DEEPAK FERTILISERS 2017-18 Annual Report Analysis

Sat, 31 Mar

DEEPAK FERTILISERS 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.

DEEPAK FERTILISERS Income Statement Analysis

• Operating income during the year rose 51.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 15.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 9.2% in FY18 as against 12.1% in FY17.
• Depreciation charges increased by 20.9% and finance costs increased by 42.6% YoY, respectively.
• Other income grew by 51.9% YoY.
• Net profit for the year grew by 6.1% YoY.
• Net profit margins during the year declined from 4.0% in FY17 to 2.8% in FY18.

DEEPAK FERTILISERS Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	39,221	59,282	51.1%
Other income	Rs m	159	241	51.9%
Total Revenues	Rs m	39,380	59,523	51.2%
Gross profit	Rs m	4,734	5,452	15.2%
Depreciation	Rs m	1,350	1,632	20.9%
Interest	Rs m	1,215	1,732	42.6%
Profit before tax	Rs m	2,328	2,329	0.1%
Tax	Rs m	758	664	-12.4%
Profit after tax	Rs m	1,569	1,665	6.1%
Gross profit margin	%	12.1	9.2
Effective tax rate	%	32.6	28.5
Net profit margin	%	4.0	2.8

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DEEPAK FERTILISERS Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 42 billion as compared to Rs 25 billion in FY17, thereby witnessing an increase of 68.5%.
• Long-term debt stood at Rs 6 billion as compared to Rs 5 billion during FY17, a growth of 32.7%.
• Current assets rose 62% and stood at Rs 35 billion, while fixed assets rose 25% and stood at Rs 34 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 69 billion as against Rs 49 billion during FY17, thereby witnessing a growth of 41%.

DEEPAK FERTILISERS Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	20,162	20,462	1.5
Current Liabilities	Rs m	25,104	42,311	68.5
Long-term Debt	Rs m	4,715	6,255	32.7
Total Liabilities	Rs m	48,897	68,971	41.1
Current assets	Rs m	21,835	35,276	61.6
Fixed Assets	Rs m	27,061	33,696	24.5
Total Assets	Rs m	48,897	68,971	41.1

DEEPAK FERTILISERS Cash Flow Statement Analysis

• DEEPAK FERTILISERS's cash flow from operating activities (CFO) during FY18 stood at Rs -1 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -11 billion, an improvement of 35.6% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs 13 billion, an improvement of 1,662% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -10 million from the Rs -1 billion net cash flows seen during FY17.

DEEPAK FERTILISERS 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	7,962	-1,315	-
Cash Flow from Investing Activities	Rs m	-8,399	-11,387	-
Cash Flow from Financing Activities	Rs m	-813	12,692	-
Net Cash Flow	Rs m	-1,250	-10	-

Current Valuations for DEEPAK FERTILISERS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 18.9, an improvement from the EPS of Rs 17.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 287.1, stands at 19.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.7 times, while the price to sales ratio stands at 0.4 times.
• The company's price to cash flow (P/CF) ratio stood at 9.8 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	444.7	672.1
TTM Earnings per share	Rs	17.8	18.9
Diluted earnings per share	Rs	13.0	13.8
Price to Cash Flow	x	10.8	9.8
TTM P/E ratio	x	19.8	19.3
Price / Book Value ratio	x	0.9	1.6
Market Cap	Rs m	18,971	32,318
Dividends per share (Unadj.)	Rs	6.0	6.0

Ratio Analysis for DEEPAK FERTILISERS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.8x during FY18, from 0.9x 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 2.3x during FY18, from 2.9x 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 improved and stood at 8.1% during FY18, from 7.8% 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 15.2% during FY18, from 14.2% 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 4.9% during FY18, from 5.7% 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	0.9	0.8
Debtors’ Days	Days	1,220	1,210
Interest coverage	x	2.9	2.3
Debt to equity ratio	x	0.2	0.3
Return on assets	%	5.7	4.9
Return on equity	%	7.8	8.1
Return on capital employed	%	14.2	15.2

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

DEEPAK FERTILISERS Share Price Performance

Over the last one year, DEEPAK FERTILISERS share price has moved up from Rs 261.7 to Rs 287.1, registering a gain of Rs 25.4 or around 9.7%.

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

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

Read: Latest Annual Report Analysis of DEEPAK FERTILISERS