FINANCIAL RATIOS

201920182017201620152014
Profitability Ratios
Gross Profit ratio % 3.12 3.73 4.23 3.32 2.51 3.10
Net Profit ratio % 0.92 1.45 2.08 1.52 0.76 1.84
EBITDA to Sales % 2.39 3.14 4.14 3.61 2.63 3.67
Return on Shareholders' Equity % 8.88 14.00 17.72 11.22 8.43 27.75
Return on capital employed % 4.97 7.13 8.48 5.39 3.90 17.53
Operating Leverage Ratio % (213.49) (40.07) 170.92 (6.54) 198.03 736.93

Analysis

The variation in ratios as compared to FY 2018 is because of the following:
Gross Profit ratio has declined primarily due to increase in net sales by 8.5% due to rise in oil prices whereas gross profit has decreased by 9.1%.
Net profit ratio went down primarily due to increase in net sales by 8.5% and decline in net profit by 31.5%.
EBITDA margins has decreased primarily due to increase in net sales by 8.5% and decline in EBITDA by 17.4%
- Decline in return on shareholders' equity and capital employed is mainly due to decline in net profit by 31.5%.
Negative operating leverage is due to decline of 18.1% in EBIT against an increase of 8.5% in net sales.

 

201920182017201620152014
Capital Structure Ratios
Interest Cover ratio (x) 2.96 6.30 5.95 3.28 2.09 4.45
Financial Leverage ratio (x) 90.00 81.00 127.00 115.00 124.00 117.00
D/E ratio - as per book value (x) 90.00 81.00 127.00 115.00 124.00 117.00
D/E ratio - as per market value (x) 161.20 86.58 124.00 103.04 97.39 87.39
Weighted Average Cost of Debt % 8.58 4.10 4.66 5.02 9.68 11.08
Economic Value Addition Rs. In Mn (14,962) (8,075) (4,570) (9,903) (11,571) 4,516

Analysis

The variation in ratios as compared to FY 2018 is because of the following:
- Interest cover has decreased primarily due to increase in finance cost by 74.5%.
- Financial leverage and debt to equity ratio (as per book values) has increased during the period mainly on account of increase in average borrowing levels.
- Weighted average cost of debt has increased due to significant increase in borrowing rates.

201920182017201620152014
Liquidity Ratios
Cash to Current Liabilities (x) (0.06) (0.03) (0.15) (0.12) (0.16) 0.03
Cash Flow from Operations to Sales (x) (0.01) 0.002 (0.03) (0.001) (0.03) (0.04)
Current Ratio (x) 1.32 1.32 1.31 1.12 1.10 1.09
Quick Ratio (x) 1.01 1.03 1.07 0.91 0.87 0.79
Free Cash Flows to the Company Rs. In Mn. (3,047) 8,063 (18,742) 6,594 (15,171) (54,175)
Free Cash Flows to the Equity Holders Rs. In Mn. 462 (2,464) (6,191) 12,091 (41,668) 7,512

Analysis

The variation in ratios as compared to FY 2018 is because of the following:
- Cash to current liabilities has slightly decreased due to increase in short term borrowings by 19%.
- Cash flow from operations to sales has decreased primarily due to decrease in trade payable and increase in other receivables.
- Current ratio has remained almost same.
- Quick ratio has slightly decreased due to increase in stocks by 9.9%.
- Decline in cash flows to the Company are primarily due to decrease in working capital and EBIT.
- Increase in cash flows to the equity holders are primarily due to increase in borrowing levels by 19%.

201920182017201620152014
Investment Ratios
Earning per share (basic & diluted) Rs. 27.1 39.5 46.6 26.3 17.7 55.8
Market value per share (Year End) Rs. 169.6 318.3 387.4 375.5 385.8 388.9
Highest Price Rs. 352.1 466.6 486.1 399.6 408.1 452.4
Lowest Price Rs. 152.0 265.2 379.9 287.0 325.6 262.1
Break-up value Rs. 304.6 282.3 262.9 234.1 210.4 201.0
Price earning ratio (P/E) (x) 6.3 8.1 8.3 14.3 21.8 7.0
Price to Book Ratio (x) 0.6 1.1 1.5 1.6 1.8 1.9
Dividend per share Rs. 10.0 15.0 25.0 12.5 10.0 8.0
Bonus share % 20.0 20.0 20.0 - - 10.0
Dividend payout (including bonus) % 44.4 43.0 58.0 47.6 56.4 16.1
Dividend yield (including bonus) % 7.1 5.3 7.0 3.3 2.6 2.3
Dividend cover ratio (including bonus) (x) 2.3 2.8 2.5 3.0 2.6 8.9

 

Analysis

The variation in ratios as compared to FY 2018 is because of the following:
- Price earning ratio has declined due to more decrease in market value per share i.e., by 46.7% (on account of overall economic situation) in comparison to decrease in EPS i.e., by 31.5%.
- Decline in price to book ratio is primarily to decline in market value per share by 46.7%.
- Dividend yield has increased primarily due to decline in market value per share by 46.7%.
- Dividend payout has increased primarily due to decline in EPS by 31.5%.
- Dividend cover has decreased due to decline in EPS by 31.5%.
- Breakup value per share has increased due to profit retained during the year.

201920182017201620152014
Activity/Turnover Ratios
Inventory turnover ratio (x) 13.06 13.84 14.36 11.99 12.30 11.96
No. of days in Inventory No. 28.00 26.00 25.00 30.00 30.00 31.00
Debtor turnover ratio (x) 5.77 5.73 5.61 5.05 6.26 11.19
No. of days in Receivables No. 63.00 64.00 65.00 72.00 58.00 33.00
Creditor turnover ratio (x) 10.15 10.75 11.64 8.50 8.20 8.80
No. of days in Creditors No. 36.00 34.00 31.00 43.00 45.00 41.00
Total asset turnover ratio (x) 3.27 3.30 2.98 2.65 3.12 4.31
Fixed asset turnover ratio (x) 172.07 183.24 160.93 138.97 181.35 246.13
Operating Cycle No. 55.00 56.00 59.00 59.00 43.00 23.00

Analysis

The variation in ratios as compared to FY 2018 is as follows:
- Inventory turnover has decreased primarily due to increase in inventory by 9.8% on account of increase in international oil prices which was partially offset by 2.2% increase in gross revenue.
- Debtors turnover has increased primarily due to decrease in trade debts by 10.6% on account of recoveries from power sector during the period which is partially offset by increase in receivables from SNGPL.
- Creditors turnover has decreased primarily due to increase in cost of purchases by 8.4% on account of increase in international oil prices.
- Operating cycle has decreased primarily due to increase in creditor days on account of increase in cost of purchases (because of increase in international oil prices).
- Total Assets and Fixed Asset turnover has decreased by 0.9% and 6.1% mainly due to increase in gross revenue by 2.2% and increase in total assets by 3.6% and fixed assets by 12.1%.