RCF 2018-19 Annual Report Analysis

Fri, 18 Oct

RCF 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.

RCF Income Statement Analysis

• Operating income during the year rose 22.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 64.4% YoY during the fiscal. Operating profit margins witnessed a growth and stood at 4.9% in FY19 as against 3.7% in FY18.
• Depreciation charges increased by 13.6% and finance costs increased by 149.0% YoY, respectively.
• Other income grew by 30.1% YoY.
• Net profit for the year grew by 70.1% YoY.
• Net profit margins during the year grew from 1.1% in FY18 to 1.5% in FY19.

RCF Income Statement 2018-19

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RCF Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 47 billion as compared to Rs 23 billion in FY18, thereby witnessing an increase of 102.2%.
• Long-term debt stood at Rs 4 billion as compared to Rs 3 billion during FY18, a growth of 32.8%.
• Current assets rose 63% and stood at Rs 63 billion, while fixed assets rose 8% and stood at Rs 22 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 89 billion as against Rs 63 billion during FY18, thereby witnessing a growth of 41%.

RCF Balance Sheet as on March 2019

RCF Cash Flow Statement Analysis

• RCF's cash flow from operating activities (CFO) during FY19 stood at Rs -16 billion 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 19 billion, an improvement of 431% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -17 million from the Rs -51 million net cash flows seen during FY18.

RCF Cash Flow Statement 2018-19

Current Valuations for RCF

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 2.4, an improvement from the EPS of Rs 1.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 49.7, stands at 22.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.2 times, while the price to sales ratio stands at 0.4 times.
• The company's price to cash flow (P/CF) ratio stood at 9.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

Ratio Analysis for RCF

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.3x during FY19, from 1.7x 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 deteriorated and stood at 2.3x during FY19, from 3.1x 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 4.4% during FY19, from 2.7% 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 improved and stood at 11.2% during FY19, from 5.9% 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 improved and stood at 3.3% during FY19, from 2.2% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

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 down from Rs 61.1 to Rs 49.7, registering a loss of Rs 11.4 or around 18.6%.

Overall, the S&P BSE SENSEX is up 12.8% over the year.

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