SWELECT ENERGY SYSTEMS 2017-18 Annual Report Analysis

Sat, 31 Mar

SWELECT ENERGY SYSTEMS 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.

SWELECT ENERGY SYSTEMS Income Statement Analysis

• Operating income during the year rose 24.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 46.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 11.5% in FY18 as against 9.7% in FY17.
• Depreciation charges increased by 26.9% and finance costs increased by 7.1% YoY, respectively.
• Other income declined by 23.8% YoY.
• Net profit for the year declined by 26.5% YoY.
• Net profit margins during the year declined from 9.2% in FY17 to 5.4% in FY18.

SWELECT ENERGY SYSTEMS Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	2,357	2,928	24.2%
Other income	Rs m	359	273	-23.8%
Total Revenues	Rs m	2,716	3,201	17.8%
Gross profit	Rs m	229	336	46.7%
Depreciation	Rs m	183	233	26.9%
Interest	Rs m	96	103	7.1%
Profit before tax	Rs m	309	274	-11.2%
Tax	Rs m	92	115	24.6%
Profit after tax	Rs m	216	159	-26.5%
Gross profit margin	%	9.7	11.5
Effective tax rate	%	29.9	42.0
Net profit margin	%	9.2	5.4

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SWELECT ENERGY SYSTEMS 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 48.8%.
• Long-term debt down at Rs 317 million as compared to Rs 347 million during FY17, a fall of 8.8%.
• Current assets rose 3% and stood at Rs 6 billion, while fixed assets rose 22% 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 10%.

SWELECT ENERGY SYSTEMS Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	7,002	7,148	2.1
Current Liabilities	Rs m	1,601	2,382	48.8
Long-term Debt	Rs m	347	317	-8.8
Total Liabilities	Rs m	9,006	9,915	10.1
Current assets	Rs m	5,542	5,700	2.8
Fixed Assets	Rs m	3,464	4,215	21.7
Total Assets	Rs m	9,006	9,915	10.1

SWELECT ENERGY SYSTEMS Cash Flow Statement Analysis

• SWELECT ENERGY SYSTEMS's cash flow from operating activities (CFO) during FY18 stood at Rs 28 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -1 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs 485 million, an improvement of 193% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -469 million from the Rs -48 million net cash flows seen during FY17.

SWELECT ENERGY SYSTEMS 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	286	28	-90.3%
Cash Flow from Investing Activities	Rs m	211	-1,009	-
Cash Flow from Financing Activities	Rs m	-519	485	-
Net Cash Flow	Rs m	-48	-469	-

Current Valuations for SWELECT ENERGY SYSTEMS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 15.7, an decline from the EPS of Rs 21.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 355.6, stands at 23.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.8 times, while the price to sales ratio stands at 1.2 times.
• The company's price to cash flow (P/CF) ratio stood at 12.5 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	233.2	289.6
TTM Earnings per share	Rs	21.4	15.7
Diluted earnings per share	Rs	14.3	10.5
Price to Cash Flow	x	13.0	12.5
TTM P/E ratio	x	17.6	23.0
Price / Book Value ratio	x	0.6	0.7
Market Cap	Rs m	3,935	4,896
Dividends per share (Unadj.)	Rs	4.0	4.0

Ratio Analysis for SWELECT ENERGY SYSTEMS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.4x during FY18, from 3.5x 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 3.7x during FY18, from 4.2x 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 declined and down at 2.2% during FY18, from 3.1% 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 5.0% during FY18, from 5.5% 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 2.6% during FY18, from 3.5% 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	3.5	2.4
Debtors’ Days	Days	1,115	727
Interest coverage	x	4.2	3.7
Debt to equity ratio	x	0.0	0.0
Return on assets	%	3.5	2.6
Return on equity	%	3.1	2.2
Return on capital employed	%	5.5	5.0

To see how SWELECT ENERGY SYSTEMS has performed over the last 5 years, please visit here.

SWELECT ENERGY SYSTEMS Share Price Performance

Over the last one year, SWELECT ENERGY SYSTEMS share price has moved up from Rs 341.8 to Rs 355.6, registering a gain of Rs 13.8 or around 4.0%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 18,476.7 (down 0.1%). Over the last one year it has moved up from 16,446.0 to 18,476.7, a gain of 2,031 points (up 12.3%).

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

(To know more, check out historical annual results for SWELECT ENERGY SYSTEMS and quarterly results for SWELECT ENERGY SYSTEMS)

Read: Latest Annual Report Analysis of SWELECT ENERGY SYSTEMS