KEC INTERNATIONAL 2017-18 Annual Report Analysis

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KEC INTERNATIONAL 2017-18 Annual Report Analysis
Thu, 20 Dec

KEC INTERNATIONAL 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.

KEC INTERNATIONAL Income Statement Analysis

  • Operating income during the year rose 17.2% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 23.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 10.0% in FY18 as against 9.5% in FY17.
  • Depreciation charges decreased by 15.4% and finance costs decreased by 2.8% YoY, respectively.
  • Other income grew by 40.0% YoY.
  • Net profit for the year grew by 51.1% YoY.
  • Net profit margins during the year grew from 3.5% in FY17 to 4.6% in FY18.

KEC INTERNATIONAL Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 85,844 100,580 17.2%
Other income Rs m 289 404 40.0%
Total Revenues Rs m 86,133 100,984 17.2%
Gross profit Rs m 8,179 10,062 23.0%
Depreciation Rs m 1,297 1,097 -15.4%
Interest Rs m 2,536 2,466 -2.8%
Profit before tax Rs m 4,634 6,902 48.9%
Tax Rs m 1,587 2,298 44.8%
Profit after tax Rs m 3,048 4,604 51.1%
Gross profit margin % 9.5 10.0
Effective tax rate % 34.2 33.3
Net profit margin % 3.5 4.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



KEC INTERNATIONAL Balance Sheet Analysis

  • The company's current liabilities during FY18 stood at Rs 77 billion as compared to Rs 62 billion in FY17, thereby witnessing an increase of 23.2%.
  • Long-term debt down at Rs 7 billion as compared to Rs 8 billion during FY17, a fall of 4.8%.
  • Current assets rose 25% and stood at Rs 88 billion, while fixed assets rose 3% and stood at Rs 12 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 105 billion as against Rs 87 billion during FY17, thereby witnessing a growth of 21%.

KEC INTERNATIONAL Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 15,864 19,975 25.9
 
Current Liabilities Rs m 62,142 76,582 23.2
Long-term Debt Rs m 7,757 7,384 -4.8
Total Liabilities Rs m 87,281 105,390 20.7
 
Current assets Rs m 70,542 88,388 25.3
Fixed Assets Rs m 11,539 11,903 3.2
Total Assets Rs m 87,281 105,390 20.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



KEC INTERNATIONAL Cash Flow Statement Analysis

  • KEC INTERNATIONAL's cash flow from operating activities (CFO) during FY18 stood at Rs 7 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -45 million on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -6 billion, an improvement of 54% on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs 175 million from the Rs 1 billion net cash flows seen during FY17.

KEC INTERNATIONAL 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 16,616 6,596 -60.3%
Cash Flow from Investing Activities Rs m -1,831 -45 -
Cash Flow from Financing Activities Rs m -13,790 -6,382 -
Net Cash Flow Rs m 1,010 175 -82.7%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for KEC INTERNATIONAL

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 17.9, an improvement from the EPS of Rs 11.9 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 309.0, stands at 16.2 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 4.1 times, while the price to sales ratio stands at 0.8 times.
  • The company's price to cash flow (P/CF) ratio stood at 13.9 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 333.9 391.2
TTM Earnings per share Rs 11.9 17.9
Diluted earnings per share Rs 11.9 17.9
Price to Cash Flow x 18.3 13.9
TTM P/E ratio x 16.2 16.2
Price / Book Value ratio x 2.6 4.1
Market Cap Rs m 79,428 79,431
Dividends per share (Unadj.) Rs 1.6 2.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for KEC INTERNATIONAL

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 1.2x during FY18, from 1.1x 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 3.8x during FY18, from 2.8x 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 23.1% during FY18, from 19.2% 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 34.2% during FY18, from 30.4% 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 6.7% during FY18, from 6.4% 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 1.1 1.2
Debtors’ Days Days 179 183
Interest coverage x 2.8 3.8
Debt to equity ratio x 0.5 0.4
Return on assets % 6.4 6.7
Return on equity % 19.2 23.1
Return on capital employed % 30.4 34.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



To see how KEC INTERNATIONAL has performed over the last 5 years, please visit here.

KEC INTERNATIONAL Share Price Performance

Over the last one year, KEC INTERNATIONAL share price has moved up from Rs 368.9 to Rs 309.0, registering a loss of Rs 59.9 or around 16.2%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 18,794.4 (down 0.0%). Over the last one year it has moved up from 18,684.3 to 18,794.4, a gain of 110 points (up 0.6%).

Overall, the S&P BSE SENSEX is up 7.4% over the year.

(To know more, check out historical annual results for KEC INTERNATIONAL and quarterly results for KEC INTERNATIONAL)

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