RCF 2017-18 Annual Report Analysis

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RCF 2017-18 Annual Report Analysis
Fri, 21 Dec

RCF 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.

RCF Income Statement Analysis

  • Operating income during the year rose 2.7% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 36.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 3.7% in FY18 as against 5.9% in FY17.
  • Depreciation charges decreased by 2.9% and finance costs decreased by 33.4% YoY, respectively.
  • Other income declined by 8.6% YoY.
  • Net profit for the year declined by 56.0% YoY.
  • Net profit margins during the year declined from 2.5% in FY17 to 1.1% in FY18.

RCF Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 70,992 72,916 2.7%
Other income Rs m 670 612 -8.6%
Total Revenues Rs m 71,662 73,529 2.6%
Gross profit Rs m 4,168 2,668 -36.0%
Depreciation Rs m 1,411 1,370 -2.9%
Interest Rs m 940 626 -33.4%
Profit before tax Rs m 2,487 1,284 -48.4%
Tax Rs m 695 494 -28.9%
Profit after tax Rs m 1,793 788 -56.0%
Gross profit margin % 5.9 3.7
Effective tax rate % 27.9 38.5
Net profit margin % 2.5 1.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



RCF Balance Sheet Analysis

  • The company's current liabilities during FY18 down at Rs 24 billion as compared to Rs 29 billion in FY17, thereby witnessing an decrease of -16.2%.
  • Long-term debt stood at Rs 3 billion as compared to Rs 1 billion during FY17, a growth of 181.1%.
  • Current assets fell 12% and stood at Rs 40 billion, while fixed assets rose 25% and stood at Rs 21 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 64 billion as against Rs 65 billion during FY17, thereby witnessing a fall of 2%.

RCF Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 29,250 29,297 0.2
 
Current Liabilities Rs m 28,936 24,244 -16.2
Long-term Debt Rs m 1,138 3,201 181.1
Total Liabilities Rs m 65,358 64,206 -1.8
 
Current assets Rs m 45,010 39,684 -11.8
Fixed Assets Rs m 16,541 20,624 24.7
Total Assets Rs m 65,358 64,206 -1.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



RCF Cash Flow Statement Analysis

  • RCF's cash flow from operating activities (CFO) during FY18 stood at Rs 11 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -5 billion, an improvement of 174.9% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -6 billion, an improvement of 58% on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs -51 million from the Rs 90 million net cash flows seen during FY17.

RCF 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 15,954 10,781 -32.4%
Cash Flow from Investing Activities Rs m -1,803 -4,957 -
Cash Flow from Financing Activities Rs m -14,062 -5,875 -
Net Cash Flow Rs m 90 -51 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for RCF

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 1.4, 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 66.5, stands at 41.5 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.7 times, while the price to sales ratio stands at 0.7 times.
  • The company's price to cash flow (P/CF) ratio stood at 17.0 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 128.7 132.2
TTM Earnings per share Rs 3.2 1.4
Diluted earnings per share Rs 3.2 1.4
Price to Cash Flow x 11.4 17.0
TTM P/E ratio x 41.5 41.5
Price / Book Value ratio x 1.2 1.7
Market Cap Rs m 36,660 36,660
Dividends per share (Unadj.) Rs 1.1 0.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for RCF

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 1.6x during FY18, from 1.6x 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 3.1x during FY18, from 3.6x 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 2.7% during FY18, from 6.1% 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 5.9% during FY18, from 11.3% 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 declined and down at 2.2% during FY18, from 4.2% 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 1.6 1.6
Debtors’ Days Days 187 148
Interest coverage x 3.6 3.1
Debt to equity ratio x 0.0 0.1
Return on assets % 4.2 2.2
Return on equity % 6.1 2.7
Return on capital employed % 11.3 5.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

RCF Share Price Performance

Over the last one year, RCF share price has moved up from Rs 94.3 to Rs 66.5, registering a loss of Rs 27.8 or around 29.5%.

Overall, the S&P BSE SENSEX is up 7.8% over the year.

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

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