SKF INDIA 2018-19 Annual Report Analysis

Sun, 31 Mar

SKF INDIA 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.

SKF INDIA Income Statement Analysis

• Operating income during the year rose 12.6% on a year-on-year (YoY) basis.
• The company's operating profit increased by 11.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 16.0% in FY19 as against 16.1% in FY18.
• Depreciation charges increased by 1.4% and finance costs increased by 54.1% YoY, respectively.
• Other income grew by 29.5% YoY.
• Net profit for the year grew by 13.5% YoY.
• Net profit margins during the year grew from 11.0% in FY18 to 11.1% in FY19.

SKF INDIA Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	26,960	30,345	12.6%
Other income	Rs m	714	924	29.5%
Total Revenues	Rs m	27,674	31,269	13.0%
Gross profit	Rs m	4,348	4,859	11.7%
Depreciation	Rs m	457	464	1.4%
Interest	Rs m	50	77	54.1%
Profit before tax	Rs m	4,555	5,242	15.1%
Tax	Rs m	1,596	1,884	18.1%
Profit after tax	Rs m	2,959	3,358	13.5%
Gross profit margin	%	16.1	16.0
Effective tax rate	%	35.0	35.9
Net profit margin	%	11.0	11.1

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SKF INDIA Balance Sheet Analysis

• The company's current liabilities during FY19 down at Rs 6 billion as compared to Rs 6 billion in FY18, thereby witnessing an decrease of -1.9%.
• Current assets fell 10% and stood at Rs 17 billion, while fixed assets rose 5% and stood at Rs 6 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 23 billion as against Rs 24 billion during FY18, thereby witnessing a fall of 6%.

SKF INDIA Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	18,373	16,969	-7.6
Current Liabilities	Rs m	5,784	5,674	-1.9
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	24,263	22,738	-6.3
Current assets	Rs m	18,931	17,113	-9.6
Fixed Assets	Rs m	5,333	5,626	5.5
Total Assets	Rs m	24,263	22,738	-6.3

SKF INDIA Cash Flow Statement Analysis

• SKF INDIA's cash flow from operating activities (CFO) during FY19 stood at Rs 2 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 -5 billion on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 109 million from the Rs -1 billion net cash flows seen during FY18.

SKF INDIA 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	3,672	1,810	-50.7%
Cash Flow from Investing Activities	Rs m	-2,649	3,064	-
Cash Flow from Financing Activities	Rs m	-2,253	-4,765	-
Net Cash Flow	Rs m	-1,230	109	-

Current Valuations for SKF INDIA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 68.0, an improvement from the EPS of Rs 57.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,017.9, stands at 29.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.9 times, while the price to sales ratio stands at 3.3 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	525.1	614.3
TTM Earnings per share	Rs	57.6	68.0
Diluted earnings per share	Rs	59.9	67.9
Price to Cash Flow	x	25.2	23.7
TTM P/E ratio	x	29.1	29.7
Price / Book Value ratio	x	4.9	5.3
Market Cap	Rs m	89,833	90,402
Dividends per share (Unadj.)	Rs	10.0	12.0

Ratio Analysis for SKF INDIA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 3.0x during FY19, from 3.3x 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 69.4x during FY19, from 92.6x 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 19.8% during FY19, from 16.1% 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 31.3% during FY19, from 25.1% 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 15.1% during FY19, from 12.4% 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	3.3	3.0
Debtors’ Days	Days	66	63
Interest coverage	x	92.6	69.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	12.4	15.1
Return on equity	%	16.1	19.8
Return on capital employed	%	25.1	31.3

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

SKF INDIA Share Price Performance

Over the last one year, SKF INDIA share price has moved up from Rs 1,742.7 to Rs 2,017.9, registering a gain of Rs 275.2 or around 15.8%.

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

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

Read: Latest Annual Report Analysis of SKF INDIA