STERLITE TECH. 2017-18 Annual Report Analysis

Fri, 21 Dec

STERLITE TECH. 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.

STERLITE TECH. Income Statement Analysis

• Operating income during the year rose 29.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 43.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 24.0% in FY18 as against 21.7% in FY17.
• Depreciation charges increased by 14.4% and finance costs decreased by 15.5% YoY, respectively.
• Other income grew by 121.6% YoY.
• Net profit for the year grew by 69.3% YoY.
• Net profit margins during the year grew from 8.8% in FY17 to 11.5% in FY18.

STERLITE TECH. Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	24,489	31,771	29.7%
Other income	Rs m	116	256	121.6%
Total Revenues	Rs m	24,604	32,027	30.2%
Gross profit	Rs m	5,308	7,630	43.7%
Depreciation	Rs m	1,592	1,822	14.4%
Interest	Rs m	1,229	1,038	-15.5%
Profit before tax	Rs m	2,602	5,026	93.2%
Tax	Rs m	397	1,332	235.7%
Profit after tax	Rs m	2,177	3,685	69.3%
Gross profit margin	%	21.7	24.0
Effective tax rate	%	15.2	26.5
Net profit margin	%	8.8	11.5

STERLITE TECH. Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 17 billion as compared to Rs 14 billion in FY17, thereby witnessing an increase of 20.9%.
• Long-term debt stood at Rs 6 billion as compared to Rs 4 billion during FY17, a growth of 47.6%.
• Current assets rose 33% and stood at Rs 20 billion, while fixed assets rose 12% and stood at Rs 16 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 37 billion as against Rs 29 billion during FY17, thereby witnessing a growth of 28%.

STERLITE TECH. Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	8,801	11,753	33.5
Current Liabilities	Rs m	14,091	17,040	20.9
Long-term Debt	Rs m	4,271	6,305	47.6
Total Liabilities	Rs m	29,110	37,117	27.5
Current assets	Rs m	14,728	19,562	32.8
Fixed Assets	Rs m	14,227	15,911	11.8
Total Assets	Rs m	29,110	37,117	27.5

STERLITE TECH. Cash Flow Statement Analysis

• STERLITE TECH.'s cash flow from operating activities (CFO) during FY18 stood at Rs 7 billion, an improvement of 49.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -6 billion, an improvement of 151.8% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -2 billion, an improvement of 19% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -91 million from the Rs 693 million net cash flows seen during FY17.

STERLITE TECH. 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	4,885	7,316	49.8%
Cash Flow from Investing Activities	Rs m	-2,323	-5,848	-
Cash Flow from Financing Activities	Rs m	-1,869	-1,515	-
Net Cash Flow	Rs m	693	-91	-

Current Valuations for STERLITE TECH.

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 9.2, an improvement from the EPS of Rs 5.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 295.3, stands at 23.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 9.2 times, while the price to sales ratio stands at 3.4 times.
• The company's price to cash flow (P/CF) ratio stood at 21.1 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	61.5	79.2
TTM Earnings per share	Rs	5.5	9.2
Diluted earnings per share	Rs	5.5	9.4
Price to Cash Flow	x	31.2	21.1
TTM P/E ratio	x	23.9	23.6
Price / Book Value ratio	x	4.8	9.2
Market Cap	Rs m	117,618	116,339
Dividends per share (Unadj.)	Rs	1.3	2.0

Ratio Analysis for STERLITE TECH.

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.1x during FY18, from 1.0x 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 deteriorated and stood at 5.8x during FY18, from 3.1x 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 31.4% during FY18, from 24.7% 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 33.5% during FY18, from 29.1% 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 12.7% during FY18, from 11.7% 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	1.0	1.1
Debtors’ Days	Days	102	100
Interest coverage	x	3.1	5.8
Debt to equity ratio	x	0.5	0.5
Return on assets	%	11.7	12.7
Return on equity	%	24.7	31.4
Return on capital employed	%	29.1	33.5

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

STERLITE TECH. Share Price Performance

Over the last one year, STERLITE TECH. share price has moved up from Rs 292.1 to Rs 295.3, registering a gain of Rs 3.2 or around 1.1%.

Overall, the S&P BSE SENSEX is up 7.8% over the year.

(To know more, check out historical annual results for STERLITE TECH. and quarterly results for STERLITE TECH.)