KANORIA CHEMICALS 2017-18 Annual Report Analysis

Sat, 31 Mar

KANORIA CHEMICALS 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.

KANORIA CHEMICALS Income Statement Analysis

• Operating income during the year rose 23.6% on a year-on-year (YoY) basis.
• The company's operating profit increased by 336.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 4.2% in FY18 as against 1.2% in FY17.
• Depreciation charges increased by 2.5% and finance costs increased by 17.8% YoY, respectively.
• Other income grew by 74.3% YoY.
• Net profit for the year declined by 148.8% YoY.
• Net profit margins during the year grew from 3.5% in FY17 to 1.4% in FY18.

KANORIA CHEMICALS Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	6,703	8,287	23.6%
Other income	Rs m	261	454	74.3%
Total Revenues	Rs m	6,964	8,741	25.5%
Gross profit	Rs m	79	346	336.7%
Depreciation	Rs m	455	466	2.5%
Interest	Rs m	202	238	17.8%
Profit before tax	Rs m	-317	96	-130.4%
Tax	Rs m	-80	-19	-75.8%
Profit after tax	Rs m	-237	116	-148.8%
Gross profit margin	%	1.2	4.2
Effective tax rate	%	25.2	-20.0
Net profit margin	%	-3.5	1.4

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KANORIA CHEMICALS Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 4 billion as compared to Rs 3 billion in FY17, thereby witnessing an increase of 25.6%.
• Long-term debt down at Rs 3 billion as compared to Rs 3 billion during FY17, a fall of 2.3%.
• Current assets rose 17% and stood at Rs 4 billion, while fixed assets rose 1% and stood at Rs 9 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 13 billion as against Rs 12 billion during FY17, thereby witnessing a growth of 6%.

KANORIA CHEMICALS Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	5,801	5,879	1.4
Current Liabilities	Rs m	2,906	3,651	25.6
Long-term Debt	Rs m	2,656	2,595	-2.3
Total Liabilities	Rs m	12,095	12,778	5.6
Current assets	Rs m	3,379	3,951	16.9
Fixed Assets	Rs m	8,715	8,827	1.3
Total Assets	Rs m	12,095	12,778	5.6

KANORIA CHEMICALS Cash Flow Statement Analysis

• KANORIA CHEMICALS's cash flow from operating activities (CFO) during FY18 stood at Rs 269 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -207 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -110 million, an improvement of 72% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -48 million from the Rs -24 million net cash flows seen during FY17.

KANORIA CHEMICALS 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	300	269	-10.6%
Cash Flow from Investing Activities	Rs m	65	-207	-
Cash Flow from Financing Activities	Rs m	-390	-110	-
Net Cash Flow	Rs m	-24	-48	-

Current Valuations for KANORIA CHEMICALS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 2.6, an improvement from the EPS of Rs -5.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 65.7, stands at 50.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.5 times, while the price to sales ratio stands at 0.3 times.
• The company's price to cash flow (P/CF) ratio stood at 6.6 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	153.4	189.7
TTM Earnings per share	Rs	-5.4	2.6
Diluted earnings per share	Rs	-5.4	2.6
Price to Cash Flow	x	14.0	6.6
TTM P/E ratio	x	38.8	50.2
Price / Book Value ratio	x	0.6	0.7
Market Cap	Rs m	3,201	3,845
Dividends per share (Unadj.)	Rs	1.5	1.5

Ratio Analysis for KANORIA CHEMICALS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.1x during FY18, from 1.2x 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 1.4x during FY18, from -0.6x 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 2.0% during FY18, from -4.1% 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 3.9% during FY18, from -1.4% 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 2.8% during FY18, from -0.3% 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	1.2	1.1
Debtors’ Days	Days	62	61
Interest coverage	x	-0.6	1.4
Debt to equity ratio	x	0.5	0.4
Return on assets	%	-0.3	2.8
Return on equity	%	-4.1	2.0
Return on capital employed	%	-1.4	3.9

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

KANORIA CHEMICALS Share Price Performance

Over the last one year, KANORIA CHEMICALS share price has moved down from Rs 69.6 to Rs 65.7, registering a loss of Rs 3.9 or around 5.6%.

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

(To know more, check out historical annual results for KANORIA CHEMICALS and quarterly results for KANORIA CHEMICALS)

Read: Latest Annual Report Analysis of KANORIA CHEMICALS