PRAJAY ENGINEERING 2017-18 Annual Report Analysis

Sat, 31 Mar

PRAJAY ENGINEERING 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.

PRAJAY ENGINEERING Income Statement Analysis

• Operating income during the year fell 39.9% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 98.8% YoY during the fiscal. Operating profit margins witnessed a growth and down at 0.1% in FY18 as against 7.6% in FY17.
• Depreciation charges decreased by 11.7% and finance costs increased by 16.9% YoY, respectively.
• Other income grew by 2.2% YoY.
• Net profit for the year declined by 18.5% YoY.
• Net profit margins during the year declined from 35.5% in FY17 to 48.1% in FY18.

PRAJAY ENGINEERING Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	686	412	-39.9%
Other income	Rs m	46	47	2.2%
Total Revenues	Rs m	732	459	-37.3%
Gross profit	Rs m	-52	-1	-98.8%
Depreciation	Rs m	57	51	-11.7%
Interest	Rs m	159	186	16.9%
Profit before tax	Rs m	-223	-191	-14.5%
Tax	Rs m	20	8	-62.7%
Profit after tax	Rs m	-243	-198	-18.5%
Gross profit margin	%	-7.6	-0.1
Effective tax rate	%	-9.2	-4.0
Net profit margin	%	-35.5	-48.1

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PRAJAY ENGINEERING Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 5 billion as compared to Rs 5 billion in FY17, thereby witnessing an increase of 9.0%.
• Long-term debt down at Rs 1 billion as compared to Rs 1 billion during FY17, a fall of 1.9%.
• Current assets rose 2% and stood at Rs 8 billion, while fixed assets rose 2% and stood at Rs 5 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 13 billion as against Rs 13 billion during FY17, thereby witnessing a growth of 2%.

PRAJAY ENGINEERING Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	6,201	5,979	-3.6
Current Liabilities	Rs m	5,013	5,466	9.0
Long-term Debt	Rs m	1,467	1,439	-1.9
Total Liabilities	Rs m	12,817	13,038	1.7
Current assets	Rs m	8,096	8,217	1.5
Fixed Assets	Rs m	4,722	4,820	2.1
Total Assets	Rs m	12,817	13,038	1.7

PRAJAY ENGINEERING Cash Flow Statement Analysis

• PRAJAY ENGINEERING's cash flow from operating activities (CFO) during FY18 stood at Rs 330 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -203 million, an improvement of 3.9% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -122 million, an improvement of 64% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 5 million from the Rs 24 million net cash flows seen during FY17.

PRAJAY ENGINEERING 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	562	330	-41.3%
Cash Flow from Investing Activities	Rs m	-195	-203	-
Cash Flow from Financing Activities	Rs m	-342	-122	-
Net Cash Flow	Rs m	24	5	-80.8%

Current Valuations for PRAJAY ENGINEERING

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -2.8, an improvement from the EPS of Rs -3.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 10.9, stands at -3.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.1 times, while the price to sales ratio stands at 1.8 times.
• The company's price to cash flow (P/CF) ratio stood at -6.6 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	9.8	5.9
TTM Earnings per share	Rs	-3.5	-2.8
Diluted earnings per share	Rs	-3.5	-2.8
Price to Cash Flow	x	-4.2	-6.6
TTM P/E ratio	x	-3.6	-3.6
Price / Book Value ratio	x	0.1	0.2
Market Cap	Rs m	766	974
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for PRAJAY ENGINEERING

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.5x 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 0.0x during FY18, from -0.4x 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 -3.3% during FY18, from -3.9% 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 -0.1% during FY18, from -0.8% 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 improved and stood at -0.1% during FY18, from -0.7% 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	1.6	1.5
Debtors’ Days	Days	11,091	18,382
Interest coverage	x	-0.4	0.0
Debt to equity ratio	x	0.2	0.2
Return on assets	%	-0.7	-0.1
Return on equity	%	-3.9	-3.3
Return on capital employed	%	-0.8	-0.1

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

PRAJAY ENGINEERING Share Price Performance

Over the last one year, PRAJAY ENGINEERING share price has moved down from Rs 11.1 to Rs 10.9, registering a loss of Rs 0.2 or around 2.0%.

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 PRAJAY ENGINEERING and quarterly results for PRAJAY ENGINEERING)