THERMAX 2018-19 Annual Report Analysis

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THERMAX 2018-19 Annual Report Analysis
Thu, 19 Sep

THERMAX 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.

THERMAX Income Statement Analysis

  • Operating income during the year rose 33.8% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 14.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 7.7% in FY19 as against 9.0% in FY18.
  • Depreciation charges increased by 11.6% and finance costs increased by 11.4% YoY, respectively.
  • Other income grew by 28.8% YoY.
  • Net profit for the year grew by 40.8% YoY.
  • Net profit margins during the year grew from 5.0% in FY18 to 5.3% in FY19.

THERMAX Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 44,649 59,732 33.8%
Other income Rs m 1,164 1,499 28.8%
Total Revenues Rs m 45,813 61,231 33.7%
Gross profit Rs m 4,009 4,574 14.1%
Depreciation Rs m 824 920 11.6%
Interest Rs m 129 143 11.4%
Profit before tax Rs m 4,220 5,010 18.7%
Tax Rs m 1,658 849 -48.8%
Profit after tax Rs m 2,311 3,254 40.8%
Gross profit margin % 9.0 7.7
Effective tax rate % 39.3 17.0
Net profit margin % 5.0 5.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



THERMAX Balance Sheet Analysis

  • The company's current liabilities during FY19 stood at Rs 37 billion as compared to Rs 31 billion in FY18, thereby witnessing an increase of 18.7%.
  • Long-term debt down at Rs 351 million as compared to Rs 530 million during FY18, a fall of 33.8%.
  • Current assets rose 15% and stood at Rs 47 billion, while fixed assets rose 7% and stood at Rs 14 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 68 billion as against Rs 59 billion during FY18, thereby witnessing a growth of 14%.

THERMAX Balance Sheet as on March 2019

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 27,147 30,143 11.0
 
Current Liabilities Rs m 30,787 36,538 18.7
Long-term Debt Rs m 530 351 -33.8
Total Liabilities Rs m 59,450 67,999 14.4
 
Current assets Rs m 41,016 47,371 15.5
Fixed Assets Rs m 12,650 13,520 6.9
Total Assets Rs m 59,450 67,999 14.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



THERMAX Cash Flow Statement Analysis

  • THERMAX's cash flow from operating activities (CFO) during FY19 stood at Rs -1 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs 3 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY19 stood at Rs -654 million on a YoY basis.
  • Overall, net cash flows for the company during FY19 stood at Rs 852 million from the Rs 67 million net cash flows seen during FY18.

THERMAX 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 5,336 -1,154 -
Cash Flow from Investing Activities Rs m -5,311 2,655 -
Cash Flow from Financing Activities Rs m -203 -654 -
Net Cash Flow Rs m 67 852 1,167.7%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for THERMAX

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 27.3, an improvement from the EPS of Rs 19.4 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 1,005.8, stands at 35.2 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 4.1 times, while the price to sales ratio stands at 2.1 times.
  • The company's price to cash flow (P/CF) ratio stood at 28.6 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 374.7 501.3
TTM Earnings per share Rs 19.4 27.3
Diluted earnings per share Rs 19.4 27.3
Price to Cash Flow x 35.4 28.6
TTM P/E ratio x 35.2 35.2
Price / Book Value ratio x 4.9 4.1
Market Cap Rs m 119,845 119,845
Dividends per share (Unadj.) Rs 6.0 7.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for THERMAX

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 1.3x during FY19, from 1.3x 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 36.0x during FY19, from 33.8x 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 10.8% during FY19, from 8.5% 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 13.9% during FY19, from 14.8% 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 5.0% during FY19, from 4.1% 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 1.3 1.3
Debtors’ Days Days 102 84
Interest coverage x 33.8 36.0
Debt to equity ratio x 0.0 0.0
Return on assets % 4.1 5.0
Return on equity % 8.5 10.8
Return on capital employed % 14.8 13.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

THERMAX Share Price Performance

Over the last one year, THERMAX share price has moved up from Rs 961.3 to Rs 1,005.8, registering a gain of Rs 44.5 or around 4.6%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 16,780.7 (down 1.1%). Over the last one year it has moved down from 18,168.6 to 16,780.7, a loss of 1,388 points (down 7.6%).

Overall, the S&P BSE SENSEX is down 2.8% over the year.

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

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