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SRF 2018-19 Annual Report Analysis
Sun, 31 Mar

SRF 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.

SRF Income Statement Analysis

  • Operating income during the year rose 40.0% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 48.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 17.5% in FY19 as against 16.5% in FY18.
  • Depreciation charges increased by 13.4% and finance costs increased by 60.1% YoY, respectively.
  • Other income declined by 65.1% YoY.
  • Net profit for the year grew by 39.0% YoY.
  • Net profit margins during the year declined from 8.4% in FY18 to 8.3% in FY19.

SRF Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 54,932 76,927 40.0%
Other income Rs m 1,151 402 -65.1%
Total Revenues Rs m 56,083 77,328 37.9%
Gross profit Rs m 9,062 13,433 48.2%
Depreciation Rs m 3,158 3,582 13.4%
Interest Rs m 1,239 1,984 60.1%
Profit before tax Rs m 5,817 8,269 42.2%
Tax Rs m 1,200 1,853 54.4%
Profit after tax Rs m 4,617 6,416 39.0%
Gross profit margin % 16.5 17.5
Effective tax rate % 20.6 22.4
Net profit margin % 8.4 8.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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SRF Balance Sheet Analysis

  • The company's current liabilities during FY19 stood at Rs 32 billion as compared to Rs 25 billion in FY18, thereby witnessing an increase of 26.3%.
  • Long-term debt stood at Rs 22 billion as compared to Rs 19 billion during FY18, a growth of 13.3%.
  • Current assets rose 31% and stood at Rs 32 billion, while fixed assets rose 13% and stood at Rs 67 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 99 billion as against Rs 84 billion during FY18, thereby witnessing a growth of 18%.

SRF Balance Sheet as on March 2019

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 35,645 41,287 15.8
 
Current Liabilities Rs m 25,322 31,987 26.3
Long-term Debt Rs m 19,073 21,613 13.3
Total Liabilities Rs m 83,630 98,879 18.2
 
Current assets Rs m 24,259 31,723 30.8
Fixed Assets Rs m 59,371 67,156 13.1
Total Assets Rs m 83,630 98,879 18.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



SRF Cash Flow Statement Analysis

  • SRF's cash flow from operating activities (CFO) during FY19 stood at Rs 9 billion, an improvement of 32.1% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs -10 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY19 stood at Rs 2 billion on a YoY basis.
  • Overall, net cash flows for the company during FY19 stood at Rs 1 billion from the Rs -6 million net cash flows seen during FY18.

SRF 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 6,780 8,956 32.1%
Cash Flow from Investing Activities Rs m -11,953 -10,142 -
Cash Flow from Financing Activities Rs m 4,951 2,458 -50.4%
Net Cash Flow Rs m -6 1,025 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for SRF

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 111.6, an improvement from the EPS of Rs 80.4 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 2,404.1, stands at 111.1 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 17.3 times, while the price to sales ratio stands at 1.8 times.
  • The company's price to cash flow (P/CF) ratio stood at 11.5 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 956.7 1,338.3
TTM Earnings per share Rs 80.4 111.6
Diluted earnings per share Rs 15.6 21.6
Price to Cash Flow x 74.6 11.5
TTM P/E ratio x 125.7 111.1
Price / Book Value ratio x 2.8 2.8
Market Cap Rs m 99,481 115,174
Dividends per share (Unadj.) Rs 12.0 12.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for SRF

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 1.0x during FY19, from 1.0x 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 5.2x during FY19, from 5.7x 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 15.5% during FY19, from 13.0% 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 16.3% during FY19, from 12.9% 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 8.5% during FY19, from 7.0% 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 1.0 1.0
Debtors’ Days Days 5 5
Interest coverage x 5.7 5.2
Debt to equity ratio x 0.5 0.5
Return on assets % 7.0 8.5
Return on equity % 13.0 15.5
Return on capital employed % 12.9 16.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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

SRF Share Price Performance

Over the last one year, SRF share price has moved up from Rs 1,957.8 to Rs 2,404.1, registering a gain of Rs 446.3 or around 22.8%.

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

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

Annual Report FAQs

What is the current share price of SRF?

SRF currently trades at Rs 2,557.6 per share. You can check out the latest share price performance of SRF here...

What was the revenue of SRF in FY19? How does it compare to earlier years?

The revenues of SRF stood at Rs 77,328 m in FY19, which was up 37.9% compared to Rs 56,083 m reported in FY18.

SRF's revenue has grown from Rs 42,777 m in FY15 to Rs 77,328 m in FY19.

Over the past 5 years, the revenue of SRF has grown at a CAGR of 16.0%.

What was the net profit of SRF in FY19? How does it compare to earlier years?

The net profit of SRF stood at Rs 6,416 m in FY19, which was up 39.0% compared to Rs 4,617 m reported in FY18.

This compares to a net profit of Rs 5,150 m in FY17 and a net profit of Rs 4,299 m in FY16.

Over the past 5 years, SRF net profit has grown at a CAGR of 20.7%.

What does the cash flow statement of SRF reveal?

The cash flow statement is the financial statement that presents the cash inflows and outflows of a company during a given period of time.

This statement is one of the most useful tools for judging a company's liquidity position. The ratios and parameters in this statement helps test a company's financial health.

The cash flow statement of SRF reveals:

  • Cash flow from operations increased in FY19 and stood at Rs 8,956 m as compared to Rs 6,780 m in FY18.
  • Cash flow from investments increased in FY19 and stood at Rs -10,142 m as compared to Rs -11,953 m in FY18.
  • Cash flow from financial activity decreased in FY19 and stood at Rs 2,458 m as compared to Rs 4,951 m in FY18.

Here's the cash flow statement of SRF for the past 5 years.

(Rs m)FY15FY16FY17FY18FY19
From Operations5,42410,9006,4546,7808,956
From Investments-4,998-6,667-6,133-11,953-10,142
From Financial Activity-181-1,825-2,8444,9512,458
Net Cashflow2452,408-2,523-61,025

What does the Key Ratio analysis of SRF reveal?

Be it the company's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.

The ratio/financial analysis of SRF reveals:

  • Operating profit margins witnessed a fall and down at 17.5% in FY19 as against 16.5% in FY18.
  • Net profit margins declined from 8.4% in FY18 to 8.3% in FY19.
  • Debt to Equity ratio for FY19 stood at 0.5 as compared to 0.5 in FY18.

Here's the ratio/financial analysis of SRF for the past 5 years.

 FY15FY16FY17FY18FY19
Operating Profit Margin (%)17.022.521.516.517.5
Net Profit Margin (%)7.210.011.48.48.3
Debt to Equity Ratio (x)0.80.70.40.50.5

Read: Latest Annual Report Analysis of SRF

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