JAIN IRRIGATION 2017-18 Annual Report Analysis

Sat, 31 Mar

JAIN IRRIGATION 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.

JAIN IRRIGATION Income Statement Analysis

• Operating income during the year rose 18.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 1.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 12.2% in FY18 as against 14.2% in FY17.
• Depreciation charges increased by 12.3% and finance costs increased by 4.2% YoY, respectively.
• Other income grew by 162.8% YoY.
• Net profit for the year grew by 25.1% YoY.
• Net profit margins during the year grew from 2.6% in FY17 to 2.8% in FY18.

JAIN IRRIGATION Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	66,002	77,909	18.0%
Other income	Rs m	612	1,608	162.8%
Total Revenues	Rs m	66,615	79,518	19.4%
Gross profit	Rs m	9,402	9,519	1.2%
Depreciation	Rs m	3,014	3,386	12.3%
Interest	Rs m	4,594	4,786	4.2%
Profit before tax	Rs m	2,407	2,956	22.8%
Tax	Rs m	667	779	16.7%
Profit after tax	Rs m	1,740	2,177	25.1%
Gross profit margin	%	14.2	12.2
Effective tax rate	%	27.7	26.4
Net profit margin	%	2.6	2.8

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JAIN IRRIGATION Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 46 billion as compared to Rs 41 billion in FY17, thereby witnessing an increase of 12.7%.
• Long-term debt stood at Rs 26 billion as compared to Rs 22 billion during FY17, a growth of 19.3%.
• Current assets rose 11% and stood at Rs 64 billion, while fixed assets rose 10% and stood at Rs 58 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 122 billion as against Rs 110 billion during FY17, thereby witnessing a growth of 10%.

JAIN IRRIGATION Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	41,578	43,511	4.6
Current Liabilities	Rs m	40,538	45,673	12.7
Long-term Debt	Rs m	22,199	26,489	19.3
Total Liabilities	Rs m	110,066	121,520	10.4
Current assets	Rs m	57,798	63,899	10.6
Fixed Assets	Rs m	52,268	57,621	10.2
Total Assets	Rs m	110,066	121,520	10.4

JAIN IRRIGATION Cash Flow Statement Analysis

• JAIN IRRIGATION's cash flow from operating activities (CFO) during FY18 stood at Rs 13 billion, an improvement of 94.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -11 billion, an improvement of 154.2% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -2 billion, an improvement of 68% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 858 million from the Rs -3 billion net cash flows seen during FY17.

JAIN IRRIGATION 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	6,738	13,126	94.8%
Cash Flow from Investing Activities	Rs m	-4,169	-10,597	-
Cash Flow from Financing Activities	Rs m	-5,200	-1,672	-
Net Cash Flow	Rs m	-2,631	858	-

Current Valuations for JAIN IRRIGATION

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 4.2, an improvement from the EPS of Rs 3.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 106.6, stands at 29.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.5 times, while the price to sales ratio stands at 0.7 times.
• The company's price to cash flow (P/CF) ratio stood at 10.8 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	137.7	151.1
TTM Earnings per share	Rs	3.6	4.2
Diluted earnings per share	Rs	2.9	3.7
Price to Cash Flow	x	11.7	10.8
TTM P/E ratio	x	32.7	29.0
Price / Book Value ratio	x	1.0	1.4
Market Cap	Rs m	40,023	60,126
Dividends per share (Unadj.)	Rs	0.8	1.0

Ratio Analysis for JAIN IRRIGATION

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.4x during FY18, from 1.4x 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 1.6x during FY18, from 1.5x 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 improved and stood at 5.0% during FY18, from 4.2% 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 improved and stood at 11.1% during FY18, from 11.0% 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 5.7% during FY18, from 5.8% 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	1.4	1.4
Debtors’ Days	Days	126	118
Interest coverage	x	1.5	1.6
Debt to equity ratio	x	0.5	0.6
Return on assets	%	5.8	5.7
Return on equity	%	4.2	5.0
Return on capital employed	%	11.0	11.1

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

JAIN IRRIGATION Share Price Performance

Over the last one year, JAIN IRRIGATION share price has moved up from Rs 93.8 to Rs 106.6, registering a gain of Rs 12.8 or around 13.6%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 18,476.7 (down 0.1%). Over the last one year it has moved up from 16,446.0 to 18,476.7, a gain of 2,031 points (up 12.3%).

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

(To know more, check out historical annual results for JAIN IRRIGATION and quarterly results for JAIN IRRIGATION)

Read: Latest Annual Report Analysis of JAIN IRRIGATION