SHANTHI GEARS 2018-19 Annual Report Analysis

Sun, 31 Mar

SHANTHI GEARS 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.

SHANTHI GEARS Income Statement Analysis

• Operating income during the year rose 15.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 11.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 17.0% in FY19 as against 17.7% in FY18.
• Depreciation charges decreased by 31.7% and finance costs decreased by 6.7% YoY, respectively.
• Other income grew by 1.0% YoY.
• Net profit for the year grew by 16.7% YoY.
• Net profit margins during the year grew from 13.7% in FY18 to 13.8% in FY19.

SHANTHI GEARS Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	2,087	2,417	15.8%
Other income	Rs m	119	120	1.0%
Total Revenues	Rs m	2,206	2,537	15.0%
Gross profit	Rs m	370	412	11.4%
Depreciation	Rs m	156	106	-31.7%
Interest	Rs m	2	1	-6.7%
Profit before tax	Rs m	332	425	28.0%
Tax	Rs m	46	91	98.5%
Profit after tax	Rs m	286	334	16.7%
Gross profit margin	%	17.7	17.0
Effective tax rate	%	13.8	21.5
Net profit margin	%	13.7	13.8

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SHANTHI GEARS Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 504 million as compared to Rs 413 million in FY18, thereby witnessing an increase of 22.0%.
• Current assets fell 4% and stood at Rs 3 billion, while fixed assets rose 5% and stood at Rs 787 million in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 3 billion as against Rs 4 billion during FY18, thereby witnessing a fall of 2%.

SHANTHI GEARS Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	3,178	3,021	-4.9
Current Liabilities	Rs m	413	504	22.0
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	3,541	3,477	-1.8
Current assets	Rs m	2,788	2,690	-3.5
Fixed Assets	Rs m	753	787	4.5
Total Assets	Rs m	3,541	3,477	-1.8

SHANTHI GEARS Cash Flow Statement Analysis

• SHANTHI GEARS's cash flow from operating activities (CFO) during FY19 stood at Rs 272 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs 404 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -493 million on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 183 million from the Rs -11 million net cash flows seen during FY18.

SHANTHI GEARS Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	563	272	-51.8%
Cash Flow from Investing Activities	Rs m	-402	404	-
Cash Flow from Financing Activities	Rs m	-172	-493	-
Net Cash Flow	Rs m	-11	183	-

Current Valuations for SHANTHI GEARS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 4.1, an improvement from the EPS of Rs 3.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 131.6, stands at 30.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.3 times, while the price to sales ratio stands at 4.4 times.
• The company's price to cash flow (P/CF) ratio stood at 23.7 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	25.5	29.6
TTM Earnings per share	Rs	3.5	4.1
Diluted earnings per share	Rs	3.7	4.3
Price to Cash Flow	x	22.5	23.7
TTM P/E ratio	x	34.7	30.3
Price / Book Value ratio	x	3.7	3.5
Market Cap	Rs m	11,812	10,441
Dividends per share (Unadj.)	Rs	1.0	6.0

Ratio Analysis for SHANTHI GEARS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 5.3x during FY19, from 6.8x 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 improved and stood at 304.3x during FY19, from 222.1x 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 11.0% during FY19, from 9.0% 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 14.1% during FY19, from 10.5% 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 9.6% during FY19, from 8.1% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	6.8	5.3
Debtors’ Days	Days	10	9
Interest coverage	x	222.1	304.3
Debt to equity ratio	x	0.0	0.0
Return on assets	%	8.1	9.6
Return on equity	%	9.0	11.0
Return on capital employed	%	10.5	14.1

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

SHANTHI GEARS Share Price Performance

Over the last one year, SHANTHI GEARS share price has moved up from Rs 129.2 to Rs 131.6, registering a gain of Rs 2.4 or around 1.9%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 18,472.0 (up 0.5%). Over the last one year it has moved down from 18,476.7 to 18,472.0, a loss of 5 points (down 0.0%).

Overall, the S&P BSE SENSEX is up 16.3% over the year.

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

Read: Latest Annual Report Analysis of SHANTHI GEARS