SALZER ELEC 2017-18 Annual Report Analysis

Sat, 31 Mar

SALZER ELEC 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.

SALZER ELEC Income Statement Analysis

• Operating income during the year rose 32.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 20.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 12.3% in FY18 as against 13.5% in FY17.
• Depreciation charges increased by 18.4% and finance costs increased by 2.2% YoY, respectively.
• Other income declined by 43.0% YoY.
• Net profit for the year grew by 15.4% YoY.
• Net profit margins during the year declined from 5.3% in FY17 to 4.6% in FY18.

SALZER ELEC Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	3,263	4,322	32.5%
Other income	Rs m	54	31	-43.0%
Total Revenues	Rs m	3,317	4,353	31.2%
Gross profit	Rs m	441	533	20.7%
Depreciation	Rs m	89	105	18.4%
Interest	Rs m	146	149	2.2%
Profit before tax	Rs m	261	309	18.5%
Tax	Rs m	88	109	24.7%
Profit after tax	Rs m	173	200	15.4%
Gross profit margin	%	13.5	12.3
Effective tax rate	%	33.6	35.3
Net profit margin	%	5.3	4.6

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SALZER ELEC Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 2 billion as compared to Rs 2 billion in FY17, thereby witnessing an increase of 23.7%.
• Long-term debt down at Rs 77 million as compared to Rs 118 million during FY17, a fall of 35.3%.
• Current assets rose 21% and stood at Rs 3 billion, while fixed assets rose 15% and stood at Rs 2 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 5 billion as against Rs 5 billion during FY17, thereby witnessing a growth of 18%.

SALZER ELEC Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	2,320	2,698	16.3
Current Liabilities	Rs m	1,912	2,366	23.7
Long-term Debt	Rs m	118	77	-35.3
Total Liabilities	Rs m	4,539	5,372	18.4
Current assets	Rs m	2,712	3,279	20.9
Fixed Assets	Rs m	1,827	2,093	14.6
Total Assets	Rs m	4,539	5,372	18.4

SALZER ELEC Cash Flow Statement Analysis

• SALZER ELEC's cash flow from operating activities (CFO) during FY18 stood at Rs 42 million, an improvement of 359.9% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -326 million, an improvement of 142.2% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs 261 million, an improvement of 110% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -104 million from the Rs -69 million net cash flows seen during FY17.

SALZER ELEC 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	9	42	359.9%
Cash Flow from Investing Activities	Rs m	-135	-326	-
Cash Flow from Financing Activities	Rs m	124	261	109.8%
Net Cash Flow	Rs m	-69	-104	-

Current Valuations for SALZER ELEC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 13.3, an improvement from the EPS of Rs 12.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 198.9, stands at 15.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.2 times, while the price to sales ratio stands at 0.7 times.
• The company's price to cash flow (P/CF) ratio stood at 10.2 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	227.4	288.1
TTM Earnings per share	Rs	12.1	13.3
Diluted earnings per share	Rs	10.9	12.5
Price to Cash Flow	x	11.3	10.2
TTM P/E ratio	x	17.7	15.9
Price / Book Value ratio	x	1.3	1.2
Market Cap	Rs m	3,107	3,123
Dividends per share (Unadj.)	Rs	1.6	1.6

Ratio Analysis for SALZER ELEC

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.4x during FY18, from 1.4x 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 3.1x during FY18, from 2.8x 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 7.4% during FY18, from 7.5% 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 16.5% during FY18, from 16.7% 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 6.5% during FY18, from 7.0% 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	1.4	1.4
Debtors’ Days	Days	1,309	993
Interest coverage	x	2.8	3.1
Debt to equity ratio	x	0.1	0.0
Return on assets	%	7.0	6.5
Return on equity	%	7.5	7.4
Return on capital employed	%	16.7	16.5

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

SALZER ELEC Share Price Performance

Over the last one year, SALZER ELEC share price has moved up from Rs 186.3 to Rs 198.9, registering a gain of Rs 12.6 or around 6.8%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 18,476.7 (down 0.1%). Over the last one year it has moved up from 16,446.0 to 18,476.7, a gain of 2,031 points (up 12.3%).

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

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

Read: Latest Annual Report Analysis of SALZER ELEC