HONEYWELL AUTOMATION 2018-19 Annual Report Analysis

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HONEYWELL AUTOMATION 2018-19 Annual Report Analysis
Thu, 19 Sep

HONEYWELL AUTOMATION 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.

HONEYWELL AUTOMATION Income Statement Analysis

  • Operating income during the year rose 18.0% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 38.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 15.9% in FY19 as against 13.5% in FY18.
  • Depreciation charges increased by 4.5% and finance costs increased by 1142.9% YoY, respectively.
  • Other income grew by 114.0% YoY.
  • Net profit for the year grew by 43.7% YoY.
  • Net profit margins during the year grew from 9.2% in FY18 to 11.1% in FY19.

HONEYWELL AUTOMATION Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 26,900 31,747 18.0%
Other income Rs m 331 709 114.0%
Total Revenues Rs m 27,231 32,456 19.2%
Gross profit Rs m 3,636 5,034 38.4%
Depreciation Rs m 152 159 4.5%
Interest Rs m 3 35 1,142.9%
Profit before tax Rs m 3,812 5,549 45.6%
Tax Rs m 1,315 1,961 49.1%
Profit after tax Rs m 2,497 3,588 43.7%
Gross profit margin % 13.5 15.9
Effective tax rate % 34.5 35.3
Net profit margin % 9.2 11.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



HONEYWELL AUTOMATION Balance Sheet Analysis

  • The company's current liabilities during FY19 stood at Rs 11 billion as compared to Rs 10 billion in FY18, thereby witnessing an increase of 10.7%.
  • Current assets rose 21% and stood at Rs 25 billion, while fixed assets rose 10% and stood at Rs 932 million in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 29 billion as against Rs 24 billion during FY18, thereby witnessing a growth of 19%.

HONEYWELL AUTOMATION Balance Sheet as on March 2019

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 14,187 17,475 23.2
 
Current Liabilities Rs m 9,992 11,057 10.7
Long-term Debt Rs m 0 0 0.0
Total Liabilities Rs m 24,319 28,906 18.9
 
Current assets Rs m 20,715 25,144 21.4
Fixed Assets Rs m 850 932 9.6
Total Assets Rs m 24,319 28,906 18.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



HONEYWELL AUTOMATION Cash Flow Statement Analysis

  • HONEYWELL AUTOMATION's cash flow from operating activities (CFO) during FY19 stood at Rs 3 billion, an improvement of 17.4% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs -4 billion, an improvement of 154.2% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY19 stood at Rs -341 million on a YoY basis.
  • Overall, net cash flows for the company during FY19 stood at Rs -2 billion from the Rs 800 million net cash flows seen during FY18.

HONEYWELL AUTOMATION 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 2,629 3,088 17.4%
Cash Flow from Investing Activities Rs m -1,742 -4,428 -
Cash Flow from Financing Activities Rs m -106 -341 -
Net Cash Flow Rs m 800 -1,655 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for HONEYWELL AUTOMATION

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 405.9, an improvement from the EPS of Rs 282.5 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 25,225.0, stands at 58.5 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 10.5 times, while the price to sales ratio stands at 5.8 times.
  • The company's price to cash flow (P/CF) ratio stood at 59.5 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 3,043.0 3,591.3
TTM Earnings per share Rs 282.5 405.9
Diluted earnings per share Rs 282.5 405.9
Price to Cash Flow x 84.2 59.5
TTM P/E ratio x 58.5 58.5
Price / Book Value ratio x 10.0 10.5
Market Cap Rs m 222,989 222,989
Dividends per share (Unadj.) Rs 32.0 45.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for HONEYWELL AUTOMATION

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 2.3x 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 deteriorated and stood at 160.5x during FY19, from 1,362.5x 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 20.5% during FY19, from 17.6% 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 improved and stood at 32.0% during FY19, from 26.9% 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 12.5% during FY19, from 10.3% 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 2.3
Debtors’ Days Days 80 59
Interest coverage x 1,362.5 160.5
Debt to equity ratio x 0.0 0.0
Return on assets % 10.3 12.5
Return on equity % 17.6 20.5
Return on capital employed % 26.9 32.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

HONEYWELL AUTOMATION Share Price Performance

Over the last one year, HONEYWELL AUTOMATION share price has moved up from Rs 21,841.4 to Rs 25,225.0, registering a gain of Rs 3,383.7 or around 15.5%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 16,786.8 (down 1.0%). Over the last one year it has moved down from 18,168.6 to 16,786.8, a loss of 1,382 points (down 7.6%).

Overall, the S&P BSE SENSEX is down 2.7% over the year.

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

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