JK TYRE & IND 2017-18 Annual Report Analysis

Sat, 31 Mar

JK TYRE & IND 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.

JK TYRE & IND Income Statement Analysis

• Operating income during the year rose 17.2% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 39.6% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 8.8% in FY18 as against 17.0% in FY17.
• Depreciation charges increased by 2.8% and finance costs increased by 5.7% YoY, respectively.
• Other income grew by 123.3% YoY.
• Net profit for the year declined by 83.4% YoY.
• Net profit margins during the year declined from 5.4% in FY17 to 0.8% in FY18.

JK TYRE & IND Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	70,609	82,721	17.2%
Other income	Rs m	654	1,461	123.3%
Total Revenues	Rs m	71,263	84,182	18.1%
Gross profit	Rs m	12,015	7,257	-39.6%
Depreciation	Rs m	2,913	2,995	2.8%
Interest	Rs m	4,404	4,655	5.7%
Profit before tax	Rs m	5,352	1,068	-80.0%
Tax	Rs m	1,554	439	-71.8%
Profit after tax	Rs m	3,798	629	-83.4%
Gross profit margin	%	17.0	8.8
Effective tax rate	%	29.0	41.1
Net profit margin	%	5.4	0.8

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JK TYRE & IND Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 45 billion as compared to Rs 39 billion in FY17, thereby witnessing an increase of 15.9%.
• Long-term debt down at Rs 31 billion as compared to Rs 36 billion during FY17, a fall of 12.4%.
• Current assets fell 7% and stood at Rs 38 billion, while fixed assets rose 7% and stood at Rs 68 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 105 billion as against Rs 104 billion during FY17, thereby witnessing a growth of 1%.

JK TYRE & IND Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	19,648	19,611	-0.2
Current Liabilities	Rs m	38,666	44,816	15.9
Long-term Debt	Rs m	35,703	31,265	-12.4
Total Liabilities	Rs m	103,950	105,348	1.3
Current assets	Rs m	40,578	37,744	-7.0
Fixed Assets	Rs m	63,372	67,604	6.7
Total Assets	Rs m	103,950	105,348	1.3

JK TYRE & IND Cash Flow Statement Analysis

• JK TYRE & IND's cash flow from operating activities (CFO) during FY18 stood at Rs 6 billion, an improvement of 503.1% 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 -4 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -2 billion from the Rs 1 billion net cash flows seen during FY17.

JK TYRE & IND 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	1,057	6,374	503.1%
Cash Flow from Investing Activities	Rs m	-8,353	-3,945	-
Cash Flow from Financing Activities	Rs m	8,300	-4,086	-
Net Cash Flow	Rs m	1,283	-1,651	-

Current Valuations for JK TYRE & IND

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 2.8, an decline from the EPS of Rs 16.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 161.7, stands at 62.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.0 times, while the price to sales ratio stands at 0.4 times.
• The company's price to cash flow (P/CF) ratio stood at 10.0 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	311.3	364.7
TTM Earnings per share	Rs	16.7	2.8
Diluted earnings per share	Rs	15.4	2.6
Price to Cash Flow	x	4.8	10.0
TTM P/E ratio	x	8.5	62.9
Price / Book Value ratio	x	1.4	1.9
Market Cap	Rs m	27,320	36,398
Dividends per share (Unadj.)	Rs	2.5	1.5

Ratio Analysis for JK TYRE & IND

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.8x during FY18, from 1.0x 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 1.2x during FY18, from 2.2x 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 3.2% during FY18, from 19.3% 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 11.2% during FY18, from 17.6% 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 5.0% during FY18, from 7.9% 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	1.0	0.8
Debtors’ Days	Days	9	7
Interest coverage	x	2.2	1.2
Debt to equity ratio	x	1.8	1.6
Return on assets	%	7.9	5.0
Return on equity	%	19.3	3.2
Return on capital employed	%	17.6	11.2

To see how JK TYRE & IND has performed over the last 5 years, please visit here.

JK TYRE & IND Share Price Performance

Over the last one year, JK TYRE & IND share price has moved up from Rs 131.4 to Rs 161.7, registering a gain of Rs 30.3 or around 23.0%.

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

(To know more, check out historical annual results for JK TYRE & IND and quarterly results for JK TYRE & IND)

Read: Latest Annual Report Analysis of JK TYRE & IND