TITAN COMPANY 2017-18 Annual Report Analysis

Sat, 31 Mar

TITAN 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.

TITAN Income Statement Analysis

• Operating income during the year rose 22.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 54.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 10.1% in FY18 as against 8.0% in FY17.
• Depreciation charges increased by 18.9% and finance costs increased by 40.2% YoY, respectively.
• Other income grew by 24.0% YoY.
• Net profit for the year grew by 58.0% YoY.
• Net profit margins during the year grew from 5.3% in FY17 to 6.9% in FY18.

TITAN Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	131,395	160,836	22.4%
Other income	Rs m	717	889	24.0%
Total Revenues	Rs m	132,112	161,725	22.4%
Gross profit	Rs m	10,516	16,280	54.8%
Depreciation	Rs m	1,105	1,314	18.9%
Interest	Rs m	377	529	40.2%
Profit before tax	Rs m	9,750	15,326	57.2%
Tax	Rs m	2,760	4,279	55.0%
Profit after tax	Rs m	6,991	11,047	58.0%
Gross profit margin	%	8.0	10.1
Effective tax rate	%	28.3	27.9
Net profit margin	%	5.3	6.9

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TITAN Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 43 billion as compared to Rs 40 billion in FY17, thereby witnessing an increase of 7.1%.
• Current assets rose 13% and stood at Rs 76 billion, while fixed assets rose 13% and stood at Rs 19 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 95 billion as against Rs 84 billion during FY17, thereby witnessing a growth of 13%.

TITAN Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	42,330	50,872	20.2
Current Liabilities	Rs m	40,278	43,154	7.1
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	84,043	94,882	12.9
Current assets	Rs m	67,357	76,010	12.8
Fixed Assets	Rs m	16,686	18,871	13.1
Total Assets	Rs m	84,043	94,882	12.9

TITAN Cash Flow Statement Analysis

• TITAN's cash flow from operating activities (CFO) during FY18 stood at Rs -511 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs 964 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -3 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -2 billion from the Rs 6 billion net cash flows seen during FY17.

TITAN 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	17,123	-511	-
Cash Flow from Investing Activities	Rs m	-9,844	964	-
Cash Flow from Financing Activities	Rs m	-1,656	-2,525	-
Net Cash Flow	Rs m	5,623	-2,060	-

Current Valuations for TITAN

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 12.4, an improvement from the EPS of Rs 7.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 941.2, stands at 75.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 16.4 times, while the price to sales ratio stands at 5.2 times.
• The company's price to cash flow (P/CF) ratio stood at 51.0 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	148.0	181.2
TTM Earnings per share	Rs	7.9	12.4
Diluted earnings per share	Rs	7.9	12.4
Price to Cash Flow	x	50.6	51.0
TTM P/E ratio	x	53.5	75.0
Price / Book Value ratio	x	8.4	12.4
Market Cap	Rs m	357,073	630,160
Dividends per share (Unadj.)	Rs	2.6	3.8

Ratio Analysis for TITAN

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.8x during FY18, from 1.7x 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 30.0x during FY18, from 26.8x 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 21.7% during FY18, from 16.5% 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 improved and stood at 31.2% during FY18, from 23.9% 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 12.2% during FY18, from 8.8% 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	1.7	1.8
Debtors’ Days	Days	58	67
Interest coverage	x	26.8	30.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	8.8	12.2
Return on equity	%	16.5	21.7
Return on capital employed	%	23.9	31.2

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

TITAN Share Price Performance

Over the last one year, TITAN share price has moved up from Rs 461.3 to Rs 941.2, registering a gain of Rs 479.9 or around 104.0%.

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

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

Read: Latest Annual Report Analysis of TITAN