KALYANI STEELS 2017-18 Annual Report Analysis

Sat, 31 Mar

KALYANI STEELS 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.

KALYANI STEELS Income Statement Analysis

• Operating income during the year rose 17.9% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 29.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 15.7% in FY18 as against 26.0% in FY17.
• Depreciation charges decreased by 28.4% and finance costs decreased by 9.3% YoY, respectively.
• Other income grew by 28.1% YoY.
• Net profit for the year declined by 26.1% YoY.
• Net profit margins during the year declined from 14.1% in FY17 to 8.9% in FY18.

KALYANI STEELS Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	11,043	13,022	17.9%
Other income	Rs m	136	175	28.1%
Total Revenues	Rs m	11,180	13,197	18.0%
Gross profit	Rs m	2,872	2,040	-29.0%
Depreciation	Rs m	521	373	-28.4%
Interest	Rs m	102	93	-9.3%
Profit before tax	Rs m	2,386	1,750	-26.7%
Tax	Rs m	827	597	-27.8%
Profit after tax	Rs m	1,559	1,153	-26.1%
Gross profit margin	%	26.0	15.7
Effective tax rate	%	34.7	34.1
Net profit margin	%	14.1	8.9

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KALYANI STEELS Balance Sheet Analysis

• The company's current liabilities during FY18 down at Rs 4 billion as compared to Rs 5 billion in FY17, thereby witnessing an decrease of -21.8%.
• Long-term debt down at Rs 236 million as compared to Rs 652 million during FY17, a fall of 63.9%.
• Current assets fell 9% and stood at Rs 7 billion, while fixed assets fell 3% and stood at Rs 6 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 13 billion as against Rs 14 billion during FY17, thereby witnessing a fall of 6%.

KALYANI STEELS Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	7,010	7,847	11.9
Current Liabilities	Rs m	5,406	4,229	-21.8
Long-term Debt	Rs m	652	236	-63.9
Total Liabilities	Rs m	13,620	12,799	-6.0
Current assets	Rs m	7,243	6,615	-8.7
Fixed Assets	Rs m	6,377	6,183	-3.0
Total Assets	Rs m	13,620	12,799	-6.0

KALYANI STEELS Cash Flow Statement Analysis

• KALYANI STEELS's cash flow from operating activities (CFO) during FY18 stood at Rs 2 billion, an improvement of 25.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -766 million, an improvement of 100.8% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -1 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 95 million from the Rs 157 million net cash flows seen during FY17.

KALYANI STEELS 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	1,521	1,912	25.7%
Cash Flow from Investing Activities	Rs m	-381	-766	-
Cash Flow from Financing Activities	Rs m	-982	-1,051	-
Net Cash Flow	Rs m	157	95	-39.5%

Current Valuations for KALYANI STEELS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 26.4, an decline from the EPS of Rs 35.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 296.3, stands at 11.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.6 times, while the price to sales ratio stands at 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 10.5 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	253.0	298.3
TTM Earnings per share	Rs	35.7	26.4
Diluted earnings per share	Rs	35.7	26.4
Price to Cash Flow	x	7.6	10.5
TTM P/E ratio	x	10.1	11.3
Price / Book Value ratio	x	1.8	2.0
Market Cap	Rs m	12,385	15,996
Dividends per share (Unadj.)	Rs	5.0	5.0

Ratio Analysis for KALYANI STEELS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.6x during FY18, from 1.3x 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 19.9x during FY18, from 24.4x 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 14.7% during FY18, from 22.2% 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 22.8% during FY18, from 32.5% 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 12.2% 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	1.3	1.6
Debtors’ Days	Days	154	105
Interest coverage	x	24.4	19.9
Debt to equity ratio	x	0.1	0.0
Return on assets	%	12.2	9.7
Return on equity	%	22.2	14.7
Return on capital employed	%	32.5	22.8

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

KALYANI STEELS Share Price Performance

Over the last one year, KALYANI STEELS share price has moved down from Rs 362.0 to Rs 296.3, registering a loss of Rs 65.7 or around 18.2%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 13,322.0 (down 2.0%). Over the last one year it has moved up from 11,804.5 to 13,322.0, a gain of 1,518 points (up 12.9%).

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

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

Read: Latest Annual Report Analysis of KALYANI STEELS