MUNJAL SHOWA 2017-18 Annual Report Analysis

Tue, 18 Dec

MUNJAL SHOWA 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.

MUNJAL SHOWA Income Statement Analysis

• Operating income during the year rose 8.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 13.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 7.2% in FY18 as against 6.8% in FY17.
• Depreciation charges decreased by 2.8% and finance costs increased by 200.0% YoY, respectively.
• Other income grew by 17.6% YoY.
• Net profit for the year grew by 27.7% YoY.
• Net profit margins during the year grew from 4.1% in FY17 to 4.8% in FY18.

MUNJAL SHOWA Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	14,597	15,814	8.3%
Other income	Rs m	176	207	17.6%
Total Revenues	Rs m	14,772	16,021	8.5%
Gross profit	Rs m	995	1,131	13.7%
Depreciation	Rs m	291	282	-2.8%
Interest	Rs m	1	2	200.0%
Profit before tax	Rs m	880	1,054	19.8%
Tax	Rs m	272	279	2.4%
Profit after tax	Rs m	607	775	27.7%
Gross profit margin	%	6.8	7.2
Effective tax rate	%	31.0	26.5
Net profit margin	%	4.1	4.8

MUNJAL SHOWA Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 2 billion as compared to Rs 2 billion in FY17, thereby witnessing an increase of 41.7%.
• Current assets rose 33% and stood at Rs 6 billion, while fixed assets fell 13% and stood at Rs 2 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 8 billion as against Rs 7 billion during FY17, thereby witnessing a growth of 17%.

MUNJAL SHOWA Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	5,127	5,696	11.1
Current Liabilities	Rs m	1,557	2,207	41.7
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	6,758	7,933	17.4
Current assets	Rs m	4,335	5,778	33.3
Fixed Assets	Rs m	1,808	1,580	-12.6
Total Assets	Rs m	6,758	7,933	17.4

MUNJAL SHOWA Cash Flow Statement Analysis

• MUNJAL SHOWA's cash flow from operating activities (CFO) during FY18 stood at Rs 962 million, an improvement of 15.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -633 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -194 million on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 135 million from the Rs 41 million net cash flows seen during FY17.

MUNJAL SHOWA 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	835	962	15.2%
Cash Flow from Investing Activities	Rs m	-793	-633	-
Cash Flow from Financing Activities	Rs m	-1	-194	-
Net Cash Flow	Rs m	41	135	227.4%

Current Valuations for MUNJAL SHOWA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 19.4, an improvement from the EPS of Rs 15.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 177.1, stands at 9.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.7 times, while the price to sales ratio stands at 0.6 times.
• The company's price to cash flow (P/CF) ratio stood at 6.7 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	364.9	395.4
TTM Earnings per share	Rs	15.2	19.4
Diluted earnings per share	Rs	15.2	19.4
Price to Cash Flow	x	7.9	6.7
TTM P/E ratio	x	9.3	9.3
Price / Book Value ratio	x	1.6	1.7
Market Cap	Rs m	7,084	7,084
Dividends per share (Unadj.)	Rs	4.0	4.5

Ratio Analysis for MUNJAL SHOWA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.6x during FY18, from 2.8x 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 703.7x during FY18, from 1,760.2x 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 13.6% during FY18, from 11.8% 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 improved and stood at 18.5% during FY18, from 17.2% 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 improved and stood at 9.8% during FY18, from 9.0% 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	2.8	2.6
Debtors’ Days	Days	49	57
Interest coverage	x	1,760.2	703.7
Debt to equity ratio	x	0.0	0.0
Return on assets	%	9.0	9.8
Return on equity	%	11.8	13.6
Return on capital employed	%	17.2	18.5

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

MUNJAL SHOWA Share Price Performance

Over the last one year, MUNJAL SHOWA share price has moved up from Rs 267.0 to Rs 177.1, registering a loss of Rs 89.9 or around 33.7%.

Overall, the S&P BSE SENSEX is up 7.4% over the year.

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