SUBEX 2017-18 Annual Report Analysis

Sat, 31 Mar

SUBEX 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.

SUBEX Income Statement Analysis

• Operating income during the year fell 9.2% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 270.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 14.1% in FY18 as against 7.5% in FY17.
• Depreciation charges increased by 4.4% and finance costs decreased by 62.0% YoY, respectively.
• Other income declined by 90.7% YoY.
• Net profit for the year declined by 147.8% YoY.
• Net profit margins during the year grew from 12.1% in FY17 to 6.4% in FY18.

SUBEX Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	3,573	3,243	-9.2%
Other income	Rs m	185	17	-90.7%
Total Revenues	Rs m	3,759	3,260	-13.3%
Gross profit	Rs m	-268	456	-270.3%
Depreciation	Rs m	50	52	4.4%
Interest	Rs m	204	78	-62.0%
Profit before tax	Rs m	-336	344	-202.3%
Tax	Rs m	96	137	42.9%
Profit after tax	Rs m	-432	207	-147.8%
Gross profit margin	%	-7.5	14.1
Effective tax rate	%	-28.6	39.9
Net profit margin	%	-12.1	6.4

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SUBEX Balance Sheet Analysis

• The company's current liabilities during FY18 down at Rs 1 billion as compared to Rs 3 billion in FY17, thereby witnessing an decrease of -60.0%.
• Current assets fell 26% and stood at Rs 2 billion, while fixed assets rose 1% and stood at Rs 7 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 9 billion as against Rs 10 billion during FY17, thereby witnessing a fall of 6%.

SUBEX Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	6,840	7,794	13.9
Current Liabilities	Rs m	2,739	1,097	-60.0
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	9,633	9,015	-6.4
Current assets	Rs m	2,538	1,877	-26.1
Fixed Assets	Rs m	7,094	7,138	0.6
Total Assets	Rs m	9,633	9,015	-6.4

SUBEX Cash Flow Statement Analysis

• SUBEX's cash flow from operating activities (CFO) during FY18 stood at Rs 537 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -35 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -908 million on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -438 million from the Rs -121 million net cash flows seen during FY17.

SUBEX 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	539	537	-0.5%
Cash Flow from Investing Activities	Rs m	-70	-35	-
Cash Flow from Financing Activities	Rs m	-549	-908	-
Net Cash Flow	Rs m	-121	-438	-

Current Valuations for SUBEX

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.4, an improvement from the EPS of Rs -0.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 7.7, stands at 20.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.6 times, while the price to sales ratio stands at 1.3 times.
• The company's price to cash flow (P/CF) ratio stood at 22.2 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	7.0	5.8
TTM Earnings per share	Rs	-0.9	0.4
Diluted earnings per share	Rs	-0.8	0.4
Price to Cash Flow	x	-16.2	22.2
TTM P/E ratio	x	-14.3	20.8
Price / Book Value ratio	x	0.8	0.7
Market Cap	Rs m	5,700	5,741
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for SUBEX

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.7x during FY18, from 0.9x 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 5.4x during FY18, from -0.6x 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 2.7% during FY18, from -6.3% 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 5.4% during FY18, from -1.9% 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 3.2% during FY18, from -2.4% 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	0.9	1.7
Debtors’ Days	Days	1,211	1,046
Interest coverage	x	-0.6	5.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	-2.4	3.2
Return on equity	%	-6.3	2.7
Return on capital employed	%	-1.9	5.4

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

SUBEX Share Price Performance

Over the last one year, SUBEX share price has moved down from Rs 11.0 to Rs 7.7, registering a loss of Rs 3.4 or around 30.4%.

Meanwhile, the S&P BSE IT Index is trading at Rs 12,100.6 (down 0.3%). Over the last one year it has moved up from 10,365.5 to 12,100.6, a gain of 1,735 points (up 16.7%).

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

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

Read: Latest Annual Report Analysis of SUBEX