SOLAR INDUSTRIES 2018-19 Annual Report Analysis

Sun, 31 Mar

SOLAR INDUSTRIES 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.

SOLAR INDUSTRIES Income Statement Analysis

• Operating income during the year rose 30.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 23.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 20.1% in FY19 as against 21.3% in FY18.
• Depreciation charges increased by 14.8% and finance costs increased by 52.4% YoY, respectively.
• Other income declined by 35.5% YoY.
• Net profit for the year grew by 18.5% YoY.
• Net profit margins during the year declined from 12.4% in FY18 to 11.2% in FY19.

SOLAR INDUSTRIES Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	18,808	24,616	30.9%
Other income	Rs m	228	147	-35.5%
Total Revenues	Rs m	19,036	24,763	30.1%
Gross profit	Rs m	4,008	4,959	23.7%
Depreciation	Rs m	513	589	14.8%
Interest	Rs m	327	499	52.4%
Profit before tax	Rs m	3,396	4,019	18.3%
Tax	Rs m	1,061	1,251	17.9%
Profit after tax	Rs m	2,336	2,768	18.5%
Gross profit margin	%	21.3	20.1
Effective tax rate	%	31.2	31.1
Net profit margin	%	12.4	11.2

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SOLAR INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 7 billion as compared to Rs 6 billion in FY18, thereby witnessing an increase of 28.0%.
• Long-term debt down at Rs 2 billion as compared to Rs 2 billion during FY18, a fall of 22.7%.
• Current assets rose 18% and stood at Rs 10 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 23 billion as against Rs 20 billion during FY18, thereby witnessing a growth of 13%.

SOLAR INDUSTRIES Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	10,839	12,383	14.3
Current Liabilities	Rs m	5,660	7,245	28.0
Long-term Debt	Rs m	1,961	1,516	-22.7
Total Liabilities	Rs m	19,880	22,530	13.3
Current assets	Rs m	8,187	9,625	17.6
Fixed Assets	Rs m	11,693	12,905	10.4
Total Assets	Rs m	19,880	22,530	13.3

SOLAR INDUSTRIES Cash Flow Statement Analysis

• SOLAR INDUSTRIES's cash flow from operating activities (CFO) during FY19 stood at Rs 3 billion, an improvement of 23.5% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -2 billion, an improvement of 16.0% on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -517 million, an improvement of 3% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 85 million from the Rs 266 million net cash flows seen during FY18.

SOLAR INDUSTRIES 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	2,541	3,138	23.5%
Cash Flow from Investing Activities	Rs m	-1,743	-2,023	-
Cash Flow from Financing Activities	Rs m	-532	-517	-
Net Cash Flow	Rs m	266	85	-68.0%

Current Valuations for SOLAR INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 30.6, an improvement from the EPS of Rs 25.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,076.3, stands at 35.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 7.9 times, while the price to sales ratio stands at 4.0 times.
• The company's price to cash flow (P/CF) ratio stood at 30.2 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	207.8	272.0
TTM Earnings per share	Rs	25.8	30.6
Diluted earnings per share	Rs	25.8	30.6
Price to Cash Flow	x	34.1	30.2
TTM P/E ratio	x	41.6	35.2
Price / Book Value ratio	x	8.3	8.2
Market Cap	Rs m	89,682	101,512
Dividends per share (Unadj.)	Rs	6.0	7.0

Ratio Analysis for SOLAR INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.3x 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 9.1x during FY19, from 11.4x 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 22.4% during FY19, from 21.6% 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 32.5% during FY19, from 29.1% 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 14.5% during FY19, from 13.4% 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	1.3
Debtors’ Days	Days	7	6
Interest coverage	x	11.4	9.1
Debt to equity ratio	x	0.2	0.1
Return on assets	%	13.4	14.5
Return on equity	%	21.6	22.4
Return on capital employed	%	29.1	32.5

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 1,072.9 to Rs 1,076.3, registering a gain of Rs 3.4 or around 0.3%.

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