SOLAR INDUSTRIES 2017-18 Annual Report Analysis

Sat, 31 Mar

SOLAR INDUSTRIES 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.

SOLAR INDUSTRIES Income Statement Analysis

• Operating income during the year rose 29.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 23.8% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 21.3% in FY18 as against 22.4% in FY17.
• Depreciation charges increased by 32.4% and finance costs increased by 21.7% YoY, respectively.
• Other income grew by 72.8% YoY.
• Net profit for the year grew by 20.0% YoY.
• Net profit margins during the year declined from 13.4% in FY17 to 12.4% in FY18.

SOLAR INDUSTRIES Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	14,487	18,808	29.8%
Other income	Rs m	132	228	72.8%
Total Revenues	Rs m	14,619	19,036	30.2%
Gross profit	Rs m	3,239	4,008	23.8%
Depreciation	Rs m	387	513	32.4%
Interest	Rs m	269	327	21.7%
Profit before tax	Rs m	2,715	3,396	25.1%
Tax	Rs m	767	1,061	38.2%
Profit after tax	Rs m	1,947	2,336	20.0%
Gross profit margin	%	22.4	21.3
Effective tax rate	%	28.3	31.2
Net profit margin	%	13.4	12.4

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SOLAR INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 6 billion as compared to Rs 5 billion in FY17, thereby witnessing an increase of 7.5%.
• Long-term debt stood at Rs 2 billion as compared to Rs 1 billion during FY17, a growth of 32.5%.
• Current assets rose 12% and stood at Rs 8 billion, while fixed assets rose 18% and stood at Rs 12 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 20 billion as against Rs 17 billion during FY17, thereby witnessing a growth of 15%.

SOLAR INDUSTRIES Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	9,286	10,839	16.7
Current Liabilities	Rs m	5,265	5,660	7.5
Long-term Debt	Rs m	1,480	1,961	32.5
Total Liabilities	Rs m	17,218	19,880	15.5
Current assets	Rs m	7,319	8,187	11.9
Fixed Assets	Rs m	9,898	11,693	18.1
Total Assets	Rs m	17,218	19,880	15.5

SOLAR INDUSTRIES Cash Flow Statement Analysis

• SOLAR INDUSTRIES's cash flow from operating activities (CFO) during FY18 stood at Rs 3 billion, an improvement of 116.0% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -2 billion, an improvement of 2.3% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -532 million on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 266 million from the Rs 5 million net cash flows seen during FY17.

SOLAR INDUSTRIES 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	1,176	2,541	116.0%
Cash Flow from Investing Activities	Rs m	-1,704	-1,743	-
Cash Flow from Financing Activities	Rs m	533	-532	-
Net Cash Flow	Rs m	5	266	5,320.4%

Current Valuations for SOLAR INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 25.8, an improvement from the EPS of Rs 21.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,072.9, stands at 41.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 9.0 times, while the price to sales ratio stands at 5.2 times.
• The company's price to cash flow (P/CF) ratio stood at 31.5 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	160.1	207.8
TTM Earnings per share	Rs	21.5	25.8
Diluted earnings per share	Rs	21.5	25.8
Price to Cash Flow	x	30.2	31.5
TTM P/E ratio	x	39.5	41.6
Price / Book Value ratio	x	19.9	8.3
Market Cap	Rs m	185,030	89,682
Dividends per share (Unadj.)	Rs	5.0	6.0

Ratio Analysis for SOLAR INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio improved 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 11.4x during FY18, from 11.1x 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 improved and stood at 21.6% during FY18, from 21.0% 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 improved and stood at 29.1% during FY18, from 27.7% 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 improved and stood at 13.4% during FY18, from 12.9% 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	1.4	1.4
Debtors’ Days	Days	8	7
Interest coverage	x	11.1	11.4
Debt to equity ratio	x	0.2	0.2
Return on assets	%	12.9	13.4
Return on equity	%	21.0	21.6
Return on capital employed	%	27.7	29.1

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

SOLAR INDUSTRIES Share Price Performance

Over the last one year, SOLAR INDUSTRIES share price has moved up from Rs 778.6 to Rs 1,072.9, registering a gain of Rs 294.4 or around 37.8%.

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

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

Read: Latest Annual Report Analysis of SOLAR INDUSTRIES