NATIONAL FERT 2017-18 Annual Report Analysis

Sat, 31 Mar

NATIONAL FERT 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.

NATIONAL FERT Income Statement Analysis

• Operating income during the year rose 18.2% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 3.9% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 6.0% in FY18 as against 7.4% in FY17.
• Depreciation charges decreased by 13.9% and finance costs decreased by 26.7% YoY, respectively.
• Other income declined by 37.8% YoY.
• Net profit for the year grew by 2.2% YoY.
• Net profit margins during the year declined from 2.8% in FY17 to 2.4% in FY18.

NATIONAL FERT Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	75,568	89,307	18.2%
Other income	Rs m	1,754	1,091	-37.8%
Total Revenues	Rs m	77,322	90,398	16.9%
Gross profit	Rs m	5,573	5,356	-3.9%
Depreciation	Rs m	852	733	-13.9%
Interest	Rs m	3,227	2,366	-26.7%
Profit before tax	Rs m	3,249	3,348	3.1%
Tax	Rs m	1,167	1,221	4.6%
Profit after tax	Rs m	2,082	2,128	2.2%
Gross profit margin	%	7.4	6.0
Effective tax rate	%	35.9	36.5
Net profit margin	%	2.8	2.4

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NATIONAL FERT Balance Sheet Analysis

• The company's current liabilities during FY18 down at Rs 45 billion as compared to Rs 52 billion in FY17, thereby witnessing an decrease of -12.2%.
• Long-term debt down at Rs 1 billion as compared to Rs 2 billion during FY17, a fall of 33.5%.
• Current assets fell 9% and stood at Rs 52 billion, while fixed assets fell 0% and stood at Rs 44 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 96 billion as against Rs 102 billion during FY17, thereby witnessing a fall of 5%.

NATIONAL FERT Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	18,248	19,856	8.8
Current Liabilities	Rs m	51,633	45,317	-12.2
Long-term Debt	Rs m	1,724	1,146	-33.5
Total Liabilities	Rs m	101,802	96,266	-5.4
Current assets	Rs m	57,944	52,480	-9.4
Fixed Assets	Rs m	43,858	43,785	-0.2
Total Assets	Rs m	101,802	96,266	-5.4

NATIONAL FERT Cash Flow Statement Analysis

• NATIONAL FERT's cash flow from operating activities (CFO) during FY18 stood at Rs 17 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -3 billion, an improvement of 71.6% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -13 billion, an improvement of 42% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 14 million from the Rs 12 million net cash flows seen during FY17.

NATIONAL FERT 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	24,529	16,611	-32.3%
Cash Flow from Investing Activities	Rs m	-2,015	-3,458	-
Cash Flow from Financing Activities	Rs m	-22,503	-13,140	-
Net Cash Flow	Rs m	12	14	19.0%

Current Valuations for NATIONAL FERT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 4.3, an improvement from the EPS of Rs 4.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 54.0, stands at 12.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.3 times, while the price to sales ratio stands at 0.3 times.
• The company's price to cash flow (P/CF) ratio stood at 12.1 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	154.0	182.0
TTM Earnings per share	Rs	4.2	4.3
Diluted earnings per share	Rs	4.2	4.3
Price to Cash Flow	x	12.8	12.1
TTM P/E ratio	x	18.1	12.4
Price / Book Value ratio	x	1.5	1.7
Market Cap	Rs m	26,749	34,586
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for NATIONAL FERT

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.2x during FY18, from 1.1x 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 improved and stood at 2.4x during FY18, from 2.0x 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 10.7% during FY18, from 11.4% 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 27.2% during FY18, from 32.4% 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 4.7% during FY18, from 5.2% 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	1.1	1.2
Debtors’ Days	Days	21	16
Interest coverage	x	2.0	2.4
Debt to equity ratio	x	0.1	0.1
Return on assets	%	5.2	4.7
Return on equity	%	11.4	10.7
Return on capital employed	%	32.4	27.2

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

NATIONAL FERT Share Price Performance

Over the last one year, NATIONAL FERT share price has moved down from Rs 76.7 to Rs 54.0, registering a loss of Rs 22.7 or around 29.6%.

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

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

Read: Latest Annual Report Analysis of NATIONAL FERT