KWALITY 2017-18 Annual Report Analysis

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KWALITY 2017-18 Annual Report Analysis
Fri, 14 Jun

KWALITY 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.

KWALITY Income Statement Analysis

  • Operating income during the year rose 6.5% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 15.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 7.1% in FY18 as against 6.6% in FY17.
  • Depreciation charges increased by 465.7% and finance costs increased by 35.0% YoY, respectively.
  • Other income declined by 3.3% YoY.
  • Net profit for the year declined by 52.4% YoY.
  • Net profit margins during the year declined from 2.8% in FY17 to 1.3% in FY18.

KWALITY Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 68,718 73,194 6.5%
Other income Rs m 137 133 -3.3%
Total Revenues Rs m 68,855 73,326 6.5%
Gross profit Rs m 4,536 5,233 15.4%
Depreciation Rs m 223 1,263 465.7%
Interest Rs m 1,814 2,449 35.0%
Profit before tax Rs m 2,636 1,654 -37.3%
Tax Rs m 694 730 5.2%
Profit after tax Rs m 1,941 924 -52.4%
Gross profit margin % 6.6 7.1
Effective tax rate % 26.3 44.1
Net profit margin % 2.8 1.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



KWALITY Balance Sheet Analysis

  • The company's current liabilities during FY18 stood at Rs 17 billion as compared to Rs 14 billion in FY17, thereby witnessing an increase of 25.0%.
  • Long-term debt down at Rs 5 billion as compared to Rs 5 billion during FY17, a fall of 7.0%.
  • Current assets rose 23% and stood at Rs 28 billion, while fixed assets rose 17% and stood at Rs 5 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 35 billion as against Rs 30 billion during FY17, thereby witnessing a growth of 15%.

KWALITY Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 11,173 12,566 12.5
 
Current Liabilities Rs m 13,949 17,431 25.0
Long-term Debt Rs m 5,031 4,681 -7.0
Total Liabilities Rs m 30,283 34,812 15.0
 
Current assets Rs m 22,993 28,167 22.5
Fixed Assets Rs m 4,455 5,231 17.4
Total Assets Rs m 30,283 34,812 15.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



KWALITY Cash Flow Statement Analysis

  • KWALITY's cash flow from operating activities (CFO) during FY18 stood at Rs 855 million on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -974 million on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -72 million on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs -192 million from the Rs 336 million net cash flows seen during FY17.

KWALITY 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 2,707 855 -68.4%
Cash Flow from Investing Activities Rs m -2,753 -974 -
Cash Flow from Financing Activities Rs m 383 -72 -
Net Cash Flow Rs m 336 -192 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for KWALITY

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 3.8, an decline from the EPS of Rs 8.2 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 3.7, stands at -0.1 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.2 times, while the price to sales ratio stands at 0.4 times.
  • The company's price to cash flow (P/CF) ratio stood at 0.4 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 289.5 303.3
TTM Earnings per share Rs 8.2 3.8
Diluted earnings per share Rs 8.9 4.2
Price to Cash Flow x 0.4 0.4
TTM P/E ratio x -0.1 -0.1
Price / Book Value ratio x 2.8 2.2
Market Cap Rs m 881 811
Dividends per share (Unadj.) Rs 0.1 0.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for KWALITY

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 1.6x during FY18, from 1.6x 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 1.7x during FY18, from 2.5x 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 7.3% during FY18, from 17.4% 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 23.8% during FY18, from 27.5% 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 9.7% during FY18, from 12.4% 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 1.6 1.6
Debtors’ Days Days 84 95
Interest coverage x 2.5 1.7
Debt to equity ratio x 0.5 0.4
Return on assets % 12.4 9.7
Return on equity % 17.4 7.3
Return on capital employed % 27.5 23.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

KWALITY Share Price Performance

Over the last one year, KWALITY share price has moved up from Rs 30.0 to Rs 3.7, registering a loss of Rs 26.2 or around 87.6%.

Overall, the S&P BSE SENSEX is up 10.7% over the year.

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

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Related Views on News

KWALITY Announces Quarterly Results (4QFY19); Net Profit Down 38640.1% (Quarterly Result Update)

Jun 17, 2019 | Updated on Jun 17, 2019

For the quarter ended March 2019, KWALITY has posted a net profit of Rs 5 bn (down 38640.1% YoY). Sales on the other hand came in at Rs 1 bn (down 93.3% YoY). Read on for a complete analysis of KWALITY's quarterly results.

KWALITY DAIRY Announces Quarterly Results (1QFY19); Net Profit Down 96.3% (Quarterly Result Update)

Sep 17, 2018 | Updated on Sep 17, 2018

For the quarter ended June 2018, KWALITY DAIRY has posted a net profit of Rs 10 m (down 96.3% YoY). Sales on the other hand came in at Rs 13 bn (down 19.7% YoY). Read on for a complete analysis of KWALITY DAIRY's quarterly results.

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