CERA SANITARY 2017-18 Annual Report Analysis

Sat, 31 Mar

CERA SANITARY 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.

CERA SANITARY Income Statement Analysis

• Operating income during the year rose 22.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 1.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 15.1% in FY18 as against 18.4% in FY17.
• Depreciation charges increased by 22.5% and finance costs decreased by 0.8% YoY, respectively.
• Other income declined by 0.6% YoY.
• Net profit for the year grew by 6.0% YoY.
• Net profit margins during the year declined from 10.5% in FY17 to 9.0% in FY18.

CERA SANITARY Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	9,542	11,731	22.9%
Other income	Rs m	146	145	-0.6%
Total Revenues	Rs m	9,688	11,876	22.6%
Gross profit	Rs m	1,756	1,774	1.0%
Depreciation	Rs m	222	271	22.5%
Interest	Rs m	98	98	-0.8%
Profit before tax	Rs m	1,582	1,549	-2.0%
Tax	Rs m	580	488	-15.9%
Profit after tax	Rs m	1,001	1,061	6.0%
Gross profit margin	%	18.4	15.1
Effective tax rate	%	36.7	31.5
Net profit margin	%	10.5	9.0

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CERA SANITARY Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 3 billion as compared to Rs 3 billion in FY17, thereby witnessing an increase of 4.0%.
• Long-term debt down at Rs 459 million as compared to Rs 478 million during FY17, a fall of 3.9%.
• Current assets rose 14% and stood at Rs 6 billion, while fixed assets rose 6% and stood at Rs 4 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 10 billion as against Rs 9 billion during FY17, thereby witnessing a growth of 11%.

CERA SANITARY Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	5,222	6,056	16.0
Current Liabilities	Rs m	3,115	3,241	4.0
Long-term Debt	Rs m	478	459	-3.9
Total Liabilities	Rs m	9,446	10,451	10.6
Current assets	Rs m	5,602	6,380	13.9
Fixed Assets	Rs m	3,844	4,071	5.9
Total Assets	Rs m	9,446	10,451	10.6

CERA SANITARY Cash Flow Statement Analysis

• CERA SANITARY's cash flow from operating activities (CFO) during FY18 stood at Rs 754 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -410 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -339 million on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 5 million from the Rs 2 million net cash flows seen during FY17.

CERA SANITARY 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	1,016	754	-25.8%
Cash Flow from Investing Activities	Rs m	-1,023	-410	-
Cash Flow from Financing Activities	Rs m	8	-339	-
Net Cash Flow	Rs m	2	5	231.8%

Current Valuations for CERA SANITARY

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 81.6, an improvement from the EPS of Rs 77.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 3,445.4, stands at 44.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 7.4 times, while the price to sales ratio stands at 3.8 times.
• The company's price to cash flow (P/CF) ratio stood at 34.2 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	733.5	901.7
TTM Earnings per share	Rs	77.0	81.6
Diluted earnings per share	Rs	77.0	81.6
Price to Cash Flow	x	32.0	34.2
TTM P/E ratio	x	38.7	44.7
Price / Book Value ratio	x	6.1	7.5
Market Cap	Rs m	31,734	45,579
Dividends per share (Unadj.)	Rs	12.0	12.0

Ratio Analysis for CERA SANITARY

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.0x during FY18, from 1.8x 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 16.9x during FY18, from 17.1x 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 17.5% during FY18, from 19.2% 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 25.3% during FY18, from 29.5% 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 11.1% during FY18, from 11.6% 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	1.8	2.0
Debtors’ Days	Days	844	834
Interest coverage	x	17.1	16.9
Debt to equity ratio	x	0.1	0.1
Return on assets	%	11.6	11.1
Return on equity	%	19.2	17.5
Return on capital employed	%	29.5	25.3

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

CERA SANITARY Share Price Performance

Over the last one year, CERA SANITARY share price has moved up from Rs 3,013.1 to Rs 3,445.4, registering a gain of Rs 432.3 or around 14.3%.

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

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

Read: Latest Annual Report Analysis of CERA SANITARY