PATEL ENGINEERING 2018-19 Annual Report Analysis

Sun, 31 Mar

PATEL ENGINEERING 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.

PATEL ENGINEERING Income Statement Analysis

• Operating income during the year fell 43.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 13.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 20.3% in FY19 as against 10.0% in FY18.
• Depreciation charges decreased by 7.5% and finance costs decreased by 24.3% YoY, respectively.
• Other income declined by 27.8% YoY.
• Net profit for the year grew by 52.1% YoY.
• Net profit margins during the year grew from 2.7% in FY18 to 7.2% in FY19.

PATEL ENGINEERING Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	39,342	22,105	-43.8%
Other income	Rs m	2,426	1,751	-27.8%
Total Revenues	Rs m	41,768	23,856	-42.9%
Gross profit	Rs m	3,946	4,493	13.8%
Depreciation	Rs m	543	502	-7.5%
Interest	Rs m	4,894	3,703	-24.3%
Profit before tax	Rs m	935	2,039	118.0%
Tax	Rs m	-113	445	-494.8%
Profit after tax	Rs m	1,048	1,594	52.1%
Gross profit margin	%	10.0	20.3
Effective tax rate	%	-12.0	21.8
Net profit margin	%	2.7	7.2

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PATEL ENGINEERING Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 38 billion as compared to Rs 35 billion in FY18, thereby witnessing an increase of 7.9%.
• Long-term debt down at Rs 13 billion as compared to Rs 13 billion during FY18, a fall of 2.1%.
• Current assets rose 8% and stood at Rs 48 billion, while fixed assets rose 16% and stood at Rs 34 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 83 billion as against Rs 75 billion during FY18, thereby witnessing a growth of 11%.

PATEL ENGINEERING Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	21,597	22,758	5.4
Current Liabilities	Rs m	35,222	37,999	7.9
Long-term Debt	Rs m	13,324	13,048	-2.1
Total Liabilities	Rs m	74,945	82,864	10.6
Current assets	Rs m	44,759	48,401	8.1
Fixed Assets	Rs m	29,790	34,464	15.7
Total Assets	Rs m	74,945	82,864	10.6

PATEL ENGINEERING Cash Flow Statement Analysis

• PATEL ENGINEERING's cash flow from operating activities (CFO) during FY19 stood at Rs 8 billion, an improvement of 107.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -3 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -5 billion, an improvement of 11% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -45 million from the Rs 704 million net cash flows seen during FY18.

PATEL ENGINEERING 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	4,033	8,357	107.2%
Cash Flow from Investing Activities	Rs m	2,446	-3,274	-
Cash Flow from Financing Activities	Rs m	-5,775	-5,127	-
Net Cash Flow	Rs m	704	-45	-

Current Valuations for PATEL ENGINEERING

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 9.7, an improvement from the EPS of Rs 6.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 25.5, stands at 14.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.5 times, while the price to sales ratio stands at 0.2 times.
• The company's price to cash flow (P/CF) ratio stood at 3.6 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	250.6	134.6
TTM Earnings per share	Rs	6.7	9.7
Diluted earnings per share	Rs	2.2	3.3
Price to Cash Flow	x	18.2	3.6
TTM P/E ratio	x	48.9	14.7
Price / Book Value ratio	x	0.6	0.3
Market Cap	Rs m	13,109	7,580
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for PATEL ENGINEERING

• Solvency Ratios

Current Ratio: The company's current ratio improved 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 1.6x during FY19, from 1.2x 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 7.0% during FY19, from 4.9% 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 16.0% during FY19, from 16.7% 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 6.4% during FY19, from 7.9% 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	38
Interest coverage	x	1.2	1.6
Debt to equity ratio	x	0.6	0.6
Return on assets	%	7.9	6.4
Return on equity	%	4.9	7.0
Return on capital employed	%	16.7	16.0

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

PATEL ENGINEERING Share Price Performance

Over the last one year, PATEL ENGINEERING share price has moved down from Rs 60.3 to Rs 25.5, registering a loss of Rs 34.9 or around 57.8%.

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 PATEL ENGINEERING and quarterly results for PATEL ENGINEERING)

Read: Latest Annual Report Analysis of PATEL ENGINEERING