SHREE CEMENT 2018-19 Annual Report Analysis

Sun, 31 Mar

SHREE CEMENT 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.

SHREE CEMENT Income Statement Analysis

• Operating income during the year rose 32.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 5.8% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 20.8% in FY19 as against 26.0% in FY18.
• Depreciation charges increased by 63.6% and finance costs increased by 83.2% YoY, respectively.
• Other income declined by 35.8% YoY.
• Net profit for the year declined by 26.7% YoY.
• Net profit margins during the year declined from 14.6% in FY18 to 8.1% in FY19.

SHREE CEMENT Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	95,067	125,547	32.1%
Other income	Rs m	3,891	2,498	-35.8%
Total Revenues	Rs m	98,958	128,044	29.4%
Gross profit	Rs m	24,728	26,156	5.8%
Depreciation	Rs m	8,994	14,718	63.6%
Interest	Rs m	1,353	2,479	83.2%
Profit before tax	Rs m	18,271	11,456	-37.3%
Tax	Rs m	4,430	1,306	-70.5%
Profit after tax	Rs m	13,842	10,151	-26.7%
Gross profit margin	%	26.0	20.8
Effective tax rate	%	24.2	11.4
Net profit margin	%	14.6	8.1

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SHREE CEMENT Balance Sheet Analysis

• The company's current liabilities during FY19 down at Rs 21 billion as compared to Rs 30 billion in FY18, thereby witnessing an decrease of -28.3%.
• Long-term debt stood at Rs 23 billion as compared to Rs 22 billion during FY18, a growth of 4.6%.
• Current assets fell 17% and stood at Rs 47 billion, while fixed assets rose 14% and stood at Rs 102 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 149 billion as against Rs 146 billion during FY18, thereby witnessing a growth of 2%.

SHREE CEMENT Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	88,967	96,708	8.7
Current Liabilities	Rs m	29,672	21,266	-28.3
Long-term Debt	Rs m	22,081	23,090	4.6
Total Liabilities	Rs m	146,286	148,804	1.7
Current assets	Rs m	57,003	47,192	-17.2
Fixed Assets	Rs m	89,284	101,612	13.8
Total Assets	Rs m	146,286	148,804	1.7

SHREE CEMENT Cash Flow Statement Analysis

• SHREE CEMENT's cash flow from operating activities (CFO) during FY19 stood at Rs 21 billion, an improvement of 10.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -7 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -13 billion on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 842 million from the Rs 102 million net cash flows seen during FY18.

SHREE CEMENT 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	18,787	20,800	10.7%
Cash Flow from Investing Activities	Rs m	-35,947	-7,215	-
Cash Flow from Financing Activities	Rs m	17,262	-12,760	-
Net Cash Flow	Rs m	102	842	724.7%

Current Valuations for SHREE CEMENT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 291.3, an decline from the EPS of Rs 397.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 18,634.7, stands at 70.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 7.0 times, while the price to sales ratio stands at 5.2 times.
• The company's price to cash flow (P/CF) ratio stood at 22.7 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	2,728.7	3,603.5
TTM Earnings per share	Rs	397.3	291.3
Diluted earnings per share	Rs	383.6	281.3
Price to Cash Flow	x	25.6	22.7
TTM P/E ratio	x	42.2	70.7
Price / Book Value ratio	x	7.1	5.8
Market Cap	Rs m	629,857	564,101
Dividends per share (Unadj.)	Rs	50.0	60.0

Ratio Analysis for SHREE CEMENT

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.2x during FY19, from 1.9x 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 5.6x during FY19, from 14.5x 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 declined and down at 10.5% during FY19, from 15.6% 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 declined and down at 11.6% during FY19, from 17.7% 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 declined and down at 8.5% during FY19, from 10.4% 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	1.9	2.2
Debtors’ Days	Days	2	3
Interest coverage	x	14.5	5.6
Debt to equity ratio	x	0.2	0.2
Return on assets	%	10.4	8.5
Return on equity	%	15.6	10.5
Return on capital employed	%	17.7	11.6

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

SHREE CEMENT Share Price Performance

Over the last one year, SHREE CEMENT share price has moved up from Rs 16,181.5 to Rs 18,634.7, registering a gain of Rs 2,453.2 or around 15.2%.

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

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

Read: Latest Annual Report Analysis of SHREE CEMENT