NITCO 2018-19 Annual Report Analysis

Sun, 31 Mar

NITCO 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.

NITCO Income Statement Analysis

• Operating income during the year fell 1.3% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 100.7% YoY during the fiscal. Operating profit margins witnessed a growth and stood at 0.3% in FY19 as against 41.8% in FY18.
• Depreciation charges decreased by 51.3% and finance costs increased by 58.6% YoY, respectively.
• Other income declined by 60.6% YoY.
• Net profit for the year declined by 132.5% YoY.
• Net profit margins during the year declined from 30.7% in FY18 to 10.1% in FY19.

NITCO Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	6,021	5,945	-1.3%
Other income	Rs m	51	20	-60.6%
Total Revenues	Rs m	6,072	5,965	-1.8%
Gross profit	Rs m	2,514	-17	-100.7%
Depreciation	Rs m	805	392	-51.3%
Interest	Rs m	141	224	58.6%
Profit before tax	Rs m	1,618	-614	-137.9%
Tax	Rs m	-229	-13	-94.3%
Profit after tax	Rs m	1,848	-601	-132.5%
Gross profit margin	%	41.8	-0.3
Effective tax rate	%	-14.2	2.1
Net profit margin	%	30.7	-10.1

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NITCO Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 4 billion as compared to Rs 3 billion in FY18, thereby witnessing an increase of 26.9%.
• Long-term debt down at Rs 7 billion as compared to Rs 8 billion during FY18, a fall of 8.6%.
• Current assets fell 4% and stood at Rs 7 billion, while fixed assets fell 2% and stood at Rs 6 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 13 billion as against Rs 13 billion during FY18, thereby witnessing a fall of 3%.

NITCO Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	1,477	942	-36.2
Current Liabilities	Rs m	3,423	4,344	26.9
Long-term Debt	Rs m	8,199	7,490	-8.6
Total Liabilities	Rs m	13,477	13,076	-3.0
Current assets	Rs m	7,433	7,131	-4.1
Fixed Assets	Rs m	6,044	5,944	-1.7
Total Assets	Rs m	13,477	13,076	-3.0

NITCO Cash Flow Statement Analysis

• NITCO's cash flow from operating activities (CFO) during FY19 stood at Rs 252 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -114 million, an improvement of 91.8% on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -159 million, an improvement of 96% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -21 million from the Rs -27 million net cash flows seen during FY18.

NITCO 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	3,698	252	-93.2%
Cash Flow from Investing Activities	Rs m	-60	-114	-
Cash Flow from Financing Activities	Rs m	-3,669	-159	-
Net Cash Flow	Rs m	-27	-21	-

Current Valuations for NITCO

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -8.4, an decline from the EPS of Rs 25.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 38.8, stands at -5.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.0 times, while the price to sales ratio stands at 0.5 times.
• The company's price to cash flow (P/CF) ratio stood at -23.7 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	83.8	82.7
TTM Earnings per share	Rs	25.7	-8.4
Diluted earnings per share	Rs	25.7	-8.4
Price to Cash Flow	x	2.5	-23.7
TTM P/E ratio	x	3.4	-5.9
Price / Book Value ratio	x	4.8	5.2
Market Cap	Rs m	7,159	4,928
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for NITCO

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.6x during FY19, from 2.2x 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 -1.7x during FY19, from 12.5x 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 -63.7% during FY19, from 125.1% 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 -4.6% during FY19, from 18.2% 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 -2.9% during FY19, from 14.8% 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	2.2	1.6
Debtors’ Days	Days	1,228	1,288
Interest coverage	x	12.5	-1.7
Debt to equity ratio	x	5.6	7.9
Return on assets	%	14.8	-2.9
Return on equity	%	125.1	-63.7
Return on capital employed	%	18.2	-4.6

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

NITCO Share Price Performance

Over the last one year, NITCO share price has moved down from Rs 92.5 to Rs 38.8, registering a loss of Rs 53.7 or around 58.1%.

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

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

Read: Latest Annual Report Analysis of NITCO