NATIONAL FITTINGS 2017-18 Annual Report Analysis

Sat, 31 Mar

NATIONAL FITTINGS 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.

NATIONAL FITTINGS Income Statement Analysis

• Operating income during the year fell 7.8% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 11.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 22.4% in FY18 as against 23.1% in FY17.
• Depreciation charges increased by 155.7% and finance costs increased by 72.5% YoY, respectively.
• Other income grew by 12.6% YoY.
• Net profit for the year declined by 23.6% YoY.
• Net profit margins during the year declined from 15.1% in FY17 to 12.5% in FY18.

NATIONAL FITTINGS Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	672	619	-7.8%
Other income	Rs m	24	27	12.6%
Total Revenues	Rs m	696	647	-7.1%
Gross profit	Rs m	155	138	-11.0%
Depreciation	Rs m	11	27	155.7%
Interest	Rs m	10	17	72.5%
Profit before tax	Rs m	160	122	-23.4%
Tax	Rs m	58	45	-23.2%
Profit after tax	Rs m	101	78	-23.6%
Gross profit margin	%	23.1	22.4
Effective tax rate	%	36.4	36.6
Net profit margin	%	15.1	12.5

Revealing on April 30: Are You Ready for the Upcoming Election Surprise?

NATIONAL FITTINGS Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 218 million as compared to Rs 112 million in FY17, thereby witnessing an increase of 94.5%.
• Long-term debt stood at Rs 91 million as compared to Rs 0 million during FY17, a fall of 0.0%.
• Current assets rose 27% and stood at Rs 359 million, while fixed assets rose 296% and stood at Rs 443 million in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 802 million as against Rs 395 million during FY17, thereby witnessing a growth of 103%.

NATIONAL FITTINGS Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	277	472	70.1
Current Liabilities	Rs m	112	218	94.5
Long-term Debt	Rs m	0	91	0.0
Total Liabilities	Rs m	395	802	103.1
Current assets	Rs m	283	359	27.0
Fixed Assets	Rs m	112	443	295.9
Total Assets	Rs m	395	802	103.1

NATIONAL FITTINGS Cash Flow Statement Analysis

• NATIONAL FITTINGS's cash flow from operating activities (CFO) during FY18 stood at Rs 90 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -67 million, an improvement of 28.8% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -7 million, an improvement of 85% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 33 million from the Rs 23 million net cash flows seen during FY17.

NATIONAL FITTINGS 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	125	90	-28.5%
Cash Flow from Investing Activities	Rs m	-52	-67	-
Cash Flow from Financing Activities	Rs m	-50	-7	-
Net Cash Flow	Rs m	23	33	46.3%

Current Valuations for NATIONAL FITTINGS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 8.5, an decline from the EPS of Rs 12.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 201.8, stands at 24.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.9 times, while the price to sales ratio stands at 3.0 times.
• The company's price to cash flow (P/CF) ratio stood at 20.7 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	80.7	68.2
TTM Earnings per share	Rs	12.2	8.5
Diluted earnings per share	Rs	11.2	8.5
Price to Cash Flow	x	19.4	20.7
TTM P/E ratio	x	21.4	24.7
Price / Book Value ratio	x	5.3	4.6
Market Cap	Rs m	1,468	2,157
Dividends per share (Unadj.)	Rs	4.0	0.0

Ratio Analysis for NATIONAL FITTINGS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.6x during FY18, from 2.5x 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 8.3x during FY18, from 17.4x 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 declined and down at 16.4% during FY18, from 36.6% 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 24.7% during FY18, from 61.1% 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 declined and down at 11.8% during FY18, from 28.2% 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	2.5	1.6
Debtors’ Days	Days	14,363,541	17,714,588
Interest coverage	x	17.4	8.3
Debt to equity ratio	x	0.0	0.2
Return on assets	%	28.2	11.8
Return on equity	%	36.6	16.4
Return on capital employed	%	61.1	24.7

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

NATIONAL FITTINGS Share Price Performance

Over the last one year, NATIONAL FITTINGS share price has moved down from Rs 238.7 to Rs 201.8, registering a loss of Rs 36.9 or around 15.4%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 13,322.0 (down 2.0%). Over the last one year it has moved up from 11,804.5 to 13,322.0, a gain of 1,518 points (up 12.9%).

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

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

Read: Latest Annual Report Analysis of NATIONAL FITTINGS