IIFL FINANCE 2017-18 Annual Report Analysis

Sat, 31 Mar

IIFL FINANCE 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.

IIFL FINANCE Income Statement Analysis

• Operating income during the year rose 31.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 25.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 64.3% in FY18 as against 67.5% in FY17.
• Depreciation charges increased by 24.3% and finance costs increased by 30.1% YoY, respectively.
• Other income grew by 46.2% YoY.
• Net profit for the year grew by 24.8% YoY.
• Net profit margins during the year declined from 17.1% in FY17 to 16.2% in FY18.

IIFL FINANCE Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	48,159	63,211	31.3%
Other income	Rs m	1,277	1,867	46.2%
Total Revenues	Rs m	49,436	65,078	31.6%
Gross profit	Rs m	32,490	40,639	25.1%
Depreciation	Rs m	540	671	24.3%
Interest	Rs m	20,987	27,295	30.1%
Profit before tax	Rs m	12,240	14,539	18.8%
Tax	Rs m	4,018	4,275	6.4%
Profit after tax	Rs m	8,222	10,265	24.8%
Gross profit margin	%	67.5	64.3
Effective tax rate	%	32.8	29.4
Net profit margin	%	17.1	16.2

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IIFL FINANCE Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 209 billion as compared to Rs 156 billion in FY17, thereby witnessing an increase of 34.0%.
• Long-term debt stood at Rs 174 billion as compared to Rs 128 billion during FY17, a growth of 35.6%.
• Current assets fell 70% and stood at Rs 55 billion, while fixed assets rose 126% and stood at Rs 386 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 441 billion as against Rs 352 billion during FY17, thereby witnessing a growth of 25%.

IIFL FINANCE Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	43,814	47,278	7.9
Current Liabilities	Rs m	155,893	208,860	34.0
Long-term Debt	Rs m	128,011	173,599	35.6
Total Liabilities	Rs m	352,229	441,035	25.2
Current assets	Rs m	181,475	54,877	-69.8
Fixed Assets	Rs m	170,707	386,158	126.2
Total Assets	Rs m	352,229	441,035	25.2

IIFL FINANCE Cash Flow Statement Analysis

• IIFL FINANCE's cash flow from operating activities (CFO) during FY18 stood at Rs -105 billion, an improvement of 142.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -4 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs 85 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -24 billion from the Rs 6 billion net cash flows seen during FY17.

IIFL FINANCE 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	-43,294	-104,835	-
Cash Flow from Investing Activities	Rs m	-41,648	-3,741	-
Cash Flow from Financing Activities	Rs m	90,936	84,682	-6.9%
Net Cash Flow	Rs m	5,993	-23,894	-

Current Valuations for IIFL FINANCE

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 32.2, an improvement from the EPS of Rs 25.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 703.6, stands at 34.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.6 times, while the price to sales ratio stands at 3.6 times.
• The company's price to cash flow (P/CF) ratio stood at 18.5 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	151.5	198.2
TTM Earnings per share	Rs	25.7	32.2
Diluted earnings per share	Rs	21.5	27.0
Price to Cash Flow	x	17.3	18.5
TTM P/E ratio	x	20.6	34.9
Price / Book Value ratio	x	2.2	4.3
Market Cap	Rs m	96,755	202,233
Dividends per share (Unadj.)	Rs	4.5	5.0

Ratio Analysis for IIFL FINANCE

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.3x during FY18, from 1.2x 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 1.5x during FY18, from 1.6x 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 21.7% during FY18, from 18.8% 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 declined and down at 18.9% during FY18, from 19.3% 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 8.5% during FY18, from 8.3% 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	1.2	0.3
Debtors’ Days	Days	40	17
Interest coverage	x	1.6	1.5
Debt to equity ratio	x	2.9	3.7
Return on assets	%	8.3	8.5
Return on equity	%	18.8	21.7
Return on capital employed	%	19.3	18.9

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

IIFL FINANCE Share Price Performance

Over the last one year, IIFL FINANCE share price has moved up from Rs 399.6 to Rs 703.6, registering a gain of Rs 304.0 or around 76.1%.

Overall, the S&P BSE SENSEX is up 12.1% over the year.

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

Read: Latest Annual Report Analysis of IIFL FINANCE