WEST COAST PAPER MILLS 2017-18 Annual Report Analysis

Sat, 31 Mar

WEST COAST PAPER MILLS 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.

WEST COAST PAPER MILLS Income Statement Analysis

• Operating income during the year rose 1.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 7.1% YoY during the fiscal. Operating profit margins witnessed a fall and down at 21.5% in FY18 as against 20.3% in FY17.
• Depreciation charges increased by 4.7% and finance costs decreased by 19.2% YoY, respectively.
• Other income grew by 668.8% YoY.
• Net profit for the year grew by 73.7% YoY.
• Net profit margins during the year grew from 7.7% in FY17 to 13.2% in FY18.

WEST COAST PAPER MILLS Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	16,620	16,865	1.5%
Other income	Rs m	24	182	668.8%
Total Revenues	Rs m	16,643	17,047	2.4%
Gross profit	Rs m	3,381	3,621	7.1%
Depreciation	Rs m	1,110	1,162	4.7%
Interest	Rs m	516	417	-19.2%
Profit before tax	Rs m	1,779	2,225	25.1%
Tax	Rs m	494	-7	-101.4%
Profit after tax	Rs m	1,285	2,232	73.7%
Gross profit margin	%	20.3	21.5
Effective tax rate	%	27.8	-0.3
Net profit margin	%	7.7	13.2

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WEST COAST PAPER MILLS Balance Sheet Analysis

• The company's current liabilities during FY18 down at Rs 4 billion as compared to Rs 5 billion in FY17, thereby witnessing an decrease of -15.1%.
• Long-term debt down at Rs 2 billion as compared to Rs 2 billion during FY17, a fall of 11.4%.
• Current assets rose 5% and stood at Rs 5 billion, while fixed assets rose 6% and stood at Rs 12 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 17 billion as against Rs 16 billion during FY17, thereby witnessing a growth of 6%.

WEST COAST PAPER MILLS Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	6,364	8,362	31.4
Current Liabilities	Rs m	4,520	3,838	-15.1
Long-term Debt	Rs m	2,374	2,103	-11.4
Total Liabilities	Rs m	15,719	16,585	5.5
Current assets	Rs m	4,810	5,056	5.1
Fixed Assets	Rs m	10,908	11,529	5.7
Total Assets	Rs m	15,719	16,585	5.5

WEST COAST PAPER MILLS Cash Flow Statement Analysis

• WEST COAST PAPER MILLS's cash flow from operating activities (CFO) during FY18 stood at Rs 3 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -1 billion, an improvement of 256.9% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -2 billion, an improvement of 51% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -64 million from the Rs 12 million net cash flows seen during FY17.

WEST COAST PAPER MILLS 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	4,342	3,262	-24.9%
Cash Flow from Investing Activities	Rs m	-389	-1,387	-
Cash Flow from Financing Activities	Rs m	-3,941	-1,939	-
Net Cash Flow	Rs m	12	-64	-

Current Valuations for WEST COAST PAPER MILLS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 33.8, an improvement from the EPS of Rs 19.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 239.4, stands at 7.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.9 times, while the price to sales ratio stands at 0.9 times.
• The company's price to cash flow (P/CF) ratio stood at 5.0 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	251.6	255.3
TTM Earnings per share	Rs	19.5	33.8
Diluted earnings per share	Rs	19.5	33.8
Price to Cash Flow	x	4.8	5.0
TTM P/E ratio	x	9.0	7.1
Price / Book Value ratio	x	1.3	2.0
Market Cap	Rs m	8,469	17,113
Dividends per share (Unadj.)	Rs	2.5	4.0

Ratio Analysis for WEST COAST PAPER MILLS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.3x during FY18, from 1.1x 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 improved and stood at 6.3x during FY18, from 4.4x 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 improved and stood at 26.7% during FY18, from 20.2% 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 25.2% during FY18, from 26.3% 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 improved and stood at 16.0% during FY18, from 11.5% 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	1.1	1.3
Debtors’ Days	Days	282	257
Interest coverage	x	4.4	6.3
Debt to equity ratio	x	0.4	0.3
Return on assets	%	11.5	16.0
Return on equity	%	20.2	26.7
Return on capital employed	%	26.3	25.2

To see how WEST COAST PAPER MILLS has performed over the last 5 years, please visit here.

WEST COAST PAPER MILLS Share Price Performance

Over the last one year, WEST COAST PAPER MILLS share price has moved up from Rs 175.3 to Rs 239.4, registering a gain of Rs 64.1 or around 36.6%.

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

(To know more, check out historical annual results for WEST COAST PAPER MILLS and quarterly results for WEST COAST PAPER MILLS)

Read: Latest Annual Report Analysis of WEST COAST PAPER MILLS