TIMKEN INDIA 2017-18 Annual Report Analysis

Sat, 31 Mar

TIMKEN INDIA 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.

TIMKEN INDIA Income Statement Analysis

• Operating income during the year rose 22.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 3.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 13.4% in FY18 as against 15.9% in FY17.
• Depreciation charges increased by 49.3% and finance costs increased by 45.3% YoY, respectively.
• Other income grew by 110.0% YoY.
• Net profit for the year declined by 5.4% YoY.
• Net profit margins during the year declined from 9.8% in FY17 to 7.6% in FY18.

TIMKEN INDIA Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	9,951	12,152	22.1%
Other income	Rs m	99	208	110.0%
Total Revenues	Rs m	10,051	12,360	23.0%
Gross profit	Rs m	1,580	1,633	3.3%
Depreciation	Rs m	289	431	49.3%
Interest	Rs m	8	12	45.3%
Profit before tax	Rs m	1,382	1,397	1.1%
Tax	Rs m	410	478	16.5%
Profit after tax	Rs m	972	920	-5.4%
Gross profit margin	%	15.9	13.4
Effective tax rate	%	29.7	34.2
Net profit margin	%	9.8	7.6

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TIMKEN INDIA Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 4 billion as compared to Rs 2 billion in FY17, thereby witnessing an increase of 57.8%.
• Current assets rose 42% and stood at Rs 8 billion, while fixed assets rose 86% and stood at Rs 6 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 14 billion as against Rs 9 billion during FY17, thereby witnessing a growth of 59%.

TIMKEN INDIA Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	6,179	7,023	13.7
Current Liabilities	Rs m	2,376	3,750	57.8
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	8,740	13,860	58.6
Current assets	Rs m	5,494	7,817	42.3
Fixed Assets	Rs m	3,246	6,043	86.2
Total Assets	Rs m	8,740	13,860	58.6

TIMKEN INDIA Cash Flow Statement Analysis

• TIMKEN INDIA's cash flow from operating activities (CFO) during FY18 stood at Rs 390 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -638 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -19 million, an improvement of 60% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -270 million from the Rs 338 million net cash flows seen during FY17.

TIMKEN INDIA 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	1,641	390	-76.2%
Cash Flow from Investing Activities	Rs m	-1,251	-638	-
Cash Flow from Financing Activities	Rs m	-47	-19	-
Net Cash Flow	Rs m	338	-270	-

Current Valuations for TIMKEN INDIA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 13.5, an decline from the EPS of Rs 14.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 701.0, stands at 57.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 7.5 times, while the price to sales ratio stands at 3.9 times.
• The company's price to cash flow (P/CF) ratio stood at 41.2 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	146.3	178.7
TTM Earnings per share	Rs	14.3	13.5
Diluted earnings per share	Rs	12.9	12.2
Price to Cash Flow	x	38.5	41.2
TTM P/E ratio	x	49.9	57.3
Price / Book Value ratio	x	6.1	7.9
Market Cap	Rs m	37,742	55,692
Dividends per share (Unadj.)	Rs	1.0	1.0

Ratio Analysis for TIMKEN INDIA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.1x during FY18, from 2.3x 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 115.9x during FY18, from 166.1x 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 declined and down at 13.1% during FY18, from 15.7% 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 declined and down at 20.1% during FY18, from 22.5% 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 declined and down at 6.7% during FY18, from 11.2% 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	2.3	2.1
Debtors’ Days	Days	70	67
Interest coverage	x	166.1	115.9
Debt to equity ratio	x	0.0	0.0
Return on assets	%	11.2	6.7
Return on equity	%	15.7	13.1
Return on capital employed	%	22.5	20.1

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

TIMKEN INDIA Share Price Performance

Over the last one year, TIMKEN INDIA share price has moved up from Rs 644.7 to Rs 701.0, registering a gain of Rs 56.3 or around 8.7%.

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

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

Read: Latest Annual Report Analysis of TIMKEN INDIA