NMDC 2017-18 Annual Report Analysis

Sat, 31 Mar

NMDC 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.

NMDC Income Statement Analysis

• Operating income during the year rose 31.6% on a year-on-year (YoY) basis.
• The company's operating profit increased by 65.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 51.2% in FY18 as against 40.7% in FY17.
• Depreciation charges increased by 30.5% and finance costs increased by 78.5% YoY, respectively.
• Other income declined by 42.5% YoY.
• Net profit for the year grew by 47.2% YoY.
• Net profit margins during the year grew from 29.3% in FY17 to 32.7% in FY18.

NMDC Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	88,266	116,149	31.6%
Other income	Rs m	9,094	5,232	-42.5%
Total Revenues	Rs m	97,361	121,381	24.7%
Gross profit	Rs m	35,948	59,464	65.4%
Depreciation	Rs m	1,967	2,566	30.5%
Interest	Rs m	208	371	78.5%
Profit before tax	Rs m	42,868	61,759	44.1%
Tax	Rs m	17,038	23,731	39.3%
Profit after tax	Rs m	25,830	38,028	47.2%
Gross profit margin	%	40.7	51.2
Effective tax rate	%	39.7	38.4
Net profit margin	%	29.3	32.7

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NMDC Balance Sheet Analysis

• The company's current liabilities during FY18 down at Rs 93 billion as compared to Rs 94 billion in FY17, thereby witnessing an decrease of -1.1%.
• Current assets fell 1% and stood at Rs 147 billion, while fixed assets rose 12% and stood at Rs 194 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 341 billion as against Rs 322 billion during FY17, thereby witnessing a growth of 6%.

NMDC Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	225,822	244,174	8.1
Current Liabilities	Rs m	94,378	93,309	-1.1
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	321,933	340,916	5.9
Current assets	Rs m	148,392	146,503	-1.3
Fixed Assets	Rs m	173,541	194,413	12.0
Total Assets	Rs m	321,933	340,916	5.9

NMDC Cash Flow Statement Analysis

• NMDC's cash flow from operating activities (CFO) during FY18 stood at Rs 34 billion, an improvement of 60.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -19 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -16 billion, an improvement of 79% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -458 million from the Rs 305 million net cash flows seen during FY17.

NMDC 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	21,085	33,763	60.1%
Cash Flow from Investing Activities	Rs m	51,713	-18,649	-
Cash Flow from Financing Activities	Rs m	-72,493	-15,572	-
Net Cash Flow	Rs m	305	-458	-

Current Valuations for NMDC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 12.0, an improvement from the EPS of Rs 8.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 118.7, stands at 9.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.4 times, while the price to sales ratio stands at 3.2 times.
• The company's price to cash flow (P/CF) ratio stood at 10.3 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	27.9	36.7
TTM Earnings per share	Rs	8.2	12.0
Diluted earnings per share	Rs	8.8	13.0
Price to Cash Flow	x	14.0	10.3
TTM P/E ratio	x	16.3	9.1
Price / Book Value ratio	x	1.7	1.7
Market Cap	Rs m	376,187	419,769
Dividends per share (Unadj.)	Rs	5.2	4.3

Ratio Analysis for NMDC

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.6x 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 deteriorated and stood at 167.5x during FY18, from 207.3x 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 15.6% during FY18, from 11.4% 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 improved and stood at 25.4% during FY18, from 19.1% 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 11.3% during FY18, from 8.1% 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	1.6
Debtors’ Days	Days	4	5
Interest coverage	x	207.3	167.5
Debt to equity ratio	x	0.0	0.0
Return on assets	%	8.1	11.3
Return on equity	%	11.4	15.6
Return on capital employed	%	19.1	25.4

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

NMDC Share Price Performance

Over the last one year, NMDC share price has moved down from Rs 133.1 to Rs 118.7, registering a loss of Rs 14.5 or around 10.9%.

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

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

Read: Latest Annual Report Analysis of NMDC