SAIL 2017-18 Annual Report Analysis

Sat, 31 Mar

SAIL 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.

SAIL Income Statement Analysis

• Operating income during the year rose 43.3% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 3215.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 8.3% in FY18 as against 0.4% in FY17.
• Depreciation charges increased by 14.3% and finance costs increased by 11.7% YoY, respectively.
• Other income declined by 7.6% YoY.
• Net profit for the year declined by 80.8% YoY.
• Net profit margins during the year grew from 7.5% in FY17 to 1.0% in FY18.

SAIL Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	391,746	561,539	43.3%
Other income	Rs m	4,495	4,152	-7.6%
Total Revenues	Rs m	396,241	565,691	42.8%
Gross profit	Rs m	-1,497	46,620	-3,215.3%
Depreciation	Rs m	26,816	30,660	14.3%
Interest	Rs m	25,278	28,228	11.7%
Profit before tax	Rs m	-49,096	-8,115	-83.5%
Tax	Rs m	-19,595	-2,452	-87.5%
Profit after tax	Rs m	-29,501	-5,663	-80.8%
Gross profit margin	%	-0.4	8.3
Effective tax rate	%	39.9	30.2
Net profit margin	%	-7.5	-1.0

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SAIL Balance Sheet Analysis

• The company's current liabilities during FY18 down at Rs 434 billion as compared to Rs 464 billion in FY17, thereby witnessing an decrease of -6.3%.
• Long-term debt stood at Rs 298 billion as compared to Rs 191 billion during FY17, a growth of 56.0%.
• Current assets rose 16% and stood at Rs 298 billion, while fixed assets rose 4% and stood at Rs 815 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 1,113 billion as against Rs 1,038 billion during FY17, thereby witnessing a growth of 7%.

SAIL Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	370,423	369,467	-0.3
Current Liabilities	Rs m	463,645	434,324	-6.3
Long-term Debt	Rs m	190,875	297,772	56.0
Total Liabilities	Rs m	1,037,665	1,112,927	7.3
Current assets	Rs m	256,882	297,631	15.9
Fixed Assets	Rs m	780,783	815,296	4.4
Total Assets	Rs m	1,037,665	1,112,927	7.3

SAIL Cash Flow Statement Analysis

• SAIL's cash flow from operating activities (CFO) during FY18 stood at Rs 62 billion, an improvement of 185.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -65 billion, an improvement of 18.5% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs 3 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -466 million from the Rs -45 million net cash flows seen during FY17.

SAIL 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	21,601	61,635	185.3%
Cash Flow from Investing Activities	Rs m	-54,668	-64,796	-
Cash Flow from Financing Activities	Rs m	33,021	2,694	-91.8%
Net Cash Flow	Rs m	-45	-466	-

Current Valuations for SAIL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -1.4, an improvement from the EPS of Rs -7.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 70.2, stands at -60.2 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 0.5 times.
• The company's price to cash flow (P/CF) ratio stood at 12.8 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	94.8	135.9
TTM Earnings per share	Rs	-7.1	-1.4
Diluted earnings per share	Rs	-7.1	-1.4
Price to Cash Flow	x	-94.2	12.8
TTM P/E ratio	x	-8.9	-60.2
Price / Book Value ratio	x	0.6	0.9
Market Cap	Rs m	220,260	318,877
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for SAIL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.7x during FY18, from 0.6x 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 improved and stood at 0.7x during FY18, from -0.9x 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 -1.5% during FY18, from -8.0% 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 3.0% during FY18, from -4.2% 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 2.0% during FY18, from -0.4% 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	0.6	0.7
Debtors’ Days	Days	3	3
Interest coverage	x	-0.9	0.7
Debt to equity ratio	x	0.5	0.8
Return on assets	%	-0.4	2.0
Return on equity	%	-8.0	-1.5
Return on capital employed	%	-4.2	3.0

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

SAIL Share Price Performance

Over the last one year, SAIL share price has moved up from Rs 61.2 to Rs 70.2, registering a gain of Rs 9.0 or around 14.7%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 13,322.0 (down 2.0%). Over the last one year it has moved up from 11,804.5 to 13,322.0, a gain of 1,518 points (up 12.9%).

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

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

Read: Latest Annual Report Analysis of SAIL