SWELECT ENERGY SYSTEMS 2018-19 Annual Report Analysis

Sun, 31 Mar

SWELECT ENERGY SYSTEMS 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.

SWELECT ENERGY SYSTEMS Income Statement Analysis

• Operating income during the year fell 22.2% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 30.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 10.3% in FY19 as against 11.5% in FY18.
• Depreciation charges increased by 11.7% and finance costs increased by 49.2% YoY, respectively.
• Other income grew by 3.6% YoY.
• Net profit for the year declined by 57.0% YoY.
• Net profit margins during the year declined from 5.4% in FY18 to 3.0% in FY19.

SWELECT ENERGY SYSTEMS Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	2,928	2,276	-22.2%
Other income	Rs m	273	283	3.6%
Total Revenues	Rs m	3,201	2,560	-20.0%
Gross profit	Rs m	336	234	-30.2%
Depreciation	Rs m	233	260	11.7%
Interest	Rs m	103	153	49.2%
Profit before tax	Rs m	274	105	-61.9%
Tax	Rs m	115	36	-68.5%
Profit after tax	Rs m	159	68	-57.0%
Gross profit margin	%	11.5	10.3
Effective tax rate	%	42.0	34.7
Net profit margin	%	5.4	3.0

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SWELECT ENERGY SYSTEMS Balance Sheet Analysis

• The company's current liabilities during FY19 down at Rs 2 billion as compared to Rs 2 billion in FY18, thereby witnessing an decrease of -2.6%.
• Long-term debt down at Rs 288 million as compared to Rs 317 million during FY18, a fall of 9.0%.
• Current assets fell 11% and stood at Rs 5 billion, while fixed assets rose 15% and stood at Rs 5 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 10 billion as against Rs 10 billion during FY18, thereby witnessing a growth of 0%.

SWELECT ENERGY SYSTEMS Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	7,148	7,260	1.6
Current Liabilities	Rs m	2,382	2,319	-2.6
Long-term Debt	Rs m	317	288	-9.0
Total Liabilities	Rs m	9,915	9,938	0.2
Current assets	Rs m	5,700	5,084	-10.8
Fixed Assets	Rs m	4,215	4,854	15.1
Total Assets	Rs m	9,915	9,938	0.2

SWELECT ENERGY SYSTEMS Cash Flow Statement Analysis

• SWELECT ENERGY SYSTEMS's cash flow from operating activities (CFO) during FY19 stood at Rs 691 million, an improvement of 2,379.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -1 billion, an improvement of 18.6% on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -528 million on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -1 billion from the Rs -469 million net cash flows seen during FY18.

SWELECT ENERGY SYSTEMS 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	28	691	2,379.1%
Cash Flow from Investing Activities	Rs m	-1,009	-1,197	-
Cash Flow from Financing Activities	Rs m	485	-528	-
Net Cash Flow	Rs m	-469	-1,033	-

Current Valuations for SWELECT ENERGY SYSTEMS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 6.8, an decline from the EPS of Rs 15.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 240.1, stands at 32.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.5 times, while the price to sales ratio stands at 1.1 times.
• The company's price to cash flow (P/CF) ratio stood at 9.8 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	289.6	225.2
TTM Earnings per share	Rs	15.7	6.8
Diluted earnings per share	Rs	10.5	4.5
Price to Cash Flow	x	13.8	9.8
TTM P/E ratio	x	23.0	32.9
Price / Book Value ratio	x	0.7	0.4
Market Cap	Rs m	4,896	3,229
Dividends per share (Unadj.)	Rs	4.0	2.5

Ratio Analysis for SWELECT ENERGY SYSTEMS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.2x during FY19, from 2.4x 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 3.7x 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 0.9% during FY19, from 2.2% 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 declined and down at 3.4% during FY19, from 5.0% 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 2.2% during FY19, from 2.6% 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	2.4	2.2
Debtors’ Days	Days	727	639
Interest coverage	x	3.7	1.7
Debt to equity ratio	x	0.0	0.0
Return on assets	%	2.6	2.2
Return on equity	%	2.2	0.9
Return on capital employed	%	5.0	3.4

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 down from Rs 355.6 to Rs 240.1, registering a loss of Rs 115.5 or around 32.5%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 18,472.0 (up 0.5%). Over the last one year it has moved down from 18,476.7 to 18,472.0, a loss of 5 points (down 0.0%).

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