NCC 2018-19 Annual Report Analysis

Sun, 31 Mar

NCC 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.

NCC Income Statement Analysis

• Operating income during the year rose 53.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 97.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 11.6% in FY19 as against 9.0% in FY18.
• Depreciation charges increased by 12.3% and finance costs increased by 13.6% YoY, respectively.
• Other income grew by 22.7% YoY.
• Net profit for the year grew by 295.0% YoY.
• Net profit margins during the year grew from 1.7% in FY18 to 4.5% in FY19.

NCC Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	83,906	128,956	53.7%
Other income	Rs m	1,014	1,243	22.7%
Total Revenues	Rs m	84,920	130,200	53.3%
Gross profit	Rs m	7,553	14,914	97.4%
Depreciation	Rs m	1,715	1,925	12.3%
Interest	Rs m	4,596	5,220	13.6%
Profit before tax	Rs m	2,256	9,012	299.5%
Tax	Rs m	802	3,268	307.6%
Profit after tax	Rs m	1,454	5,744	295.0%
Gross profit margin	%	9.0	11.6
Effective tax rate	%	35.5	36.3
Net profit margin	%	1.7	4.5

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NCC Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 90 billion as compared to Rs 73 billion in FY18, thereby witnessing an increase of 22.7%.
• Long-term debt stood at Rs 5 billion as compared to Rs 4 billion during FY18, a growth of 22.6%.
• Current assets rose 20% and stood at Rs 116 billion, while fixed assets rose 12% and stood at Rs 29 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 145 billion as against Rs 122 billion during FY18, thereby witnessing a growth of 19%.

NCC Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	40,825	45,679	11.9
Current Liabilities	Rs m	73,205	89,851	22.7
Long-term Debt	Rs m	3,984	4,884	22.6
Total Liabilities	Rs m	122,175	144,787	18.5
Current assets	Rs m	96,377	115,898	20.3
Fixed Assets	Rs m	25,797	28,889	12.0
Total Assets	Rs m	122,175	144,787	18.5

NCC Cash Flow Statement Analysis

• NCC's cash flow from operating activities (CFO) during FY19 stood at Rs 7 billion, an improvement of 14.9% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -6 billion, an improvement of 228.6% on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs 892 million, an improvement of 120% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 1 billion from the Rs -560 million net cash flows seen during FY18.

NCC 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	5,858	6,731	14.9%
Cash Flow from Investing Activities	Rs m	-1,883	-6,189	-
Cash Flow from Financing Activities	Rs m	-4,535	892	-
Net Cash Flow	Rs m	-560	1,434	-

Current Valuations for NCC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 9.6, an improvement from the EPS of Rs 2.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 112.6, stands at 12.0 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 0.5 times.
• The company's price to cash flow (P/CF) ratio stood at 7.8 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	139.7	214.7
TTM Earnings per share	Rs	2.4	9.6
Diluted earnings per share	Rs	2.4	9.4
Price to Cash Flow	x	22.6	7.8
TTM P/E ratio	x	25.0	12.0
Price / Book Value ratio	x	1.6	1.3
Market Cap	Rs m	66,026	60,080
Dividends per share (Unadj.)	Rs	1.0	1.5

Ratio Analysis for NCC

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.3x during FY19, from 1.3x 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 improved and stood at 2.7x during FY19, from 1.5x 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 improved and stood at 12.6% during FY19, from 3.6% 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 28.1% during FY19, from 15.3% 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 improved and stood at 7.6% during FY19, from 5.0% 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	1.3	1.3
Debtors’ Days	Days	22	10
Interest coverage	x	1.5	2.7
Debt to equity ratio	x	0.1	0.1
Return on assets	%	5.0	7.6
Return on equity	%	3.6	12.6
Return on capital employed	%	15.3	28.1

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

NCC Share Price Performance

Over the last one year, NCC share price has moved down from Rs 117.7 to Rs 112.6, registering a loss of Rs 5.1 or around 4.3%.

Meanwhile, the S&P BSE REALTY Index is trading at Rs 2,077.1 (up 0.6%). Over the last one year it has moved down from 2,229.9 to 2,077.1, a loss of 153 points (down 6.9%).

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

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

Read: Latest Annual Report Analysis of NCC