SALZER ELEC 2018-19 Annual Report Analysis

Sun, 31 Mar

SALZER ELEC 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.

SALZER ELEC Income Statement Analysis

• Operating income during the year rose 29.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 19.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 11.4% in FY19 as against 12.3% in FY18.
• Depreciation charges increased by 15.4% and finance costs increased by 33.3% YoY, respectively.
• Other income declined by 77.2% YoY.
• Net profit for the year grew by 19.7% YoY.
• Net profit margins during the year declined from 4.6% in FY18 to 4.3% in FY19.

SALZER ELEC Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	4,322	5,598	29.5%
Other income	Rs m	31	7	-77.2%
Total Revenues	Rs m	4,353	5,605	28.8%
Gross profit	Rs m	533	636	19.4%
Depreciation	Rs m	105	122	15.4%
Interest	Rs m	149	199	33.3%
Profit before tax	Rs m	309	323	4.4%
Tax	Rs m	109	84	-23.5%
Profit after tax	Rs m	200	240	19.7%
Gross profit margin	%	12.3	11.4
Effective tax rate	%	35.3	25.8
Net profit margin	%	4.6	4.3

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SALZER ELEC Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 3 billion as compared to Rs 2 billion in FY18, thereby witnessing an increase of 7.4%.
• Long-term debt down at Rs 42 million as compared to Rs 77 million during FY18, a fall of 45.0%.
• Current assets rose 7% and stood at Rs 3 billion, while fixed assets rose 3% and stood at Rs 2 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 6 billion as against Rs 5 billion during FY18, thereby witnessing a growth of 5%.

SALZER ELEC Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	2,698	2,870	6.4
Current Liabilities	Rs m	2,366	2,540	7.4
Long-term Debt	Rs m	77	42	-45.0
Total Liabilities	Rs m	5,372	5,656	5.3
Current assets	Rs m	3,279	3,497	6.6
Fixed Assets	Rs m	2,093	2,159	3.1
Total Assets	Rs m	5,372	5,656	5.3

SALZER ELEC Cash Flow Statement Analysis

• SALZER ELEC's cash flow from operating activities (CFO) during FY19 stood at Rs 517 million, an improvement of 1,144.0% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -283 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -193 million on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 41 million from the Rs -104 million net cash flows seen during FY18.

SALZER ELEC 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	42	517	1,144.0%
Cash Flow from Investing Activities	Rs m	-326	-283	-
Cash Flow from Financing Activities	Rs m	261	-193	-
Net Cash Flow	Rs m	-104	41	-

Current Valuations for SALZER ELEC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 15.0, an improvement from the EPS of Rs 13.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 117.7, stands at 7.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.7 times, while the price to sales ratio stands at 0.3 times.
• The company's price to cash flow (P/CF) ratio stood at 7.0 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	288.1	350.3
TTM Earnings per share	Rs	13.3	15.0
Diluted earnings per share	Rs	12.5	15.0
Price to Cash Flow	x	10.4	7.0
TTM P/E ratio	x	15.9	7.8
Price / Book Value ratio	x	1.2	0.9
Market Cap	Rs m	3,123	2,518
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 FY19, from 1.4x 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 2.6x during FY19, from 3.1x 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 8.3% during FY19, from 7.4% 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 17.9% during FY19, from 16.5% 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 7.8% during FY19, from 6.5% 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	1.4	1.4
Debtors’ Days	Days	993	954
Interest coverage	x	3.1	2.6
Debt to equity ratio	x	0.0	0.0
Return on assets	%	6.5	7.8
Return on equity	%	7.4	8.3
Return on capital employed	%	16.5	17.9

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 down from Rs 198.9 to Rs 117.7, registering a loss of Rs 81.2 or around 40.8%.

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 SALZER ELEC and quarterly results for SALZER ELEC)

Read: Latest Annual Report Analysis of SALZER ELEC