BHARAT ELECTRONICS 2017-18 Annual Report Analysis

Sat, 31 Mar

BHARAT ELECTRONICS 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.

BHARAT ELECTRONICS Income Statement Analysis

• Operating income during the year rose 27.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 4.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 17.3% in FY18 as against 21.1% in FY17.
• Depreciation charges increased by 28.4% and finance costs decreased by 64.4% YoY, respectively.
• Other income declined by 9.3% YoY.
• Net profit for the year declined by 6.0% YoY.
• Net profit margins during the year declined from 18.4% in FY17 to 13.6% in FY18.

BHARAT ELECTRONICS Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	81,160	103,164	27.1%
Other income	Rs m	4,987	4,522	-9.3%
Total Revenues	Rs m	86,147	107,687	25.0%
Gross profit	Rs m	17,133	17,829	4.1%
Depreciation	Rs m	2,116	2,717	28.4%
Interest	Rs m	179	64	-64.4%
Profit before tax	Rs m	19,826	19,570	-1.3%
Tax	Rs m	4,855	5,498	13.2%
Profit after tax	Rs m	14,970	14,073	-6.0%
Gross profit margin	%	21.1	17.3
Effective tax rate	%	24.5	28.1
Net profit margin	%	18.4	13.6

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BHARAT ELECTRONICS Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 99 billion as compared to Rs 88 billion in FY17, thereby witnessing an increase of 13.1%.
• Long-term debt stood at Rs 333 million as compared to Rs 167 million during FY17, a growth of 99.9%.
• Current assets rose 2% and stood at Rs 143 billion, while fixed assets rose 41% and stood at Rs 42 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 185 billion as against Rs 171 billion during FY17, thereby witnessing a growth of 9%.

BHARAT ELECTRONICS Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	77,358	80,157	3.6
Current Liabilities	Rs m	87,508	98,962	13.1
Long-term Debt	Rs m	167	333	99.9
Total Liabilities	Rs m	170,673	185,305	8.6
Current assets	Rs m	140,665	143,045	1.7
Fixed Assets	Rs m	30,008	42,259	40.8
Total Assets	Rs m	170,673	185,305	8.6

BHARAT ELECTRONICS Cash Flow Statement Analysis

• BHARAT ELECTRONICS's cash flow from operating activities (CFO) during FY18 stood at Rs -7 billion, an improvement of 1,026.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -64 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -12 billion, an improvement of 58% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -19 billion from the Rs 2 billion net cash flows seen during FY17.

BHARAT ELECTRONICS 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	-609	-6,866	-
Cash Flow from Investing Activities	Rs m	31,147	-64	-
Cash Flow from Financing Activities	Rs m	-28,568	-12,024	-
Net Cash Flow	Rs m	1,969	-18,954	-

Current Valuations for BHARAT ELECTRONICS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 5.8, an decline from the EPS of Rs 6.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 142.1, stands at 24.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.3 times, while the price to sales ratio stands at 3.4 times.
• The company's price to cash flow (P/CF) ratio stood at 24.5 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	36.3	42.3
TTM Earnings per share	Rs	6.7	5.8
Diluted earnings per share	Rs	6.1	5.8
Price to Cash Flow	x	22.3	24.5
TTM P/E ratio	x	24.6	24.7
Price / Book Value ratio	x	39.7	5.1
Market Cap	Rs m	3,069,787	411,175
Dividends per share (Unadj.)	Rs	2.3	2.0

Ratio Analysis for BHARAT ELECTRONICS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.4x during FY18, from 1.6x 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 308.7x during FY18, from 111.9x 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 17.6% during FY18, from 19.4% 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 24.4% during FY18, from 25.8% 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 7.6% during FY18, from 8.9% 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	1.6	1.4
Debtors’ Days	Days	1,965	1,774
Interest coverage	x	111.9	308.7
Debt to equity ratio	x	0.0	0.0
Return on assets	%	8.9	7.6
Return on equity	%	19.4	17.6
Return on capital employed	%	25.8	24.4

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

BHARAT ELECTRONICS Share Price Performance

Over the last one year, BHARAT ELECTRONICS share price has moved down from Rs 156.4 to Rs 142.1, registering a loss of Rs 14.3 or around 9.1%.

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

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

Read: Latest Annual Report Analysis of BHARAT ELECTRONICS