RSWM 2017-18 Annual Report Analysis

Sat, 31 Mar

RSWM 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.

RSWM Income Statement Analysis

• Operating income during the year fell 1.4% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 30.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 7.7% in FY18 as against 11.0% in FY17.
• Depreciation charges decreased by 5.8% and finance costs increased by 6.3% YoY, respectively.
• Other income grew by 14.6% YoY.
• Net profit for the year declined by 85.6% YoY.
• Net profit margins during the year declined from 3.4% in FY17 to 0.5% in FY18.

RSWM Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	29,771	29,364	-1.4%
Other income	Rs m	316	362	14.6%
Total Revenues	Rs m	30,086	29,726	-1.2%
Gross profit	Rs m	3,263	2,269	-30.5%
Depreciation	Rs m	1,322	1,245	-5.8%
Interest	Rs m	1,104	1,173	6.3%
Profit before tax	Rs m	1,153	213	-81.5%
Tax	Rs m	144	68	-52.5%
Profit after tax	Rs m	1,010	145	-85.6%
Gross profit margin	%	11.0	7.7
Effective tax rate	%	12.5	32.0
Net profit margin	%	3.4	0.5

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RSWM Balance Sheet Analysis

• The company's current liabilities during FY18 down at Rs 12 billion as compared to Rs 13 billion in FY17, thereby witnessing an decrease of -7.1%.
• Long-term debt stood at Rs 6 billion as compared to Rs 5 billion during FY17, a growth of 14.9%.
• Current assets rose 0% and stood at Rs 12 billion, while fixed assets rose 18% and stood at Rs 16 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 28 billion as against Rs 26 billion during FY17, thereby witnessing a growth of 10%.

RSWM Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	7,083	9,824	38.7
Current Liabilities	Rs m	12,607	11,713	-7.1
Long-term Debt	Rs m	4,969	5,709	14.9
Total Liabilities	Rs m	25,689	28,235	9.9
Current assets	Rs m	11,748	11,774	0.2
Fixed Assets	Rs m	13,941	16,461	18.1
Total Assets	Rs m	25,689	28,235	9.9

RSWM Cash Flow Statement Analysis

• RSWM'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 -607 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -969 million on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 79 million from the Rs 0 million net cash flows seen during FY17.

RSWM 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	2,220	1,656	-25.4%
Cash Flow from Investing Activities	Rs m	-1,540	-607	-
Cash Flow from Financing Activities	Rs m	-679	-969	-
Net Cash Flow	Rs m	0	79	17,080.4%

Current Valuations for RSWM

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 6.2, an decline from the EPS of Rs 42.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 329.9, stands at 53.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.8 times, while the price to sales ratio stands at 0.3 times.
• The company's price to cash flow (P/CF) ratio stood at 6.5 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	1,264.1	1,246.9
TTM Earnings per share	Rs	42.9	6.2
Diluted earnings per share	Rs	42.9	6.2
Price to Cash Flow	x	4.4	6.5
TTM P/E ratio	x	11.4	53.6
Price / Book Value ratio	x	1.3	0.9
Market Cap	Rs m	9,491	8,972
Dividends per share (Unadj.)	Rs	12.5	2.0

Ratio Analysis for RSWM

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.0x during FY18, from 0.9x 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 1.2x during FY18, from 2.0x 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 1.5% during FY18, from 14.3% 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 8.9% during FY18, from 18.7% 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 4.7% during FY18, from 8.2% 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	0.9	1.0
Debtors’ Days	Days	466	545
Interest coverage	x	2.0	1.2
Debt to equity ratio	x	0.7	0.6
Return on assets	%	8.2	4.7
Return on equity	%	14.3	1.5
Return on capital employed	%	18.7	8.9

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

RSWM Share Price Performance

Over the last one year, RSWM share price has moved down from Rs 435.0 to Rs 329.9, registering a loss of Rs 105.1 or around 24.2%.

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

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