KIRLOSKAR INDUSTRIES 2017-18 Annual Report Analysis

Sat, 31 Mar

KIRLOSKAR 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.

KIRLOSKAR INDUSTRIES Income Statement Analysis

• Operating income during the year rose 80.5% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 30.8% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 6.5% in FY18 as against 17.1% in FY17.
• Depreciation charges increased by 8.9% and finance costs decreased by 8.3% YoY, respectively.
• Other income declined by 25.1% YoY.
• Net profit for the year declined by 43.0% YoY.
• Net profit margins during the year declined from 12.0% in FY17 to 3.8% in FY18.

KIRLOSKAR INDUSTRIES Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	9,931	17,927	80.5%
Other income	Rs m	499	374	-25.1%
Total Revenues	Rs m	10,431	18,301	75.5%
Gross profit	Rs m	1,695	1,174	-30.8%
Depreciation	Rs m	469	510	8.9%
Interest	Rs m	137	125	-8.3%
Profit before tax	Rs m	1,589	912	-42.6%
Tax	Rs m	395	232	-41.4%
Profit after tax	Rs m	1,194	681	-43.0%
Gross profit margin	%	17.1	6.5
Effective tax rate	%	24.9	25.4
Net profit margin	%	12.0	3.8

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KIRLOSKAR INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 5 billion as compared to Rs 3 billion in FY17, thereby witnessing an increase of 67.2%.
• Current assets rose 353% and stood at Rs 20 billion, while fixed assets fell 29% and stood at Rs 8 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 28 billion as against Rs 16 billion during FY17, thereby witnessing a growth of 77%.

KIRLOSKAR INDUSTRIES Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	8,843	17,834	101.7
Current Liabilities	Rs m	3,097	5,178	67.2
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	15,784	27,891	76.7
Current assets	Rs m	4,374	19,795	352.5
Fixed Assets	Rs m	11,409	8,095	-29.0
Total Assets	Rs m	15,784	27,891	76.7

KIRLOSKAR INDUSTRIES Cash Flow Statement Analysis

• KIRLOSKAR INDUSTRIES's cash flow from operating activities (CFO) during FY18 stood at Rs 1 billion, an improvement of 21.5% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -308 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -871 million on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -108 million from the Rs 91 million net cash flows seen during FY17.

KIRLOSKAR 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	882	1,071	21.5%
Cash Flow from Investing Activities	Rs m	-512	-308	-
Cash Flow from Financing Activities	Rs m	-280	-871	-
Net Cash Flow	Rs m	91	-108	-

Current Valuations for KIRLOSKAR INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 70.1, an decline from the EPS of Rs 123.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,184.2, stands at 21.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.7 times, while the price to sales ratio stands at 0.6 times.
• The company's price to cash flow (P/CF) ratio stood at 11.2 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	1,022.8	1,846.2
TTM Earnings per share	Rs	123.0	70.1
Diluted earnings per share	Rs	121.8	69.5
Price to Cash Flow	x	6.5	11.2
TTM P/E ratio	x	37.6	21.9
Price / Book Value ratio	x	0.9	0.7
Market Cap	Rs m	8,277	13,306
Dividends per share (Unadj.)	Rs	20.0	21.0

Ratio Analysis for KIRLOSKAR INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.8x during FY18, from 1.4x 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 8.3x during FY18, from 12.6x 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 declined and down at 3.8% during FY18, from 13.5% 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 5.8% during FY18, from 19.5% 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 2.9% during FY18, from 8.4% 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	1.4	3.8
Debtors’ Days	Days	727	597
Interest coverage	x	12.6	8.3
Debt to equity ratio	x	0.0	0.0
Return on assets	%	8.4	2.9
Return on equity	%	13.5	3.8
Return on capital employed	%	19.5	5.8

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

KIRLOSKAR INDUSTRIES Share Price Performance

Over the last one year, KIRLOSKAR INDUSTRIES share price has moved up from Rs 1,105.5 to Rs 1,184.2, registering a gain of Rs 78.7 or around 7.1%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 18,476.7 (down 0.1%). Over the last one year it has moved up from 16,446.0 to 18,476.7, a gain of 2,031 points (up 12.3%).

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

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

Read: Latest Annual Report Analysis of KIRLOSKAR INDUSTRIES