NESCO 2018-19 Annual Report Analysis

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NESCO 2018-19 Annual Report Analysis
Wed, 10 Jul

NESCO 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.

NESCO Income Statement Analysis

  • Operating income during the year rose 12.0% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 5.9% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 64.4% in FY19 as against 68.0% in FY18.
  • Depreciation charges increased by 7.6% and finance costs decreased by 15.9% YoY, respectively.
  • Other income declined by 8.3% YoY.
  • Net profit for the year grew by 1.0% YoY.
  • Net profit margins during the year declined from 50.0% in FY18 to 45.9% in FY19.

NESCO Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 3,212 3,596 12.0%
Other income Rs m 361 331 -8.3%
Total Revenues Rs m 3,572 3,927 9.9%
Gross profit Rs m 2,185 2,314 5.9%
Depreciation Rs m 110 119 7.6%
Interest Rs m 56 47 -15.9%
Profit before tax Rs m 2,379 2,479 4.2%
Tax Rs m 592 675 14.0%
Profit after tax Rs m 1,787 1,804 1.0%
Gross profit margin % 68.0 64.4
Effective tax rate % 24.9 27.2
Net profit margin % 50.0 45.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



NESCO Balance Sheet Analysis

  • The company's current liabilities during FY19 down at Rs 906 million as compared to Rs 1 billion in FY18, thereby witnessing an decrease of -30.1%.
  • Current assets fell 40% and stood at Rs 703 million, while fixed assets rose 23% and stood at Rs 7 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 13 billion as against Rs 12 billion during FY18, thereby witnessing a growth of 14%.

NESCO Balance Sheet as on March 2019

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 10,111 11,705 15.8
 
Current Liabilities Rs m 1,297 906 -30.1
Long-term Debt Rs m 0 0 0.0
Total Liabilities Rs m 11,829 13,487 14.0
 
Current assets Rs m 1,179 703 -40.4
Fixed Assets Rs m 5,855 7,220 23.3
Total Assets Rs m 11,829 13,487 14.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



NESCO Cash Flow Statement Analysis

  • NESCO's cash flow from operating activities (CFO) during FY19 stood at Rs 2 billion, an improvement of 16.8% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs -2 billion, an improvement of 26.0% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY19 stood at Rs -198 million on a YoY basis.
  • Overall, net cash flows for the company during FY19 stood at Rs -37 million from the Rs 43 million net cash flows seen during FY18.

NESCO 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 1,462 1,708 16.8%
Cash Flow from Investing Activities Rs m -1,228 -1,548 -
Cash Flow from Financing Activities Rs m -191 -198 -
Net Cash Flow Rs m 43 -37 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for NESCO

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 25.6, an improvement from the EPS of Rs 25.4 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 557.8, stands at 22.0 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 3.0 times, while the price to sales ratio stands at 9.9 times.
  • The company's price to cash flow (P/CF) ratio stood at 20.4 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 45.6 51.0
TTM Earnings per share Rs 25.4 25.6
Diluted earnings per share Rs 25.4 25.6
Price to Cash Flow x 20.7 20.4
TTM P/E ratio x 22.0 22.0
Price / Book Value ratio x 11.7 3.0
Market Cap Rs m 39,303 39,300
Dividends per share (Unadj.) Rs 2.3 2.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for NESCO

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 0.8x during FY19, from 0.9x 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 53.6x during FY19, from 43.5x 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 declined and down at 15.4% during FY19, from 17.7% 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 21.6% during FY19, from 24.1% 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 13.7% during FY19, from 15.6% 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 0.9 0.8
Debtors’ Days Days 16 18
Interest coverage x 43.5 53.6
Debt to equity ratio x 0.0 0.0
Return on assets % 15.6 13.7
Return on equity % 17.7 15.4
Return on capital employed % 24.1 21.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

NESCO Share Price Performance

Over the last one year, NESCO share price has moved up from Rs 512.6 to Rs 557.8, registering a gain of Rs 45.3 or around 8.8%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 19,221.5 (down 0.1%). Over the last one year it has moved up from 17,936.3 to 19,221.5, a gain of 1,285 points (up 7.2%).

Overall, the S&P BSE SENSEX is up 8.1% over the year.

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

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