	-25.3%
Interest	Rs m	1	1	-27.9%
Profit before tax	Rs m	1,568	1,520	-3.0%
Tax	Rs m	556	461	-17.1%
Profit after tax	Rs m	1,012	1,059	4.7%
Gross profit margin	%	37.3	34.4
Effective tax rate	%	35.5	30.3
Net profit margin	%	32.8	32.3

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ICRA Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 1 billion as compared to Rs 1 billion in FY18, thereby witnessing an increase of 11.1%.
• Current assets rose 40% and stood at Rs 6 billion, while fixed assets fell 45% and stood at Rs 2 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 8 billion as against Rs 8 billion during FY18, thereby witnessing a fall of 0%.

ICRA Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	6,540	6,409	-2.0
Current Liabilities	Rs m	1,068	1,186	11.1
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	7,673	7,653	-0.3
Current assets	Rs m	4,017	5,637	40.3
Fixed Assets	Rs m	3,656	2,016	-44.8
Total Assets	Rs m	7,673	7,653	-0.3

ICRA Cash Flow Statement Analysis

• ICRA's cash flow from operating activities (CFO) during FY19 stood at Rs 809 million, an improvement of 30.6% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs 447 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -1 billion on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 46 million from the Rs 123 million net cash flows seen during FY18.

ICRA 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	619	809	30.6%
Cash Flow from Investing Activities	Rs m	-538	447	-
Cash Flow from Financing Activities	Rs m	41	-1,209	-
Net Cash Flow	Rs m	123	46	-62.3%

Current Valuations for ICRA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 109.8, an improvement from the EPS of Rs 102.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,901.3, stands at 26.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.4 times, while the price to sales ratio stands at 8.5 times.
• The company's price to cash flow (P/CF) ratio stood at 29.3 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	312.0	340.0
TTM Earnings per share	Rs	102.2	109.8
Diluted earnings per share	Rs	104.8	109.8
Price to Cash Flow	x	32.3	29.3
TTM P/E ratio	x	34.7	26.8
Price / Book Value ratio	x	6.0	5.1
Market Cap	Rs m	39,088	32,669
Dividends per share (Unadj.)	Rs	30.0	30.0

Ratio Analysis for ICRA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 4.8x during FY19, from 3.8x 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 2,028.2x during FY19, from 1,508.7x 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 16.5% during FY19, from 15.5% 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 declined and down at 23.7% during FY19, from 24.0% 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 13.9% during FY19, from 13.2% 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	3.8	4.8
Debtors’ Days	Days	480	376
Interest coverage	x	1,508.7	2,028.2
Debt to equity ratio	x	0.0	0.0
Return on assets	%	13.2	13.9
Return on equity	%	15.5	16.5
Return on capital employed	%	24.0	23.7

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

ICRA Share Price Performance

Over the last one year, ICRA share price has moved down from Rs 3,633.8 to Rs 2,901.3, registering a loss of Rs 732.6 or around 20.2%.

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

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

Read: Latest Annual Report Analysis of ICRA