SOBHA 2018-19 Annual Report Analysis

Sun, 31 Mar

SOBHA 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.

SOBHA Income Statement Analysis

• Operating income during the year rose 23.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 29.5% YoY during the fiscal. Operating profit margins witnessed a fall and down at 19.6% in FY19 as against 18.7% in FY18.
• Depreciation charges increased by 14.6% and finance costs increased by 19.4% YoY, respectively.
• Other income grew by 48.2% YoY.
• Net profit for the year grew by 36.9% YoY.
• Net profit margins during the year grew from 7.8% in FY18 to 8.6% in FY19.

SOBHA Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	27,791	34,421	23.9%
Other income	Rs m	496	735	48.2%
Total Revenues	Rs m	28,286	35,155	24.3%
Gross profit	Rs m	5,197	6,733	29.5%
Depreciation	Rs m	544	623	14.6%
Interest	Rs m	1,978	2,362	19.4%
Profit before tax	Rs m	3,171	4,482	41.3%
Tax	Rs m	1,003	1,512	50.8%
Profit after tax	Rs m	2,169	2,970	36.9%
Gross profit margin	%	18.7	19.6
Effective tax rate	%	31.6	33.7
Net profit margin	%	7.8	8.6

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SOBHA Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 85 billion as compared to Rs 57 billion in FY18, thereby witnessing an increase of 48.9%.
• Long-term debt down at Rs 48 million as compared to Rs 3 billion during FY18, a fall of 98.3%.
• Current assets rose 19% and stood at Rs 93 billion, while fixed assets rose 10% and stood at Rs 13 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 106 billion as against Rs 90 billion during FY18, thereby witnessing a growth of 18%.

SOBHA Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	27,699	22,291	-19.5
Current Liabilities	Rs m	57,055	84,937	48.9
Long-term Debt	Rs m	2,788	48	-98.3
Total Liabilities	Rs m	90,248	106,462	18.0
Current assets	Rs m	78,147	93,096	19.1
Fixed Assets	Rs m	12,101	13,366	10.5
Total Assets	Rs m	90,248	106,462	18.0

SOBHA Cash Flow Statement Analysis

• SOBHA'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 -614 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -862 million, an improvement of 64% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 585 million from the Rs -180 million net cash flows seen during FY18.

SOBHA 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	3,535	2,061	-41.7%
Cash Flow from Investing Activities	Rs m	-1,287	-614	-
Cash Flow from Financing Activities	Rs m	-2,428	-862	-
Net Cash Flow	Rs m	-180	585	-

Current Valuations for SOBHA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 31.3, an improvement from the EPS of Rs 22.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 513.0, stands at 16.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.2 times, while the price to sales ratio stands at 1.4 times.
• The company's price to cash flow (P/CF) ratio stood at 12.8 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	293.0	362.9
TTM Earnings per share	Rs	22.9	31.3
Diluted earnings per share	Rs	22.9	31.3
Price to Cash Flow	x	17.8	12.8
TTM P/E ratio	x	22.2	16.4
Price / Book Value ratio	x	1.8	2.1
Market Cap	Rs m	48,737	46,024
Dividends per share (Unadj.)	Rs	7.0	7.0

Ratio Analysis for SOBHA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.1x 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 improved and stood at 2.9x during FY19, from 2.6x 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 13.3% during FY19, from 7.8% 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 30.6% during FY19, from 16.9% 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 improved and stood at 5.0% during FY19, from 4.6% 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	1.1
Debtors’ Days	Days	43	35
Interest coverage	x	2.6	2.9
Debt to equity ratio	x	0.1	0.0
Return on assets	%	4.6	5.0
Return on equity	%	7.8	13.3
Return on capital employed	%	16.9	30.6

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

SOBHA Share Price Performance

Over the last one year, SOBHA share price has moved up from Rs 508.1 to Rs 513.0, registering a gain of Rs 4.9 or around 1.0%.

Meanwhile, the S&P BSE REALTY Index is trading at Rs 2,077.1 (up 0.6%). Over the last one year it has moved down from 2,229.9 to 2,077.1, a loss of 153 points (down 6.9%).

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

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

Read: Latest Annual Report Analysis of SOBHA