AGC NETWORKS 2019-20 Annual Report Analysis

Tue, 31 Mar

AGC NETWORKS has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

AGC NETWORKS Income Statement Analysis

• Operating income during the year rose 169.5% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 725.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 3.3% in FY20 as against 1.4% in FY19.
• Depreciation charges increased by 685.5% and finance costs increased by 195.7% YoY, respectively.
• Other income grew by 15.1% YoY.
• Net profit for the year grew by 1.5% YoY.
• Net profit margins during the year grew from 4.3% in FY19 to 1.6% in FY20.

AGC NETWORKS Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	18,527	49,939	169.5%
Other income	Rs m	64	74	15.1%
Total Revenues	Rs m	18,592	50,013	169.0%
Gross profit	Rs m	-266	1,664	-725.6%
Depreciation	Rs m	147	1,151	685.5%
Interest	Rs m	445	1,317	195.7%
Profit before tax	Rs m	-794	-730	-8.0%
Tax	Rs m	-6	70	-1,303.4%
Profit after tax	Rs m	-788	-800	1.5%
Gross profit margin	%	-1.4	3.3
Effective tax rate	%	0.7	-9.6
Net profit margin	%	-4.3	-1.6

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AGC NETWORKS Balance Sheet Analysis

• The company's current liabilities during FY20 stood at Rs 20 billion as compared to Rs 17 billion in FY19, thereby witnessing an increase of 19.6%.
• Long-term debt down at Rs 152 million as compared to Rs 6 billion during FY19, a fall of 97.4%.
• Current assets fell 18% and stood at Rs 15 billion, while fixed assets rose 47% and stood at Rs 7 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 23 billion as against Rs 24 billion during FY19, thereby witnessing a fall of 5%.

AGC NETWORKS Balance Sheet as on March 2020

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Networth	Rs m	163	-1,783	-1,192.4
Current Liabilities	Rs m	16,581	19,829	19.6
Long-term Debt	Rs m	5,869	152	-97.4
Total Liabilities	Rs m	23,998	22,853	-4.8
Current assets	Rs m	18,965	15,469	-18.4
Fixed Assets	Rs m	5,032	7,384	46.7
Total Assets	Rs m	23,998	22,853	-4.8

AGC NETWORKS Cash Flow Statement Analysis

• AGC NETWORKS's cash flow from operating activities (CFO) during FY20 stood at Rs 11 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY20 stood at Rs -3 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY20 stood at Rs -6 billion on a YoY basis.
• Overall, net cash flows for the company during FY20 stood at Rs 1 billion from the Rs 2 billion net cash flows seen during FY19.

AGC NETWORKS Cash Flow Statement 2019-20

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-19	Mar-20
Cash Flow from Operating Activities	Rs m	-720	11,372	-
Cash Flow from Investing Activities	Rs m	-3,565	-3,284	-
Cash Flow from Financing Activities	Rs m	6,290	-6,452	-
Net Cash Flow	Rs m	1,967	1,099	-44.1%

Current Valuations for AGC NETWORKS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -26.9, an decline from the EPS of Rs -26.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 234.7, stands at 93.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at -21.6 times, while the price to sales ratio stands at 0.1 times.
• The company's price to cash flow (P/CF) ratio stood at 22.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Sales per share (Unadj.)	Rs	623.0	1,679.2
TTM Earnings per share	Rs	-26.5	-26.9
Diluted earnings per share	Rs	-4.8	-4.9
Price to Cash Flow	x	-28.6	22.5
TTM P/E ratio	x	-23.3	93.6
Price / Book Value ratio	x	17.1	-4.4
Market Cap	Rs m	2,795	7,911
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for AGC NETWORKS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.8x during FY20, from 1.1x during FY19. 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 0.4x during FY20, from -0.8x during FY19. 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 44.9% during FY20, from -482.7% during FY20. 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 -36.0% during FY20, from -5.8% during FY19. 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 2.3% during FY20, from -1.4% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Current ratio	x	1.1	0.8
Debtors’ Days	Days	17	3
Interest coverage	x	-0.8	0.4
Debt to equity ratio	x	36.0	-0.1
Return on assets	%	-1.4	2.3
Return on equity	%	-482.7	44.9
Return on capital employed	%	-5.8	-36.0

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

AGC NETWORKS Share Price Performance

Over the last one year, AGC NETWORKS share price has moved up from Rs 112.0 to Rs 234.7, registering a gain of Rs 122.7 or around 109.6%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 6,403.4 (up 2.8%). Over the last one year it has moved down from 7,621.8 to 6,403.4, a loss of 1,218 points (down 16.0%).

Overall, the S&P BSE SENSEX is down 24.2% over the year.

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

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