SUNDRAM FASTENERS 2017-18 Annual Report Analysis

Sat, 31 Mar

SUNDRAM FASTENERS 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.

SUNDRAM FASTENERS Income Statement Analysis

• Operating income during the year rose 24.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 16.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 17.9% in FY18 as against 19.2% in FY17.
• Depreciation charges increased by 7.5% and finance costs decreased by 2.1% YoY, respectively.
• Other income grew by 50.6% YoY.
• Net profit for the year grew by 14.8% YoY.
• Net profit margins during the year declined from 11.0% in FY17 to 10.2% in FY18.

SUNDRAM FASTENERS Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	30,639	37,983	24.0%
Other income	Rs m	154	232	50.6%
Total Revenues	Rs m	30,793	38,215	24.1%
Gross profit	Rs m	5,867	6,814	16.1%
Depreciation	Rs m	1,045	1,123	7.5%
Interest	Rs m	391	383	-2.1%
Profit before tax	Rs m	4,585	5,539	20.8%
Tax	Rs m	1,203	1,658	37.7%
Profit after tax	Rs m	3,382	3,882	14.8%
Gross profit margin	%	19.2	17.9
Effective tax rate	%	26.2	29.9
Net profit margin	%	11.0	10.2

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SUNDRAM FASTENERS Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 11 billion as compared to Rs 11 billion in FY17, thereby witnessing an increase of 3.8%.
• Long-term debt stood at Rs 2 billion as compared to Rs 2 billion during FY17, a growth of 45.4%.
• Current assets rose 19% and stood at Rs 15 billion, while fixed assets rose 17% and stood at Rs 15 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 30 billion as against Rs 25 billion during FY17, thereby witnessing a growth of 18%.

SUNDRAM FASTENERS Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	12,361	15,311	23.9
Current Liabilities	Rs m	10,514	10,913	3.8
Long-term Debt	Rs m	1,500	2,181	45.4
Total Liabilities	Rs m	25,275	29,871	18.2
Current assets	Rs m	12,206	14,537	19.1
Fixed Assets	Rs m	13,069	15,334	17.3
Total Assets	Rs m	25,275	29,871	18.2

SUNDRAM FASTENERS Cash Flow Statement Analysis

• SUNDRAM FASTENERS's cash flow from operating activities (CFO) during FY18 stood at Rs 5 billion, an improvement of 87.4% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -3 billion, an improvement of 25.2% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -2 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -65 million from the Rs 121 million net cash flows seen during FY17.

SUNDRAM FASTENERS 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	2,436	4,564	87.4%
Cash Flow from Investing Activities	Rs m	-2,358	-2,952	-
Cash Flow from Financing Activities	Rs m	56	-1,671	-
Net Cash Flow	Rs m	121	-65	-

Current Valuations for SUNDRAM FASTENERS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 18.5, an improvement from the EPS of Rs 16.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 551.9, stands at 31.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 7.6 times, while the price to sales ratio stands at 3.1 times.
• The company's price to cash flow (P/CF) ratio stood at 21.2 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	145.8	180.8
TTM Earnings per share	Rs	16.1	18.5
Diluted earnings per share	Rs	16.1	18.5
Price to Cash Flow	x	18.6	21.2
TTM P/E ratio	x	25.8	31.6
Price / Book Value ratio	x	4.8	6.9
Market Cap	Rs m	58,967	105,889
Dividends per share (Unadj.)	Rs	4.5	4.6

Ratio Analysis for SUNDRAM FASTENERS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.3x during FY18, from 1.2x 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 15.5x during FY18, from 12.7x 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 25.4% during FY18, from 27.4% 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 33.9% during FY18, from 35.9% 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 14.3% during FY18, from 14.9% 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	1.2	1.3
Debtors’ Days	Days	8	8
Interest coverage	x	12.7	15.5
Debt to equity ratio	x	0.1	0.1
Return on assets	%	14.9	14.3
Return on equity	%	27.4	25.4
Return on capital employed	%	35.9	33.9

To see how SUNDRAM FASTENERS has performed over the last 5 years, please visit here.

SUNDRAM FASTENERS Share Price Performance

Over the last one year, SUNDRAM FASTENERS share price has moved up from Rs 390.9 to Rs 551.9, registering a gain of Rs 161.0 or around 41.2%.

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

(To know more, check out historical annual results for SUNDRAM FASTENERS and quarterly results for SUNDRAM FASTENERS)

Read: Latest Annual Report Analysis of SUNDRAM FASTENERS