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JINDAL STEEL & POWER 2018-19 Annual Report Analysis

Sun, 31 Mar

JINDAL STEEL & POWER 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.

JINDAL STEEL & POWER Income Statement Analysis

• Operating income during the year rose 31.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 16.9% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 19.5% in FY19 as against 21.8% in FY18.
• Depreciation charges increased by 41.1% and finance costs increased by 7.6% YoY, respectively.
• Other income declined by 12.8% YoY.
• Net profit for the year grew by 48.5% YoY.
• Net profit margins during the year declined from 6.0% in FY18 to 6.8% in FY19.

JINDAL STEEL & POWER Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	269,255	352,892	31.1%
Other income	Rs m	1,968	1,716	-12.8%
Total Revenues	Rs m	271,223	354,608	30.7%
Gross profit	Rs m	58,818	68,753	16.9%
Depreciation	Rs m	38,830	54,804	41.1%
Interest	Rs m	40,595	43,682	7.6%
Profit before tax	Rs m	-18,641	-28,017	50.3%
Tax	Rs m	-2,398	-3,902	62.7%
Profit after tax	Rs m	-16,242	-24,115	48.5%
Gross profit margin	%	21.8	19.5
Effective tax rate	%	12.9	13.9
Net profit margin	%	-6.0	-6.8

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JINDAL STEEL & POWER Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 244 billion as compared to Rs 229 billion in FY18, thereby witnessing an increase of 6.3%.
• Long-term debt down at Rs 299 billion as compared to Rs 330 billion during FY18, a fall of 9.2%.
• Current assets fell 3% and stood at Rs 173 billion, while fixed assets fell 0% and stood at Rs 747 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 920 billion as against Rs 927 billion during FY18, thereby witnessing a fall of 1%.

JINDAL STEEL & POWER Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	303,626	320,381	5.5
Current Liabilities	Rs m	229,094	243,564	6.3
Long-term Debt	Rs m	329,559	299,402	-9.2
Total Liabilities	Rs m	926,867	919,703	-0.8
Current assets	Rs m	177,693	172,795	-2.8
Fixed Assets	Rs m	749,174	746,908	-0.3
Total Assets	Rs m	926,867	919,703	-0.8

JINDAL STEEL & POWER Cash Flow Statement Analysis

• JINDAL STEEL & POWER's cash flow from operating activities (CFO) during FY19 stood at Rs 90 billion, an improvement of 16.9% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -8 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -83 billion on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -666 million from the Rs 174 million net cash flows seen during FY18.

JINDAL STEEL & POWER 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	77,243	90,269	16.9%
Cash Flow from Investing Activities	Rs m	-14,312	-8,321	-
Cash Flow from Financing Activities	Rs m	-62,756	-82,614	-
Net Cash Flow	Rs m	174	-666	-

Current Valuations for JINDAL STEEL & POWER

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -24.9, an decline from the EPS of Rs -16.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 179.6, stands at -7.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.6 times, while the price to sales ratio stands at 0.5 times.
• The company's price to cash flow (P/CF) ratio stood at 6.1 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	278.2	364.6
TTM Earnings per share	Rs	-16.8	-24.9
Diluted earnings per share	Rs	-15.9	-23.6
Price to Cash Flow	x	9.9	6.1
TTM P/E ratio	x	-22.8	-7.6
Price / Book Value ratio	x	0.6	0.6
Market Cap	Rs m	192,210	187,927
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for JINDAL STEEL & POWER

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.7x 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 deteriorated and stood at 0.4x during FY19, from 0.5x 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 declined and down at -7.5% during FY19, from -5.3% 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 2.5% during FY19, from 3.5% 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 declined and down at 2.1% during FY19, from 2.6% 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	0.7
Debtors’ Days	Days	2	3
Interest coverage	x	0.5	0.4
Debt to equity ratio	x	1.1	0.9
Return on assets	%	2.6	2.1
Return on equity	%	-5.3	-7.5
Return on capital employed	%	3.5	2.5

To see how JINDAL STEEL & POWER has performed over the last 5 years, please visit here.

JINDAL STEEL & POWER Share Price Performance

Over the last one year, JINDAL STEEL & POWER share price has moved down from Rs 219.3 to Rs 179.6, registering a loss of Rs 39.8 or around 18.1%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 11,355.1 (up 2.3%). Over the last one year it has moved down from 13,322.0 to 11,355.1, a loss of 1,967 points (down 14.8%).

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

(To know more, check out historical annual results for JINDAL STEEL & POWER and quarterly results for JINDAL STEEL & POWER)

Read: Latest Annual Report Analysis of JINDAL STEEL & POWER