PIDILITE INDUSTRIES 2017-18 Annual Report Analysis

Sat, 31 Mar

PIDILITE INDUSTRIES 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.

PIDILITE INDUSTRIES Income Statement Analysis

• Operating income during the year rose 14.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 6.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 22.6% in FY18 as against 24.4% in FY17.
• Depreciation charges increased by 4.1% and finance costs increased by 11.6% YoY, respectively.
• Other income grew by 32.2% YoY.
• Net profit for the year grew by 12.1% YoY.
• Net profit margins during the year declined from 16.6% in FY17 to 16.2% in FY18.

PIDILITE INDUSTRIES Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	51,713	59,381	14.8%
Other income	Rs m	1,123	1,484	32.2%
Total Revenues	Rs m	52,835	60,865	15.2%
Gross profit	Rs m	12,598	13,412	6.5%
Depreciation	Rs m	1,151	1,199	4.1%
Interest	Rs m	139	155	11.6%
Profit before tax	Rs m	12,430	13,542	8.9%
Tax	Rs m	3,851	3,927	2.0%
Profit after tax	Rs m	8,579	9,615	12.1%
Gross profit margin	%	24.4	22.6
Effective tax rate	%	31.0	29.0
Net profit margin	%	16.6	16.2

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PIDILITE INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 12 billion as compared to Rs 10 billion in FY17, thereby witnessing an increase of 18.2%.
• Long-term debt stood at Rs 71 million as compared to Rs 49 million during FY17, a growth of 46.6%.
• Current assets rose 6% and stood at Rs 33 billion, while fixed assets rose 15% and stood at Rs 19 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 52 billion as against Rs 48 billion during FY17, thereby witnessing a growth of 9%.

PIDILITE INDUSTRIES Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	34,599	35,650	3.0
Current Liabilities	Rs m	10,224	12,082	18.2
Long-term Debt	Rs m	49	71	46.6
Total Liabilities	Rs m	47,704	51,986	9.0
Current assets	Rs m	31,340	33,088	5.6
Fixed Assets	Rs m	16,364	18,898	15.5
Total Assets	Rs m	47,704	51,986	9.0

PIDILITE INDUSTRIES Cash Flow Statement Analysis

• PIDILITE INDUSTRIES's cash flow from operating activities (CFO) during FY18 stood at Rs 8 billion, an improvement of 0.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs 393 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -8 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 468 million from the Rs -435 million net cash flows seen during FY17.

PIDILITE INDUSTRIES 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	7,938	7,964	0.3%
Cash Flow from Investing Activities	Rs m	-8,790	393	-
Cash Flow from Financing Activities	Rs m	407	-7,898	-
Net Cash Flow	Rs m	-435	468	-

Current Valuations for PIDILITE INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 18.9, an improvement from the EPS of Rs 16.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 918.5, stands at 48.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 11.9 times, while the price to sales ratio stands at 7.1 times.
• The company's price to cash flow (P/CF) ratio stood at 39.1 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	100.9	116.9
TTM Earnings per share	Rs	16.7	18.9
Diluted earnings per share	Rs	16.9	18.9
Price to Cash Flow	x	36.5	39.1
TTM P/E ratio	x	41.3	48.3
Price / Book Value ratio	x	10.0	11.9
Market Cap	Rs m	347,214	423,336
Dividends per share (Unadj.)	Rs	4.8	6.0

Ratio Analysis for PIDILITE INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.7x during FY18, from 3.1x 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 deteriorated and stood at 88.1x during FY18, from 90.2x 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 improved and stood at 27.0% during FY18, from 24.8% 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 improved and stood at 38.3% during FY18, from 36.3% 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 improved and stood at 18.8% during FY18, from 18.3% 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	3.1	2.7
Debtors’ Days	Days	5	6
Interest coverage	x	90.2	88.1
Debt to equity ratio	x	0.0	0.0
Return on assets	%	18.3	18.8
Return on equity	%	24.8	27.0
Return on capital employed	%	36.3	38.3

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

PIDILITE INDUSTRIES Share Price Performance

Over the last one year, PIDILITE INDUSTRIES share price has moved up from Rs 698.8 to Rs 918.5, registering a gain of Rs 219.7 or around 31.4%.

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

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

Read: Latest Annual Report Analysis of PIDILITE INDUSTRIES