PRIME FOCUS 2017-18 Annual Report Analysis

Sat, 31 Mar

PRIME FOCUS 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.

PRIME FOCUS Income Statement Analysis

• Operating income during the year rose 4.8% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 17.8% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 18.4% in FY18 as against 23.5% in FY17.
• Depreciation charges increased by 8.9% and finance costs increased by 23.4% YoY, respectively.
• Other income grew by 40.9% YoY.
• Net profit for the year declined by 146.4% YoY.
• Net profit margins during the year declined from 4.4% in FY17 to 2.0% in FY18.

PRIME FOCUS Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	21,536	22,575	4.8%
Other income	Rs m	245	344	40.9%
Total Revenues	Rs m	21,781	22,919	5.2%
Gross profit	Rs m	5,067	4,164	-17.8%
Depreciation	Rs m	2,546	2,773	8.9%
Interest	Rs m	1,720	2,123	23.4%
Profit before tax	Rs m	1,046	-388	-137.1%
Tax	Rs m	90	56	-37.2%
Profit after tax	Rs m	956	-444	-146.4%
Gross profit margin	%	23.5	18.4
Effective tax rate	%	8.6	-14.5
Net profit margin	%	4.4	-2.0

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PRIME FOCUS Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 15 billion as compared to Rs 12 billion in FY17, thereby witnessing an increase of 20.4%.
• Long-term debt stood at Rs 9 billion as compared to Rs 9 billion during FY17, a growth of 1.9%.
• Current assets rose 13% and stood at Rs 10 billion, while fixed assets rose 1% and stood at Rs 25 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 34 billion as against Rs 33 billion during FY17, thereby witnessing a growth of 4%.

PRIME FOCUS Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	4,905	4,109	-16.2
Current Liabilities	Rs m	12,372	14,891	20.4
Long-term Debt	Rs m	9,092	9,269	1.9
Total Liabilities	Rs m	33,012	34,394	4.2
Current assets	Rs m	8,714	9,812	12.6
Fixed Assets	Rs m	24,298	24,582	1.2
Total Assets	Rs m	33,012	34,394	4.2

PRIME FOCUS Cash Flow Statement Analysis

• PRIME FOCUS'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 -4 billion, an improvement of 328.6% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs 1 billion, an improvement of 179% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -265 million from the Rs 152 million net cash flows seen during FY17.

PRIME FOCUS 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	2,912	2,007	-31.1%
Cash Flow from Investing Activities	Rs m	-874	-3,744	-
Cash Flow from Financing Activities	Rs m	-1,872	1,472	-
Net Cash Flow	Rs m	152	-265	-

Current Valuations for PRIME FOCUS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -1.5, an decline from the EPS of Rs 3.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 84.2, stands at -56.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.1 times, while the price to sales ratio stands at 1.1 times.
• The company's price to cash flow (P/CF) ratio stood at 13.9 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	72.1	75.5
TTM Earnings per share	Rs	3.2	-1.5
Diluted earnings per share	Rs	3.2	-1.5
Price to Cash Flow	x	7.2	13.9
TTM P/E ratio	x	68.7	-56.8
Price / Book Value ratio	x	4.2	7.9
Market Cap	Rs m	20,839	32,310
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for PRIME FOCUS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.7x during FY18, from 0.7x 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 0.8x during FY18, from 1.6x 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 -10.8% during FY18, from 19.5% 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 13.0% during FY18, from 19.8% 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 4.9% during FY18, from 8.1% 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	0.7	0.7
Debtors’ Days	Days	5	6
Interest coverage	x	1.6	0.8
Debt to equity ratio	x	1.9	2.3
Return on assets	%	8.1	4.9
Return on equity	%	19.5	-10.8
Return on capital employed	%	19.8	13.0

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

PRIME FOCUS Share Price Performance

Over the last one year, PRIME FOCUS share price has moved up from Rs 83.9 to Rs 84.2, registering a gain of Rs 0.4 or around 0.4%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 6,513.3 (down 0.7%). Over the last one year it has moved up from 5,771.5 to 6,513.3, a gain of 742 points (up 12.9%).

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

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

Read: Latest Annual Report Analysis of PRIME FOCUS