JSW STEEL 2018-19 Annual Report Analysis

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JSW STEEL 2018-19 Annual Report Analysis
Mon, 8 Jul

JSW STEEL 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.

JSW STEEL Income Statement Analysis

  • Operating income during the year rose 17.8% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 28.1% YoY during the fiscal. Operating profit margins witnessed a fall and down at 22.4% in FY19 as against 20.6% in FY18.
  • Depreciation charges increased by 19.3% and finance costs increased by 5.8% YoY, respectively.
  • Other income grew by 22.2% YoY.
  • Net profit for the year grew by 23.1% YoY.
  • Net profit margins during the year grew from 8.5% in FY18 to 8.9% in FY19.

JSW STEEL Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 719,330 847,570 17.8%
Other income Rs m 1,670 2,040 22.2%
Total Revenues Rs m 721,000 849,610 17.8%
Gross profit Rs m 147,940 189,520 28.1%
Depreciation Rs m 33,870 40,410 19.3%
Interest Rs m 37,010 39,170 5.8%
Profit before tax Rs m 78,730 111,980 42.2%
Tax Rs m 15,380 36,440 136.9%
Profit after tax Rs m 61,130 75,240 23.1%
Gross profit margin % 20.6 22.4
Effective tax rate % 19.5 32.5
Net profit margin % 8.5 8.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



JSW STEEL Balance Sheet Analysis

  • The company's current liabilities during FY19 stood at Rs 420 billion as compared to Rs 290 billion in FY18, thereby witnessing an increase of 45.0%.
  • Long-term debt down at Rs 297 billion as compared to Rs 317 billion during FY18, a fall of 6.5%.
  • Current assets rose 45% and stood at Rs 336 billion, while fixed assets rose 17% and stood at Rs 752 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 1,149 billion as against Rs 920 billion during FY18, thereby witnessing a growth of 25%.

JSW STEEL Balance Sheet as on March 2019

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 279,980 347,950 24.3
 
Current Liabilities Rs m 289,640 420,080 45.0
Long-term Debt Rs m 317,230 296,560 -6.5
Total Liabilities Rs m 920,180 1,149,140 24.9
 
Current assets Rs m 231,920 335,550 44.7
Fixed Assets Rs m 641,580 751,610 17.1
Total Assets Rs m 920,180 1,149,140 24.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



JSW STEEL Cash Flow Statement Analysis

  • JSW STEEL's cash flow from operating activities (CFO) during FY19 stood at Rs 146 billion, an improvement of 18.2% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs -114 billion, an improvement of 152.8% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY19 stood at Rs 18 billion, an improvement of 121% on a YoY basis.
  • Overall, net cash flows for the company during FY19 stood at Rs 50 billion from the Rs -3 billion net cash flows seen during FY18.

JSW STEEL 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 123,790 146,330 18.2%
Cash Flow from Investing Activities Rs m -45,290 -114,480 -
Cash Flow from Financing Activities Rs m -81,850 17,530 -
Net Cash Flow Rs m -3,346 49,990 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for JSW STEEL

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 31.3, an decline from the EPS of Rs 252.9 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 265.3, stands at 8.5 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.4 times, while the price to sales ratio stands at 1.0 times.
  • The company's price to cash flow (P/CF) ratio stood at 5.5 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 2,975.9 352.9
TTM Earnings per share Rs 252.9 31.3
Diluted earnings per share Rs 25.3 31.1
Price to Cash Flow x 0.7 5.5
TTM P/E ratio x 0.8 8.5
Price / Book Value ratio x 0.2 2.4
Market Cap Rs m 64,116 641,162
Dividends per share (Unadj.) Rs 3.2 4.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for JSW STEEL

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 0.8x 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 improved and stood at 3.9x during FY19, from 3.1x 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 21.6% during FY19, from 21.8% 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 improved and stood at 23.4% during FY19, from 19.0% 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 10.0% during FY19, from 10.7% 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 0.8
Debtors’ Days Days 24 31
Interest coverage x 3.1 3.9
Debt to equity ratio x 1.1 0.9
Return on assets % 10.7 10.0
Return on equity % 21.8 21.6
Return on capital employed % 19.0 23.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

JSW STEEL Share Price Performance

Over the last one year, JSW STEEL share price has moved up from Rs 309.3 to Rs 265.3, registering a loss of Rs 44.1 or around 14.2%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 10,589.4 (down 0.1%). Over the last one year it has moved down from 12,620.3 to 10,589.4, a loss of 2,031 points (down 16.1%).

Overall, the S&P BSE SENSEX is up 9.9% over the year.

(To know more, check out historical annual results for JSW STEEL and quarterly results for JSW STEEL)

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Related Views on News

JSW STEEL Announces Quarterly Results (4QFY20); Net Profit Down 85.8% (Quarterly Result Update)

May 27, 2020 | Updated on May 27, 2020

For the quarter ended March 2020, JSW STEEL has posted a net profit of Rs 2 bn (down 85.8% YoY). Sales on the other hand came in at Rs 179 bn (down 20.0% YoY). Read on for a complete analysis of JSW STEEL's quarterly results.

JSW STEEL Announces Quarterly Results (3QFY20); Net Profit Down 86.8% (Quarterly Result Update)

Jan 27, 2020 | Updated on Jan 27, 2020

For the quarter ended December 2019, JSW STEEL has posted a net profit of Rs 2 bn (down 86.8% YoY). Sales on the other hand came in at Rs 181 bn (down 11.1% YoY). Read on for a complete analysis of JSW STEEL's quarterly results.

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