RAIN INDUSTRIES 2017-18 Annual Report Analysis

Mon, 31 Dec

RAIN INDUSTRIES has announced its results for the year ended December 2018. Let us have a look at the detailed performance review of the company during FY17-18.

RAIN INDUSTRIES Income Statement Analysis

• Operating income during the year rose 25.9% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 6.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 14.0% in CY18 as against 18.8% in CY17.
• Depreciation charges increased by 5.6% and finance costs decreased by 23.2% YoY, respectively.
• Other income declined by 63.3% YoY.
• Net profit for the year declined by 20.3% YoY.
• Net profit margins during the year declined from 7.1% in CY17 to 4.5% in CY18.

RAIN INDUSTRIES Income Statement 2017-18

No. of Mths Year Ending		12 Dec-17*	12 Dec-18*	% Change
Net Sales	Rs m	111,568	140,490	25.9%
Other income	Rs m	1,110	408	-63.3%
Total Revenues	Rs m	112,678	140,898	25.0%
Gross profit	Rs m	20,924	19,656	-6.1%
Depreciation	Rs m	5,256	5,551	5.6%
Interest	Rs m	5,947	4,565	-23.2%
Profit before tax	Rs m	10,830	9,948	-8.2%
Tax	Rs m	2,918	3,643	24.8%
Profit after tax	Rs m	7,912	6,305	-20.3%
Gross profit margin	%	18.8	14.0
Effective tax rate	%	26.9	36.6
Net profit margin	%	7.1	4.5

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RAIN INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during CY18 down at Rs 26 billion as compared to Rs 55 billion in CY17, thereby witnessing an decrease of -52.1%.
• Long-term debt stood at Rs 72 billion as compared to Rs 37 billion during CY17, a growth of 93.7%.
• Current assets rose 6% and stood at Rs 52 billion, while fixed assets rose 11% and stood at Rs 103 billion in CY18.
• Overall, the total assets and liabilities for CY18 stood at Rs 155 billion as against Rs 143 billion during CY17, thereby witnessing a growth of 9%.

RAIN INDUSTRIES Balance Sheet as on December 2018

No. of Mths Year Ending		12 Dec-17*	12 Dec-18*	% Change
Networth	Rs m	39,441	46,227	17.2
Current Liabilities	Rs m	55,243	26,436	-52.1
Long-term Debt	Rs m	37,397	72,420	93.7
Total Liabilities	Rs m	142,686	155,457	9.0
Current assets	Rs m	49,568	52,466	5.8
Fixed Assets	Rs m	93,118	102,991	10.6
Total Assets	Rs m	142,686	155,457	9.0

RAIN INDUSTRIES Cash Flow Statement Analysis

• RAIN INDUSTRIES's cash flow from operating activities (CFO) during CY18 stood at Rs 17 billion, an improvement of 96.5% on a YoY basis.
• Cash flow from investing activities (CFI) during CY18 stood at Rs -10 billion, an improvement of 105.0% on a YoY basis.
• Cash flow from financial activities (CFF) during CY18 stood at Rs -6 billion on a YoY basis.
• Overall, net cash flows for the company during CY18 stood at Rs 492 million from the Rs -2 billion net cash flows seen during CY17.

RAIN INDUSTRIES Cash Flow Statement 2017-18

Particulars	No. of months	12	12	% Change
	Year Ending	Dec-17	Dec-18
Cash Flow from Operating Activities	Rs m	8,681	17,055	96.5%
Cash Flow from Investing Activities	Rs m	-5,035	-10,324	-
Cash Flow from Financing Activities	Rs m	-5,205	-6,186	-
Net Cash Flow	Rs m	-1,916	492	-

Current Valuations for RAIN INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 18.7, an decline from the EPS of Rs 23.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 134.3, stands at 7.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.0 times, while the price to sales ratio stands at 0.3 times.
• The company's price to cash flow (P/CF) ratio stood at 8.4 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Dec-17*	12 Dec-18*
Sales per share (Unadj.)	Rs	331.7	417.7
TTM Earnings per share	Rs	23.5	18.7
Diluted earnings per share	Rs	23.5	18.7
Price to Cash Flow	x	9.5	8.4
TTM P/E ratio	x	15.8	7.2
Price / Book Value ratio	x	1.9	2.2
Market Cap	Rs m	76,393	99,642
Dividends per share (Unadj.)	Rs	2.0	1.0

Ratio Analysis for RAIN INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.0x during CY18, from 0.9x during CY17. 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 3.2x during CY18, from 2.8x during CY17. 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 13.6% during CY18, from 20.1% during CY18. 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 12.2% during CY18, from 21.8% during CY17. 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 7.0% during CY18, from 9.7% during CY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Dec-17*	12 Dec-18*
Current ratio	x	0.9	2.0
Debtors’ Days	Days	55	42
Interest coverage	x	2.8	3.2
Debt to equity ratio	x	0.9	1.6
Return on assets	%	9.7	7.0
Return on equity	%	20.1	13.6
Return on capital employed	%	21.8	12.2

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

RAIN INDUSTRIES Share Price Performance

Over the last one year, RAIN INDUSTRIES share price has moved up from Rs 109.2 to Rs 374.1, registering a gain of Rs 265.0 or around 242.7%.

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

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

Read: Latest Annual Report Analysis of RAIN INDUSTRIES