STC INDIA 2017-18 Annual Report Analysis

Sat, 31 Mar

STC INDIA 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.

STC INDIA Income Statement Analysis

• Operating income during the year rose 39.0% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 70.1% YoY during the fiscal. Operating profit margins witnessed a growth and down at 0.7% in FY18 as against 3.2% in FY17.
• Depreciation charges decreased by 0.1% and finance costs increased by 16.0% YoY, respectively.
• Other income grew by 12.3% YoY.
• Net profit for the year declined by 15.4% YoY.
• Net profit margins during the year grew from 9.3% in FY17 to 5.7% in FY18.

STC INDIA Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	78,145	108,657	39.0%
Other income	Rs m	2,733	3,070	12.3%
Total Revenues	Rs m	80,878	111,727	38.1%
Gross profit	Rs m	-2,477	-740	-70.1%
Depreciation	Rs m	167	167	-0.1%
Interest	Rs m	7,206	8,361	16.0%
Profit before tax	Rs m	-7,117	-6,198	-12.9%
Tax	Rs m	169	-36	-121.4%
Profit after tax	Rs m	-7,285	-6,162	-15.4%
Gross profit margin	%	-3.2	-0.7
Effective tax rate	%	-2.4	0.6
Net profit margin	%	-9.3	-5.7

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STC INDIA Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 71 billion as compared to Rs 60 billion in FY17, thereby witnessing an increase of 18.5%.
• Current assets rose 16% and stood at Rs 26 billion, while fixed assets fell 0% and stood at Rs 20 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 46 billion as against Rs 42 billion during FY17, thereby witnessing a growth of 8%.

STC INDIA Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	-30,157	-36,319	20.4
Current Liabilities	Rs m	60,049	71,154	18.5
Long-term Debt	Rs m	1,463	0	-100.0
Total Liabilities	Rs m	42,126	45,601	8.2
Current assets	Rs m	22,509	26,037	15.7
Fixed Assets	Rs m	19,617	19,564	-0.3
Total Assets	Rs m	42,126	45,601	8.2

STC INDIA Cash Flow Statement Analysis

• STC INDIA's cash flow from operating activities (CFO) during FY18 stood at Rs 2 billion, an improvement of 190.6% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs 357 million, an improvement of 8.4% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -2 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 138 million from the Rs -17 million net cash flows seen during FY17.

STC INDIA 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	713	2,071	190.6%
Cash Flow from Investing Activities	Rs m	330	357	8.4%
Cash Flow from Financing Activities	Rs m	-1,060	-2,291	-
Net Cash Flow	Rs m	-17	138	-

Current Valuations for STC INDIA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -102.7, an improvement from the EPS of Rs -121.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 135.9, stands at 21.7 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 0.1 times.
• The company's price to cash flow (P/CF) ratio stood at -2.2 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	1,302.4	1,811.0
TTM Earnings per share	Rs	-121.4	-102.7
Diluted earnings per share	Rs	-121.4	-102.7
Price to Cash Flow	x	-1.3	-2.2
TTM P/E ratio	x	-5.8	21.7
Price / Book Value ratio	x	-0.3	-0.4
Market Cap	Rs m	9,963	13,020
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for STC INDIA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.4x during FY18, from 0.4x 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 0.3x during FY18, from 0.0x 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 17.0% during FY18, from 24.2% 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 -6.0% during FY18, from -0.3% 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 4.8% during FY18, from -0.2% 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	0.4	0.4
Debtors’ Days	Days	10	7
Interest coverage	x	0.0	0.3
Debt to equity ratio	x	0.0	0.0
Return on assets	%	-0.2	4.8
Return on equity	%	24.2	17.0
Return on capital employed	%	-0.3	-6.0

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

STC INDIA Share Price Performance

Over the last one year, STC INDIA share price has moved down from Rs 159.0 to Rs 135.9, registering a loss of Rs 23.1 or around 14.5%.

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

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