KEI INDUSTRIES 2017-18 Annual Report Analysis

Sat, 31 Mar

KEI INDUSTRIES 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.

KEI INDUSTRIES Income Statement Analysis

• Operating income during the year rose 41.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 26.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 9.9% in FY18 as against 11.1% in FY17.
• Depreciation charges increased by 13.5% and finance costs decreased by 10.1% YoY, respectively.
• Other income declined by 7.6% YoY.
• Net profit for the year grew by 54.3% YoY.
• Net profit margins during the year grew from 3.9% in FY17 to 4.2% in FY18.

KEI INDUSTRIES Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	24,245	34,279	41.4%
Other income	Rs m	101	93	-7.6%
Total Revenues	Rs m	24,346	34,372	41.2%
Gross profit	Rs m	2,690	3,393	26.1%
Depreciation	Rs m	284	322	13.5%
Interest	Rs m	1,244	1,119	-10.1%
Profit before tax	Rs m	1,262	2,045	62.0%
Tax	Rs m	324	597	84.1%
Profit after tax	Rs m	938	1,448	54.3%
Gross profit margin	%	11.1	9.9
Effective tax rate	%	25.7	29.2
Net profit margin	%	3.9	4.2

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KEI INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 15 billion as compared to Rs 14 billion in FY17, thereby witnessing an increase of 9.6%.
• Long-term debt stood at Rs 1 billion as compared to Rs 764 million during FY17, a growth of 90.8%.
• Current assets rose 21% and stood at Rs 18 billion, while fixed assets rose 7% and stood at Rs 4 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 23 billion as against Rs 19 billion during FY17, thereby witnessing a growth of 18%.

KEI INDUSTRIES Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	4,545	5,988	31.8
Current Liabilities	Rs m	13,574	14,880	9.6
Long-term Debt	Rs m	764	1,457	90.8
Total Liabilities	Rs m	19,352	22,848	18.1
Current assets	Rs m	15,156	18,356	21.1
Fixed Assets	Rs m	4,196	4,492	7.0
Total Assets	Rs m	19,352	22,848	18.1

KEI INDUSTRIES Cash Flow Statement Analysis

• KEI INDUSTRIES's cash flow from operating activities (CFO) during FY18 stood at Rs 2 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -763 million, an improvement of 21.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -690 million on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 454 million from the Rs 1 billion net cash flows seen during FY17.

KEI INDUSTRIES 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	-288	1,907	-
Cash Flow from Investing Activities	Rs m	-627	-763	-
Cash Flow from Financing Activities	Rs m	2,287	-690	-
Net Cash Flow	Rs m	1,371	454	-66.9%

Current Valuations for KEI INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 18.5, an improvement from the EPS of Rs 12.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 384.8, stands at 24.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.8 times, while the price to sales ratio stands at 0.9 times.
• The company's price to cash flow (P/CF) ratio stood at 13.4 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	311.6	437.5
TTM Earnings per share	Rs	12.1	18.5
Diluted earnings per share	Rs	10.4	16.1
Price to Cash Flow	x	13.4	13.4
TTM P/E ratio	x	16.7	24.0
Price / Book Value ratio	x	2.4	4.0
Market Cap	Rs m	10,942	23,800
Dividends per share (Unadj.)	Rs	0.6	1.0

Ratio Analysis for KEI INDUSTRIES

• 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 improved and stood at 2.8x during FY18, from 2.0x 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 24.2% during FY18, from 20.6% 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 declined and down at 42.5% during FY18, from 47.2% 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 11.2% during FY18, from 11.3% 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	1.1	1.2
Debtors’ Days	Days	124	109
Interest coverage	x	2.0	2.8
Debt to equity ratio	x	0.2	0.2
Return on assets	%	11.3	11.2
Return on equity	%	20.6	24.2
Return on capital employed	%	47.2	42.5

To see how KEI INDUSTRIES has performed over the last 5 years, please visit here.

KEI INDUSTRIES Share Price Performance

Over the last one year, KEI INDUSTRIES share price has moved up from Rs 182.4 to Rs 384.8, registering a gain of Rs 202.4 or around 111.0%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 2,125.8 (down 1.1%). Over the last one year it has moved down from 2,274.4 to 2,125.8, a loss of 149 points (down 6.5%).

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

(To know more, check out historical annual results for KEI INDUSTRIES and quarterly results for KEI INDUSTRIES)

Read: Latest Annual Report Analysis of KEI INDUSTRIES