THE RAMCO CEMENTS 2018-19 Annual Report Analysis

Sun, 31 Mar

THE RAMCO CEMENTS has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

THE RAMCO CEMENTS Income Statement Analysis

• Operating income during the year rose 19.1% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 6.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 27.9% in FY19 as against 35.4% in FY18.
• Depreciation charges increased by 2.1% and finance costs decreased by 13.6% YoY, respectively.
• Other income declined by 23.6% YoY.
• Net profit for the year declined by 9.5% YoY.
• Net profit margins during the year declined from 17.8% in FY18 to 13.6% in FY19.

THE RAMCO CEMENTS Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	31,432	37,422	19.1%
Other income	Rs m	327	250	-23.6%
Total Revenues	Rs m	31,759	37,671	18.6%
Gross profit	Rs m	11,135	10,456	-6.1%
Depreciation	Rs m	2,937	3,000	2.1%
Interest	Rs m	608	525	-13.6%
Profit before tax	Rs m	7,917	7,181	-9.3%
Tax	Rs m	2,312	2,106	-8.9%
Profit after tax	Rs m	5,605	5,075	-9.5%
Gross profit margin	%	35.4	27.9
Effective tax rate	%	29.2	29.3
Net profit margin	%	17.8	13.6

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THE RAMCO CEMENTS Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 23 billion as compared to Rs 20 billion in FY18, thereby witnessing an increase of 11.1%.
• Long-term debt stood at Rs 7 billion as compared to Rs 4 billion during FY18, a growth of 67.4%.
• Current assets rose 4% and stood at Rs 16 billion, while fixed assets rose 16% and stood at Rs 68 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 84 billion as against Rs 74 billion during FY18, thereby witnessing a growth of 14%.

THE RAMCO CEMENTS Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	41,126	45,370	10.3
Current Liabilities	Rs m	20,300	22,562	11.1
Long-term Debt	Rs m	4,188	7,012	67.4
Total Liabilities	Rs m	73,754	83,921	13.8
Current assets	Rs m	15,046	15,692	4.3
Fixed Assets	Rs m	58,709	68,229	16.2
Total Assets	Rs m	73,754	83,921	13.8

THE RAMCO CEMENTS Cash Flow Statement Analysis

• THE RAMCO CEMENTS's cash flow from operating activities (CFO) during FY19 stood at Rs 8 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -12 billion, an improvement of 145.3% on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs 7 billion, an improvement of 182% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 2 billion from the Rs -2 billion net cash flows seen during FY18.

THE RAMCO CEMENTS Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	11,242	7,926	-29.5%
Cash Flow from Investing Activities	Rs m	-4,900	-12,021	-
Cash Flow from Financing Activities	Rs m	-7,930	6,529	-
Net Cash Flow	Rs m	-1,587	2,434	-

Current Valuations for THE RAMCO CEMENTS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 21.5, an decline from the EPS of Rs 23.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 736.3, stands at 34.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.8 times, while the price to sales ratio stands at 4.6 times.
• The company's price to cash flow (P/CF) ratio stood at 20.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	133.4	158.8
TTM Earnings per share	Rs	23.8	21.5
Diluted earnings per share	Rs	23.7	21.5
Price to Cash Flow	x	20.3	20.8
TTM P/E ratio	x	31.2	34.4
Price / Book Value ratio	x	4.3	3.7
Market Cap	Rs m	175,381	167,878
Dividends per share (Unadj.)	Rs	3.0	3.0

Ratio Analysis for THE RAMCO CEMENTS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.7x during FY19, from 0.7x during FY18. 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 14.7x during FY19, from 14.0x during FY18. 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 11.2% during FY19, from 13.6% during FY19. 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 14.7% during FY19, from 18.8% during FY18. 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 6.7% during FY19, from 8.4% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	0.7	0.7
Debtors’ Days	Days	5	5
Interest coverage	x	14.0	14.7
Debt to equity ratio	x	0.1	0.2
Return on assets	%	8.4	6.7
Return on equity	%	13.6	11.2
Return on capital employed	%	18.8	14.7

To see how THE RAMCO CEMENTS has performed over the last 5 years, please visit here.

THE RAMCO CEMENTS Share Price Performance

Over the last one year, THE RAMCO CEMENTS share price has moved up from Rs 733.5 to Rs 736.3, registering a gain of Rs 2.9 or around 0.4%.

Overall, the S&P BSE SENSEX is up 16.3% over the year.

(To know more, check out historical annual results for THE RAMCO CEMENTS and quarterly results for THE RAMCO CEMENTS)

Read: Latest Annual Report Analysis of THE RAMCO CEMENTS