SUNDRAM FASTENERS 2018-19 Annual Report Analysis

Sun, 31 Mar

SUNDRAM FASTENERS 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.

SUNDRAM FASTENERS Income Statement Analysis

• Operating income during the year rose 20.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 17.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 17.6% in FY19 as against 17.9% in FY18.
• Depreciation charges increased by 14.6% and finance costs increased by 20.1% YoY, respectively.
• Other income grew by 15.5% YoY.
• Net profit for the year grew by 18.2% YoY.
• Net profit margins during the year declined from 10.2% in FY18 to 10.1% in FY19.

SUNDRAM FASTENERS Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	37,983	45,579	20.0%
Other income	Rs m	232	268	15.5%
Total Revenues	Rs m	38,215	45,847	20.0%
Gross profit	Rs m	6,814	8,004	17.5%
Depreciation	Rs m	1,123	1,288	14.6%
Interest	Rs m	383	460	20.1%
Profit before tax	Rs m	5,539	6,524	17.8%
Tax	Rs m	1,658	1,935	16.7%
Profit after tax	Rs m	3,882	4,590	18.2%
Gross profit margin	%	17.9	17.6
Effective tax rate	%	29.9	29.7
Net profit margin	%	10.2	10.1

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SUNDRAM FASTENERS Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 13 billion as compared to Rs 11 billion in FY18, thereby witnessing an increase of 20.3%.
• Long-term debt stood at Rs 3 billion as compared to Rs 2 billion during FY18, a growth of 55.7%.
• Current assets rose 17% and stood at Rs 17 billion, while fixed assets rose 31% and stood at Rs 20 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 37 billion as against Rs 30 billion during FY18, thereby witnessing a growth of 24%.

SUNDRAM FASTENERS Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	15,311	18,700	22.1
Current Liabilities	Rs m	10,913	13,131	20.3
Long-term Debt	Rs m	2,181	3,396	55.7
Total Liabilities	Rs m	29,871	37,026	24.0
Current assets	Rs m	14,537	16,995	16.9
Fixed Assets	Rs m	15,334	20,032	30.6
Total Assets	Rs m	29,871	37,026	24.0

SUNDRAM FASTENERS Cash Flow Statement Analysis

• SUNDRAM FASTENERS's cash flow from operating activities (CFO) during FY19 stood at Rs 5 billion, an improvement of 0.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -6 billion, an improvement of 101.9% on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs 1 billion, an improvement of 176% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -106 million from the Rs -65 million net cash flows seen during FY18.

SUNDRAM FASTENERS 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	4,564	4,575	0.2%
Cash Flow from Investing Activities	Rs m	-2,952	-5,959	-
Cash Flow from Financing Activities	Rs m	-1,671	1,267	-
Net Cash Flow	Rs m	-65	-106	-

Current Valuations for SUNDRAM FASTENERS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 21.8, an improvement from the EPS of Rs 18.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 566.0, stands at 27.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.4 times, while the price to sales ratio stands at 2.6 times.
• The company's price to cash flow (P/CF) ratio stood at 20.9 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	180.8	216.9
TTM Earnings per share	Rs	18.5	21.8
Diluted earnings per share	Rs	18.5	21.8
Price to Cash Flow	x	23.2	20.9
TTM P/E ratio	x	31.6	27.2
Price / Book Value ratio	x	6.9	6.6
Market Cap	Rs m	105,889	122,878
Dividends per share (Unadj.)	Rs	4.6	5.1

Ratio Analysis for SUNDRAM FASTENERS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.3x during FY19, from 1.3x 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 15.2x during FY19, from 15.5x 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 24.5% during FY19, from 25.4% 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 declined and down at 31.6% during FY19, from 33.9% 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 13.6% during FY19, from 14.3% 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	1.3	1.3
Debtors’ Days	Days	8	7
Interest coverage	x	15.5	15.2
Debt to equity ratio	x	0.1	0.2
Return on assets	%	14.3	13.6
Return on equity	%	25.4	24.5
Return on capital employed	%	33.9	31.6

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 551.9 to Rs 566.0, registering a gain of Rs 14.1 or around 2.6%.

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