NALCO 2017-18 Annual Report Analysis

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NALCO 2017-18 Annual Report Analysis
Tue, 1 Jan

NALCO 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.

NALCO Income Statement Analysis

  • Operating income during the year rose 26.1% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 29.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 14.7% in FY18 as against 14.3% in FY17.
  • Depreciation charges increased by 0.0% and finance costs decreased by 27.5% YoY, respectively.
  • Other income declined by 26.6% YoY.
  • Net profit for the year grew by 101.0% YoY.
  • Net profit margins during the year grew from 8.4% in FY17 to 13.7% in FY18.

NALCO Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 75,430 95,095 26.1%
Other income Rs m 4,083 2,997 -26.6%
Total Revenues Rs m 79,513 98,091 23.4%
Gross profit Rs m 10,797 13,975 29.4%
Depreciation Rs m 4,804 4,804 0.0%
Interest Rs m 27 20 -27.5%
Profit before tax Rs m 10,049 12,148 20.9%
Tax Rs m 2,962 6,964 135.1%
Profit after tax Rs m 6,677 13,422 101.0%
Gross profit margin % 14.3 14.7
Effective tax rate % 29.5 57.3
Net profit margin % 8.4 13.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



NALCO Balance Sheet Analysis

  • The company's current liabilities during FY18 down at Rs 24 billion as compared to Rs 27 billion in FY17, thereby witnessing an decrease of -8.0%.
  • Current assets fell 1% and stood at Rs 56 billion, while fixed assets rose 7% and stood at Rs 81 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 146 billion as against Rs 145 billion during FY17, thereby witnessing a growth of 1%.

NALCO Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 102,052 105,040 2.9
 
Current Liabilities Rs m 26,519 24,409 -8.0
Long-term Debt Rs m 0 0 0.0
Total Liabilities Rs m 145,010 146,129 0.8
 
Current assets Rs m 56,558 56,139 -0.7
Fixed Assets Rs m 75,333 80,547 6.9
Total Assets Rs m 145,010 146,129 0.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



NALCO Cash Flow Statement Analysis

  • NALCO's cash flow from operating activities (CFO) during FY18 stood at Rs 15 billion, an improvement of 2.1% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -4 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -11 billion, an improvement of 70% on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs 5 million from the Rs -6 billion net cash flows seen during FY17.

NALCO 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 14,359 14,666 2.1%
Cash Flow from Investing Activities Rs m 15,503 -3,664 -
Cash Flow from Financing Activities Rs m -36,159 -10,997 -
Net Cash Flow Rs m -6,296 5 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for NALCO

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 6.9, an improvement from the EPS of Rs 3.5 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 64.9, stands at 7.7 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.5 times, while the price to sales ratio stands at 1.6 times.
  • The company's price to cash flow (P/CF) ratio stood at 9.2 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 39.0 49.2
TTM Earnings per share Rs 3.5 6.9
Diluted earnings per share Rs 2.6 5.2
Price to Cash Flow x 10.9 9.2
TTM P/E ratio x 5.8 7.7
Price / Book Value ratio x 1.1 1.5
Market Cap Rs m 125,447 167,263
Dividends per share (Unadj.) Rs 2.8 5.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for NALCO

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 2.3x during FY18, from 2.1x 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 623.9x during FY18, from 374.6x 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 12.8% during FY18, from 6.5% 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 19.4% during FY18, from 9.5% 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 improved and stood at 9.2% during FY18, from 4.6% 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 2.1 2.3
Debtors’ Days Days 9 10
Interest coverage x 374.6 623.9
Debt to equity ratio x 0.0 0.0
Return on assets % 4.6 9.2
Return on equity % 6.5 12.8
Return on capital employed % 9.5 19.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

NALCO Share Price Performance

Over the last one year, NALCO share price has moved up from Rs 85.5 to Rs 64.9, registering a loss of Rs 20.6 or around 24.0%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 11,744.3 (down 0.8%). Over the last one year it has moved down from 14,939.3 to 11,744.3, a loss of 3,195 points (down 21.4%).

Overall, the S&P BSE SENSEX is up 6.3% over the year.

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

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NALCO Announces Quarterly Results (1QFY20); Net Profit Down 85.8% (Quarterly Result Update)

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For the quarter ended June 2019, NALCO has posted a net profit of Rs 978 m (down 85.8% YoY). Sales on the other hand came in at Rs 21 bn (down 29.9% YoY). Read on for a complete analysis of NALCO's quarterly results.

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