KEC INTERNATIONAL 2018-19 Annual Report Analysis

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KEC INTERNATIONAL 2018-19 Annual Report Analysis
Thu, 19 Sep

KEC INTERNATIONAL 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.

KEC INTERNATIONAL Income Statement Analysis

  • Operating income during the year rose 9.4% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 14.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 10.5% in FY19 as against 10.0% in FY18.
  • Depreciation charges increased by 6.7% and finance costs increased by 36.0% YoY, respectively.
  • Other income grew by 9.1% YoY.
  • Net profit for the year grew by 6.1% YoY.
  • Net profit margins during the year declined from 4.5% in FY18 to 4.4% in FY19.

KEC INTERNATIONAL Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 100,526 110,005 9.4%
Other income Rs m 207 226 9.1%
Total Revenues Rs m 100,733 110,231 9.4%
Gross profit Rs m 10,057 11,499 14.3%
Depreciation Rs m 1,097 1,171 6.7%
Interest Rs m 2,294 3,119 36.0%
Profit before tax Rs m 6,873 7,435 8.2%
Tax Rs m 2,290 2,571 12.3%
Profit after tax Rs m 4,583 4,864 6.1%
Gross profit margin % 10.0 10.5
Effective tax rate % 33.3 34.6
Net profit margin % 4.5 4.4
* 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 FY19 stood at Rs 86 billion as compared to Rs 77 billion in FY18, thereby witnessing an increase of 11.7%.
  • Long-term debt down at Rs 5 billion as compared to Rs 7 billion during FY18, a fall of 26.7%.
  • Current assets rose 15% and stood at Rs 102 billion, while fixed assets fell 0% and stood at Rs 12 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 117 billion as against Rs 105 billion during FY18, thereby witnessing a growth of 11%.

KEC INTERNATIONAL Balance Sheet as on March 2019

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 19,975 24,351 21.9
 
Current Liabilities Rs m 76,582 85,547 11.7
Long-term Debt Rs m 7,384 5,411 -26.7
Total Liabilities Rs m 105,390 116,945 11.0
 
Current assets Rs m 88,388 101,511 14.8
Fixed Assets Rs m 11,903 11,897 0.0
Total Assets Rs m 105,390 116,945 11.0
* 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 FY19 stood at Rs 2 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs -695 million, an improvement of 1,457.2% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY19 stood at Rs -1 billion, an improvement of 77% on a YoY basis.
  • Overall, net cash flows for the company during FY19 stood at Rs -178 million from the Rs 175 million net cash flows seen during FY18.

KEC INTERNATIONAL 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 6,596 1,987 -69.9%
Cash Flow from Investing Activities Rs m -45 -695 -
Cash Flow from Financing Activities Rs m -6,382 -1,499 -
Net Cash Flow Rs m 175 -178 -
* 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 18.9, an improvement from the EPS of Rs 17.8 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 248.7, stands at 13.1 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 3.6 times, while the price to sales ratio stands at 0.8 times.
  • The company's price to cash flow (P/CF) ratio stood at 10.6 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 391.0 427.9
TTM Earnings per share Rs 17.8 18.9
Diluted earnings per share Rs 17.8 18.9
Price to Cash Flow x 11.3 10.6
TTM P/E ratio x 13.1 13.1
Price / Book Value ratio x 4.1 3.6
Market Cap Rs m 63,925 63,928
Dividends per share (Unadj.) Rs 2.4 2.7
* 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 FY19, from 1.2x 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 deteriorated and stood at 3.4x during FY19, from 4.0x 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 20.0% during FY19, from 22.9% 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 35.5% during FY19, from 33.5% 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 improved and stood at 6.8% during FY19, from 6.5% 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 1.2 1.2
Debtors’ Days Days 183 162
Interest coverage x 4.0 3.4
Debt to equity ratio x 0.4 0.2
Return on assets % 6.5 6.8
Return on equity % 22.9 20.0
Return on capital employed % 33.5 35.5
* 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 down from Rs 307.1 to Rs 248.7, registering a loss of Rs 58.5 or around 19.0%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 16,786.8 (down 1.0%). Over the last one year it has moved down from 18,168.6 to 16,786.8, a loss of 1,382 points (down 7.6%).

Overall, the S&P BSE SENSEX is down 2.7% over the year.

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

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