NMDC LTD 2018-19 Annual Report Analysis

Mon, 9 Sep

NMDC LTD 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.

NMDC LTD Income Statement Analysis

• Operating income during the year rose 4.6% on a year-on-year (YoY) basis.
• The company's operating profit increased by 19.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 57.0% in FY19 as against 50.0% in FY18.
• Depreciation charges increased by 8.7% and finance costs increased by 8.7% YoY, respectively.
• Other income grew by 12.6% YoY.
• Net profit for the year grew by 21.3% YoY.
• Net profit margins during the year grew from 31.4% in FY18 to 36.2% in FY19.

NMDC LTD Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	116,149	121,527	4.6%
Other income	Rs m	5,232	5,890	12.6%
Total Revenues	Rs m	121,381	127,416	5.0%
Gross profit	Rs m	58,033	69,244	19.3%
Depreciation	Rs m	2,566	2,790	8.7%
Interest	Rs m	371	403	8.7%
Profit before tax	Rs m	60,328	71,940	19.2%
Tax	Rs m	23,733	25,565	7.7%
Profit after tax	Rs m	38,085	46,184	21.3%
Gross profit margin	%	50.0	57.0
Effective tax rate	%	39.3	35.5
Net profit margin	%	31.4	36.2

NMDC LTD Balance Sheet Analysis

• The company's current liabilities during FY19 down at Rs 31 billion as compared to Rs 35 billion in FY18, thereby witnessing an decrease of -13.5%.
• Current assets fell 10% and stood at Rs 80 billion, while fixed assets rose 8% and stood at Rs 173 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 299 billion as against Rs 287 billion during FY18, thereby witnessing a growth of 4%.

NMDC LTD Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	244,174	260,440	6.7
Current Liabilities	Rs m	35,449	30,648	-13.5
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	286,913	298,919	4.2
Current assets	Rs m	88,643	79,773	-10.0
Fixed Assets	Rs m	160,023	173,313	8.3
Total Assets	Rs m	286,913	298,919	4.2

NMDC LTD Cash Flow Statement Analysis

• NMDC LTD's cash flow from operating activities (CFO) during FY19 stood at Rs 41 billion, an improvement of 21.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -8 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -33 billion on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 113 million from the Rs -458 million net cash flows seen during FY18.

NMDC LTD 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	33,763	40,966	21.3%
Cash Flow from Investing Activities	Rs m	-18,649	-7,892	-
Cash Flow from Financing Activities	Rs m	-15,572	-32,961	-
Net Cash Flow	Rs m	-458	113	-

Current Valuations for NMDC LTD

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 15.1, an improvement from the EPS of Rs 12.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 83.9, stands at 6.9 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 2.7 times.
• The company's price to cash flow (P/CF) ratio stood at 6.8 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	36.7	39.7
TTM Earnings per share	Rs	12.0	15.1
Diluted earnings per share	Rs	9.6	11.6
Price to Cash Flow	x	6.5	6.8
TTM P/E ratio	x	5.5	6.9
Price / Book Value ratio	x	1.7	1.3
Market Cap	Rs m	265,293	332,442
Dividends per share (Unadj.)	Rs	4.3	5.5

Ratio Analysis for NMDC LTD

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.6x during FY19, from 2.5x 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 179.4x during FY19, from 163.6x 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 17.7% during FY19, from 15.6% 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 27.7% during FY19, from 25.5% 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 15.6% during FY19, from 13.4% 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	2.5	2.6
Debtors’ Days	Days	46	43
Interest coverage	x	163.6	179.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	13.4	15.6
Return on equity	%	15.6	17.7
Return on capital employed	%	25.5	27.7

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

NMDC LTD Share Price Performance

Over the last one year, NMDC LTD share price has moved down from Rs 119.1 to Rs 83.9, registering a loss of Rs 35.3 or around 29.6%.

Overall, the S&P BSE SENSEX is down 2.7% over the year.

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