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NAHAR SPINNING M 2017-18 Annual Report Analysis

Sat, 31 Mar

NAHAR SPINNING M 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.

NAHAR SPINNING M Income Statement Analysis

• Operating income during the year rose 0.1% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 50.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 4.4% in FY18 as against 8.8% in FY17.
• Depreciation charges decreased by 1.8% and finance costs increased by 17.9% YoY, respectively.
• Other income declined by 59.1% YoY.
• Net profit for the year declined by 170.0% YoY.
• Net profit margins during the year declined from 2.2% in FY17 to 1.5% in FY18.

NAHAR SPINNING M Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	21,321	21,332	0.1%
Other income	Rs m	220	90	-59.1%
Total Revenues	Rs m	21,541	21,422	-0.6%
Gross profit	Rs m	1,881	937	-50.2%
Depreciation	Rs m	958	941	-1.8%
Interest	Rs m	465	549	17.9%
Profit before tax	Rs m	677	-463	-168.4%
Tax	Rs m	217	-141	-165.0%
Profit after tax	Rs m	460	-322	-170.0%
Gross profit margin	%	8.8	4.4
Effective tax rate	%	32.1	30.5
Net profit margin	%	2.2	-1.5

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NAHAR SPINNING M Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 11 billion as compared to Rs 7 billion in FY17, thereby witnessing an increase of 50.6%.
• Long-term debt down at Rs 729 million as compared to Rs 2 billion during FY17, a fall of 56.9%.
• Current assets rose 31% and stood at Rs 13 billion, while fixed assets fell 8% and stood at Rs 8 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 20 billion as against Rs 18 billion during FY17, thereby witnessing a growth of 13%.

NAHAR SPINNING M Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	8,563	8,186	-4.4
Current Liabilities	Rs m	7,459	11,235	50.6
Long-term Debt	Rs m	1,694	729	-56.9
Total Liabilities	Rs m	18,100	20,397	12.7
Current assets	Rs m	9,533	12,510	31.2
Fixed Assets	Rs m	8,567	7,887	-7.9
Total Assets	Rs m	18,100	20,397	12.7

NAHAR SPINNING M Cash Flow Statement Analysis

• NAHAR SPINNING M's cash flow from operating activities (CFO) during FY18 stood at Rs -2 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -192 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -1 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -4 billion from the Rs 2 billion net cash flows seen during FY17.

NAHAR SPINNING M 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	3,825	-2,399	-
Cash Flow from Investing Activities	Rs m	-613	-192	-
Cash Flow from Financing Activities	Rs m	-1,200	-1,225	-
Net Cash Flow	Rs m	2,012	-3,816	-

Current Valuations for NAHAR SPINNING M

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -8.9, an decline from the EPS of Rs 12.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 86.5, stands at -9.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.4 times, while the price to sales ratio stands at 0.1 times.
• The company's price to cash flow (P/CF) ratio stood at 7.0 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	591.1	591.4
TTM Earnings per share	Rs	12.7	-8.9
Diluted earnings per share	Rs	12.7	-8.9
Price to Cash Flow	x	3.4	7.0
TTM P/E ratio	x	10.7	-9.7
Price / Book Value ratio	x	0.5	0.5
Market Cap	Rs m	4,600	4,312
Dividends per share (Unadj.)	Rs	1.5	0.5

Ratio Analysis for NAHAR SPINNING M

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.1x during FY18, from 1.3x 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 0.2x during FY18, from 2.5x 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 -3.9% during FY18, from 5.4% 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 1.0% during FY18, from 11.1% 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 1.1% during FY18, from 5.1% 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	1.3	1.1
Debtors’ Days	Days	520	591
Interest coverage	x	2.5	0.2
Debt to equity ratio	x	0.2	0.1
Return on assets	%	5.1	1.1
Return on equity	%	5.4	-3.9
Return on capital employed	%	11.1	1.0

To see how NAHAR SPINNING M has performed over the last 5 years, please visit here.

NAHAR SPINNING M Share Price Performance

Over the last one year, NAHAR SPINNING M share price has moved down from Rs 135.3 to Rs 86.5, registering a loss of Rs 48.8 or around 36.1%.

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

(To know more, check out historical annual results for NAHAR SPINNING M and quarterly results for NAHAR SPINNING M)

Read: Latest Annual Report Analysis of NAHAR SPINNING M