HDIL 2017-18 Annual Report Analysis

Sat, 31 Mar

HDIL 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.

HDIL Income Statement Analysis

• Operating income during the year fell 46.4% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 34.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 103.9% in FY18 as against 84.7% in FY17.
• Depreciation charges decreased by 8.9% and finance costs decreased by 18.5% YoY, respectively.
• Other income declined by 59.8% YoY.
• Net profit for the year declined by 46.5% YoY.
• Net profit margins during the year declined from 24.7% in FY17 to 24.7% in FY18.

HDIL Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	7,238	3,878	-46.4%
Other income	Rs m	345	139	-59.8%
Total Revenues	Rs m	7,583	4,016	-47.0%
Gross profit	Rs m	6,131	4,027	-34.3%
Depreciation	Rs m	75	68	-8.9%
Interest	Rs m	4,284	3,493	-18.5%
Profit before tax	Rs m	2,117	604	-71.4%
Tax	Rs m	328	-352	-207.4%
Profit after tax	Rs m	1,789	957	-46.5%
Gross profit margin	%	84.7	103.9
Effective tax rate	%	15.5	-58.3
Net profit margin	%	24.7	24.7

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HDIL Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 64 billion as compared to Rs 54 billion in FY17, thereby witnessing an increase of 18.2%.
• Long-term debt down at Rs 7 billion as compared to Rs 16 billion during FY17, a fall of 54.5%.
• Current assets rose 1% and stood at Rs 185 billion, while fixed assets rose 9% and stood at Rs 4 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 188 billion as against Rs 186 billion during FY17, thereby witnessing a growth of 1%.

HDIL Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	114,760	115,726	0.8
Current Liabilities	Rs m	54,494	64,402	18.2
Long-term Debt	Rs m	16,251	7,395	-54.5
Total Liabilities	Rs m	185,950	188,340	1.3
Current assets	Rs m	182,517	184,599	1.1
Fixed Assets	Rs m	3,434	3,742	9.0
Total Assets	Rs m	185,950	188,340	1.3

HDIL Cash Flow Statement Analysis

• HDIL's cash flow from operating activities (CFO) during FY18 stood at Rs 4 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs 176 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -5 billion, an improvement of 34% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -119 million from the Rs -353 million net cash flows seen during FY17.

HDIL 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	6,158	4,235	-31.2%
Cash Flow from Investing Activities	Rs m	367	176	-51.9%
Cash Flow from Financing Activities	Rs m	-6,878	-4,530	-
Net Cash Flow	Rs m	-353	-119	-

Current Valuations for HDIL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 2.2, an decline from the EPS of Rs 4.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 38.7, stands at 19.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.2 times, while the price to sales ratio stands at 4.3 times.
• The company's price to cash flow (P/CF) ratio stood at 29.7 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	16.7	8.9
TTM Earnings per share	Rs	4.1	2.2
Diluted earnings per share	Rs	3.8	2.0
Price to Cash Flow	x	20.8	29.7
TTM P/E ratio	x	25.1	19.1
Price / Book Value ratio	x	0.3	0.3
Market Cap	Rs m	34,959	30,445
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for HDIL

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.9x during FY18, from 3.3x 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 1.2x during FY18, from 1.5x 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 0.8% during FY18, from 1.6% 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 3.3% during FY18, from 4.9% 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 declined and down at 2.4% during FY18, from 3.3% 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	3.3	2.9
Debtors’ Days	Days	1,547	4,028
Interest coverage	x	1.5	1.2
Debt to equity ratio	x	0.1	0.1
Return on assets	%	3.3	2.4
Return on equity	%	1.6	0.8
Return on capital employed	%	4.9	3.3

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

HDIL Share Price Performance

Over the last one year, HDIL share price has moved down from Rs 81.9 to Rs 38.7, registering a loss of Rs 43.2 or around 52.8%.

Meanwhile, the S&P BSE REALTY Index is trading at Rs 2,229.9 (down 1.1%). Over the last one year it has moved up from 1,600.0 to 2,229.9, a gain of 630 points (up 39.4%).

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

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