CEAT LTD. 2017-18 Annual Report Analysis
Tue, 21 Aug

CEAT LTD. 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.

CEAT LTD. Income Statement Analysis

  • Operating income during the year rose 8.1% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 6.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 9.9% in FY18 as against 11.4% in FY17.
  • Depreciation charges and finance costs increased by 17.8% YoY and 19.1% YoY, respectively.
  • Other income grew by 58.1% YoY.
  • Net profit for the year declined by 35.1% YoY.
  • Net profit margins during the year declined from 6.2% in FY17 to 3.7% in FY18.

CEAT LTD. Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 57,665 62,308 8.1%
Other income Rs m 186 295 58.1%
Total Revenues Rs m 57,851 62,602 8.2%
Gross profit Rs m 6,568 6,148 -6.4%
Depreciation Rs m 1,431 1,686 17.8%
Interest Rs m 817 974 19.1%
Profit before tax Rs m 4,506 3,783 -16.1%
Tax Rs m 1,064 1,340 25.9%
Profit after tax Rs m 3,592 2,333 -35.1%
Gross profit margin % 11.4 9.9
Effective tax rate % 23.6 35.4
Net profit margin % 6.2 3.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



CEAT LTD. Balance Sheet Analysis

  • The company's current liabilities during FY18 stood at Rs 18 billion as compared to Rs 14 billion in FY17, thereby witnessing an increase of 30.7%.
  • Long-term debt down at Rs 5 billion as compared to Rs 9 billion during FY17, a fall of 47.1%.
  • Current assets fell 1% and stood at Rs 18 billion, while fixed assets rose 9% and stood at Rs 30 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 52 billion as against Rs 49 billion during FY17, thereby witnessing a growth of 5%.

CEAT LTD. Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 24,150 26,061 7.9
 
Current Liabilities Rs m 14,079 18,400 30.7
Long-term Debt Rs m 8,524 4,512 -47.1
Total Liabilities Rs m 49,169 51,610 5.0
 
Current assets Rs m 18,420 18,146 -1.5
Fixed Assets Rs m 27,788 30,338 9.2
Total Assets Rs m 49,169 51,610 5.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



CEAT LTD. Cash Flow Statement Analysis

  • CEAT LTD.'s cash flow from operating activities (CFO) during FY18 stood at Rs 7 billion, an improvement of 101.9% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -4 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -2 billion on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs 582 million from the Rs 104 million net cash flows seen during FY17.

CEAT LTD. 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 3,347 6,757 101.9%
Cash Flow from Investing Activities Rs m -5,434 -4,151 -
Cash Flow from Financing Activities Rs m 2,191 -2,025 -
Net Cash Flow Rs m 104 582 462.0%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for CEAT LTD.

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 57.7, an decline from the EPS of Rs 88.8 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 1,415.8, stands at 19.6 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.6 times, while the price to sales ratio stands at 1.1 times.
  • The company's price to cash flow (P/CF) ratio stood at 15.1 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 1,425.6 1,540.4
TTM Earnings per share Rs 88.8 57.7
Diluted earnings per share Rs 88.8 57.7
Price to Cash Flow x 12.1 15.1
TTM P/E ratio x 19.6 19.6
Price / Book Value ratio x 1.8 2.6
Market Cap Rs m 57,267 57,267
Dividends per share (Unadj.) Rs 11.5 11.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for CEAT LTD.

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 1.0x during FY18, from 1.3x 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 deteriorated and stood at 4.9x during FY18, from 6.5x 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 declined and down at 9.0% during FY18, from 14.9% 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 15.2% during FY18, from 16.8% 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 declined and down at 6.4% during FY18, from 9.0% 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 1.3 1.0
Debtors’ Days Days 39 44
Interest coverage x 6.5 4.9
Debt to equity ratio x 0.4 0.2
Return on assets % 9.0 6.4
Return on equity % 14.9 9.0
Return on capital employed % 16.8 15.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

CEAT LTD. Share Price Performance

Over the last one year, CEAT LTD. share price has moved up from Rs 1,675.6 to Rs 1,415.8, registering a loss of Rs 259.8 or around 15.5%.

Overall, the S&P BSE SENSEX is up 22.5% over the year.

(To know more, check out historical annual results for CEAT LTD. and quarterly results for CEAT LTD.)