TIMKEN INDIA 2018-19 Annual Report Analysis

Sun, 31 Mar

TIMKEN INDIA 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.

TIMKEN INDIA Income Statement Analysis

• Operating income during the year rose 36.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 76.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 17.3% in FY19 as against 13.4% in FY18.
• Depreciation charges increased by 83.9% and finance costs increased by 44.7% YoY, respectively.
• Other income declined by 21.9% YoY.
• Net profit for the year grew by 61.6% YoY.
• Net profit margins during the year grew from 7.6% in FY18 to 8.9% in FY19.

TIMKEN INDIA Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	12,152	16,637	36.9%
Other income	Rs m	208	163	-21.9%
Total Revenues	Rs m	12,360	16,800	35.9%
Gross profit	Rs m	1,633	2,886	76.8%
Depreciation	Rs m	431	793	83.9%
Interest	Rs m	12	18	44.7%
Profit before tax	Rs m	1,397	2,238	60.2%
Tax	Rs m	478	752	57.4%
Profit after tax	Rs m	920	1,486	61.6%
Gross profit margin	%	13.4	17.3
Effective tax rate	%	34.2	33.6
Net profit margin	%	7.6	8.9

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TIMKEN INDIA Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 5 billion as compared to Rs 4 billion in FY18, thereby witnessing an increase of 32.6%.
• Current assets rose 36% and stood at Rs 11 billion, while fixed assets rose 93% and stood at Rs 12 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 22 billion as against Rs 14 billion during FY18, thereby witnessing a growth of 61%.

TIMKEN INDIA Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	7,023	13,407	90.9
Current Liabilities	Rs m	3,750	4,970	32.6
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	13,860	22,318	61.0
Current assets	Rs m	7,817	10,629	36.0
Fixed Assets	Rs m	6,043	11,689	93.4
Total Assets	Rs m	13,860	22,318	61.0

TIMKEN INDIA Cash Flow Statement Analysis

• TIMKEN INDIA's cash flow from operating activities (CFO) during FY19 stood at Rs 2 billion, an improvement of 538.0% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -1 billion, an improvement of 71.9% on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -233 million on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 1 billion from the Rs -270 million net cash flows seen during FY18.

TIMKEN INDIA 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	390	2,488	538.0%
Cash Flow from Investing Activities	Rs m	-638	-1,097	-
Cash Flow from Financing Activities	Rs m	-19	-233	-
Net Cash Flow	Rs m	-270	1,195	-

Current Valuations for TIMKEN INDIA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 19.8, an improvement from the EPS of Rs 13.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 590.1, stands at 29.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.3 times, while the price to sales ratio stands at 2.7 times.
• The company's price to cash flow (P/CF) ratio stood at 21.6 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	178.7	221.2
TTM Earnings per share	Rs	13.5	19.8
Diluted earnings per share	Rs	12.2	19.8
Price to Cash Flow	x	39.0	21.6
TTM P/E ratio	x	57.3	29.6
Price / Book Value ratio	x	7.9	3.7
Market Cap	Rs m	55,692	49,172
Dividends per share (Unadj.)	Rs	1.0	1.0

Ratio Analysis for TIMKEN INDIA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.1x during FY19, from 2.1x 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 improved and stood at 128.2x during FY19, from 115.9x 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 declined and down at 11.1% during FY19, from 13.1% 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 declined and down at 16.8% during FY19, from 20.1% 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 6.7% during FY19, from 6.7% 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	2.1	2.1
Debtors’ Days	Days	67	66
Interest coverage	x	115.9	128.2
Debt to equity ratio	x	0.0	0.0
Return on assets	%	6.7	6.7
Return on equity	%	13.1	11.1
Return on capital employed	%	20.1	16.8

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 down from Rs 701.0 to Rs 590.1, registering a loss of Rs 110.9 or around 15.8%.

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