KEC INTERNATIONAL 2019-20 Annual Report Analysis

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KEC INTERNATIONAL 2019-20 Annual Report Analysis
Fri, 4 Dec

KEC INTERNATIONAL has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

KEC INTERNATIONAL Income Statement Analysis

  • Operating income during the year rose 8.8% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 7.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 10.3% in FY20 as against 10.5% in FY19.
  • Depreciation charges increased by 25.7% and finance costs decreased by 1.2% YoY, respectively.
  • Other income declined by 50.9% YoY.
  • Net profit for the year grew by 16.3% YoY.
  • Net profit margins during the year grew from 4.4% in FY19 to 4.7% in FY20.

KEC INTERNATIONAL Income Statement 2019-20

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Net Sales Rs m 110,005 119,654 8.8%
Other income Rs m 226 111 -50.9%
Total Revenues Rs m 110,231 119,765 8.6%
Gross profit Rs m 11,499 12,344 7.3%
Depreciation Rs m 1,171 1,472 25.7%
Interest Rs m 3,119 3,080 -1.2%
Profit before tax Rs m 7,435 7,903 6.3%
Tax Rs m 2,571 2,248 -12.6%
Profit after tax Rs m 4,864 5,655 16.3%
Gross profit margin % 10.5 10.3
Effective tax rate % 34.6 28.4
Net profit margin % 4.4 4.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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KEC INTERNATIONAL Balance Sheet Analysis

  • The company's current liabilities during FY20 stood at Rs 97 billion as compared to Rs 86 billion in FY19, thereby witnessing an increase of 13.7%.
  • Long-term debt down at Rs 2 billion as compared to Rs 5 billion during FY19, a fall of 71.8%.
  • Current assets rose 9% and stood at Rs 110 billion, while fixed assets rose 21% and stood at Rs 14 billion in FY20.
  • Overall, the total assets and liabilities for FY20 stood at Rs 129 billion as against Rs 117 billion during FY19, thereby witnessing a growth of 10%.

KEC INTERNATIONAL Balance Sheet as on March 2020

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Networth Rs m 24,351 27,976 14.9
 
Current Liabilities Rs m 85,547 97,237 13.7
Long-term Debt Rs m 5,411 1,527 -71.8
Total Liabilities Rs m 116,945 128,770 10.1
 
Current assets Rs m 101,511 110,211 8.6
Fixed Assets Rs m 11,897 14,357 20.7
Total Assets Rs m 116,945 128,770 10.1
* 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 FY20 stood at Rs 875 million on a YoY basis.
  • Cash flow from investing activities (CFI) during FY20 stood at Rs -1 billion, an improvement of 69.8% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY20 stood at Rs 25 million, an improvement of 102% on a YoY basis.
  • Overall, net cash flows for the company during FY20 stood at Rs -226 million from the Rs -178 million net cash flows seen during FY19.

KEC INTERNATIONAL Cash Flow Statement 2019-20

Particulars No. of months 12 12 % Change
Year Ending Mar-19 Mar-20
Cash Flow from Operating Activities Rs m 1,987 875 -56.0%
Cash Flow from Investing Activities Rs m -695 -1,179 -
Cash Flow from Financing Activities Rs m -1,499 25 -
Net Cash Flow Rs m -178 -226 -
* 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 22.0, an improvement from the EPS of Rs 18.9 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 364.1, stands at 17.0 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 0.6 times.
  • The company's price to cash flow (P/CF) ratio stood at 13.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Sales per share (Unadj.) Rs 427.9 465.4
TTM Earnings per share Rs 18.9 22.0
Diluted earnings per share Rs 18.9 22.0
Price to Cash Flow x 15.5 13.1
TTM P/E ratio x 17.0 17.0
Price / Book Value ratio x 3.6 2.4
Market Cap Rs m 93,594 93,597
Dividends per share (Unadj.) Rs 2.7 3.4
* 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 deteriorated and stood at 1.1x during FY20, from 1.2x during FY19. 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 3.6x during FY20, from 3.4x during FY19. 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 20.2% during FY20, from 20.0% during FY20. 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 37.2% during FY20, from 35.5% during FY19. 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 6.8% during FY20, from 6.8% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Current ratio x 1.2 1.1
Debtors’ Days Days 162 166
Interest coverage x 3.4 3.6
Debt to equity ratio x 0.2 0.1
Return on assets % 6.8 6.8
Return on equity % 20.0 20.2
Return on capital employed % 35.5 37.2
* 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 269.5 to Rs 364.1, registering a gain of Rs 94.6 or around 35.1%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 17,549.1 (up 0.7%). Over the last one year it has moved up from 16,937.3 to 17,549.1, a gain of 612 points (up 3.6%).

Overall, the S&P BSE SENSEX is up 10.0% over the year.

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

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