ISMT 2017-18 Annual Report Analysis

Sat, 31 Mar

ISMT 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.

ISMT Income Statement Analysis

• Operating income during the year rose 29.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 84.5% YoY during the fiscal. Operating profit margins witnessed a fall and down at 5.4% in FY18 as against 3.8% in FY17.
• Depreciation charges decreased by 7.3% and finance costs increased by 2.3% YoY, respectively.
• Other income grew by 9.7% YoY.
• Net profit for the year declined by 13.8% YoY.
• Net profit margins during the year grew from 23.4% in FY17 to 15.6% in FY18.

ISMT Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	12,037	15,579	29.4%
Other income	Rs m	96	105	9.7%
Total Revenues	Rs m	12,133	15,684	29.3%
Gross profit	Rs m	453	837	84.5%
Depreciation	Rs m	663	614	-7.3%
Interest	Rs m	2,704	2,766	2.3%
Profit before tax	Rs m	-2,817	-2,438	-13.5%
Tax	Rs m	0	-10	-10,000.0%
Profit after tax	Rs m	-2,818	-2,428	-13.8%
Gross profit margin	%	3.8	5.4
Effective tax rate	%	0.0	0.4
Net profit margin	%	-23.4	-15.6

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ISMT Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 27 billion as compared to Rs 23 billion in FY17, thereby witnessing an increase of 16.1%.
• Long-term debt down at Rs 4 billion as compared to Rs 6 billion during FY17, a fall of 35.9%.
• Current assets rose 32% and stood at Rs 11 billion, while fixed assets fell 22% and stood at Rs 13 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 24 billion as against Rs 25 billion during FY17, thereby witnessing a fall of 4%.

ISMT Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	-4,047	-6,460	59.6
Current Liabilities	Rs m	22,939	26,622	16.1
Long-term Debt	Rs m	6,282	4,029	-35.9
Total Liabilities	Rs m	24,541	23,513	-4.2
Current assets	Rs m	7,987	10,571	32.4
Fixed Assets	Rs m	16,538	12,920	-21.9
Total Assets	Rs m	24,541	23,513	-4.2

ISMT Cash Flow Statement Analysis

• ISMT's cash flow from operating activities (CFO) during FY18 stood at Rs 312 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -11 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -134 million, an improvement of 71% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 168 million from the Rs -1 billion net cash flows seen during FY17.

ISMT 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	-712	312	-
Cash Flow from Investing Activities	Rs m	-73	-11	-
Cash Flow from Financing Activities	Rs m	-456	-134	-
Net Cash Flow	Rs m	-1,242	168	-

Current Valuations for ISMT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -16.6, an improvement from the EPS of Rs -19.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 9.1, stands at -1.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at -0.4 times, while the price to sales ratio stands at 0.1 times.
• The company's price to cash flow (P/CF) ratio stood at -1.1 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	82.2	106.3
TTM Earnings per share	Rs	-19.2	-16.6
Diluted earnings per share	Rs	-9.4	-8.1
Price to Cash Flow	x	-1.7	-1.1
TTM P/E ratio	x	-1.3	-1.1
Price / Book Value ratio	x	-0.4	-0.3
Market Cap	Rs m	1,614	2,077
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for ISMT

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.4x during FY18, from 0.3x 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 improved and stood at 0.1x during FY18, from 0.0x 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 37.6% during FY18, from 69.6% 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 -13.5% during FY18, from -5.1% 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 improved and stood at 1.4% during FY18, from -0.5% 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	0.3	0.4
Debtors’ Days	Days	6	5
Interest coverage	x	0.0	0.1
Debt to equity ratio	x	-1.6	-0.6
Return on assets	%	-0.5	1.4
Return on equity	%	69.6	37.6
Return on capital employed	%	-5.1	-13.5

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

ISMT Share Price Performance

Over the last one year, ISMT share price has moved down from Rs 12.5 to Rs 9.1, registering a loss of Rs 3.5 or around 27.8%.

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 ISMT and quarterly results for ISMT)

Read: Latest Annual Report Analysis of ISMT