PIRAMAL ENTERPRISES 2018-19 Annual Report Analysis

Sun, 31 Mar

PIRAMAL ENTERPRISES 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.

PIRAMAL ENTERPRISES Income Statement Analysis

• Operating income during the year rose 24.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 20.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 46.8% in FY19 as against 48.5% in FY18.
• Depreciation charges decreased by 16.1% and finance costs increased by 37.7% YoY, respectively.
• Other income grew by 20.2% YoY.
• Net profit for the year declined by 76.3% YoY.
• Net profit margins during the year declined from 45.6% in FY18 to 8.7% in FY19.

PIRAMAL ENTERPRISES Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	106,227	132,148	24.4%
Other income	Rs m	2,641	3,173	20.2%
Total Revenues	Rs m	108,868	135,321	24.3%
Gross profit	Rs m	51,553	61,893	20.1%
Depreciation	Rs m	4,773	4,005	-16.1%
Interest	Rs m	29,783	41,003	37.7%
Profit before tax	Rs m	19,638	20,058	2.1%
Tax	Rs m	-28,764	8,611	-129.9%
Profit after tax	Rs m	48,402	11,447	-76.3%
Gross profit margin	%	48.5	46.8
Effective tax rate	%	-146.5	42.9
Net profit margin	%	45.6	8.7

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PIRAMAL ENTERPRISES Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 312 billion as compared to Rs 225 billion in FY18, thereby witnessing an increase of 38.9%.
• Long-term debt stood at Rs 270 billion as compared to Rs 242 billion during FY18, a growth of 11.6%.
• Current assets fell 1% and stood at Rs 124 billion, while fixed assets rose 21% and stood at Rs 751 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 875 billion as against Rs 744 billion during FY18, thereby witnessing a growth of 18%.

PIRAMAL ENTERPRISES Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	265,624	272,200	2.5
Current Liabilities	Rs m	224,787	312,130	38.9
Long-term Debt	Rs m	242,206	270,331	11.6
Total Liabilities	Rs m	744,085	874,795	17.6
Current assets	Rs m	125,657	123,903	-1.4
Fixed Assets	Rs m	618,429	750,892	21.4
Total Assets	Rs m	744,085	874,795	17.6

PIRAMAL ENTERPRISES Cash Flow Statement Analysis

• PIRAMAL ENTERPRISES's cash flow from operating activities (CFO) during FY19 stood at Rs -116 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -8 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs 108 billion on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -17 billion from the Rs 9 billion net cash flows seen during FY18.

PIRAMAL ENTERPRISES 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	-159,666	-116,112	-
Cash Flow from Investing Activities	Rs m	-17,677	-8,265	-
Cash Flow from Financing Activities	Rs m	186,503	107,518	-42.4%
Net Cash Flow	Rs m	9,364	-16,794	-

Current Valuations for PIRAMAL ENTERPRISES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 62.1, an decline from the EPS of Rs 268.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,754.7, stands at 53.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.4 times, while the price to sales ratio stands at 3.8 times.
• The company's price to cash flow (P/CF) ratio stood at 30.4 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	589.3	716.4
TTM Earnings per share	Rs	268.5	62.1
Diluted earnings per share	Rs	202.8	48.0
Price to Cash Flow	x	11.0	30.4
TTM P/E ratio	x	11.8	53.7
Price / Book Value ratio	x	1.7	1.7
Market Cap	Rs m	449,337	470,275
Dividends per share (Unadj.)	Rs	25.0	28.0

Ratio Analysis for PIRAMAL ENTERPRISES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.4x during FY19, from 0.6x 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 deteriorated and stood at 1.5x during FY19, from 1.7x 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 4.2% during FY19, from 18.2% 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 improved and stood at 11.3% during FY19, from 9.7% 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 6.0% during FY19, from 10.5% 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	0.6	0.4
Debtors’ Days	Days	5	4
Interest coverage	x	1.7	1.5
Debt to equity ratio	x	0.9	1.0
Return on assets	%	10.5	6.0
Return on equity	%	18.2	4.2
Return on capital employed	%	9.7	11.3

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

PIRAMAL ENTERPRISES Share Price Performance

Over the last one year, PIRAMAL ENTERPRISES share price has moved up from Rs 2,440.5 to Rs 2,754.7, registering a gain of Rs 314.2 or around 12.9%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 14,407.9 (up 1.4%). Over the last one year it has moved up from 13,157.6 to 14,407.9, a gain of 1,250 points (up 9.5%).

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

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

Read: Latest Annual Report Analysis of PIRAMAL ENTERPRISES