DSIJ.in JULY 22 - AUG 4, 2019 I DALAL STREET INVESTMENT JOURNAL (^67)
Performance
To analyse the electrical equipment industry, we considered the
performance of top 27 companies in the industry by market
capitalisation. The net sales of these 27 companies grew by an
impressive 24 per cent in FY19 when compared to FY18. This
reflects almost 5 times higher growth in FY19 when compared
to growth in FY18. The net sales grew by a mere 5 per cent in
FY18 over FY17.
Similarly, the operating profits grew by an impressive 71 per
cent in FY19 over FY18. The operating profits for FY18 grew by
27 per cent for these leading 26 companies.
The net income de-grew by 18 per cent in FY18 over FY17. The
net income, however, reflected an impressive growth of almost
67 per cent in FY19 over FY18.
We observe that HFCL, Inox Wind, HEG, Graphite India,
Majestic Auto, Olectra Greentech, Sterlite Technologies,
Paramount Communications and Apar Industries are some of
the outperformers in the sector.
Aksh Optifibre, Swelect Energy Systems and Suzlon Energy are
some of the underperformers in the sector, reporting de-growth
in net sales in FY19 over FY18.
HFCL, Graphite India, HEG, Sterlite Technologies, Paramount
Communications, KEI industries, V-Guard Industries, Havells
India, CMI, Polycab India and Precision Wires India are some
of the companies with return on net worth (RONW) greater
than 15.
Government initiatives
The Government of India (GoI), looking at the importance and
growth potential of the sector, has taken several steps to
facilitate growth. GoI has formulated a ‘Vision 2022’ strategy
that focuses on:
✓ Industry competitiveness
✓ Upgrading technology
✓ Skill development
✓ Promotion of exports and
✓ Conversion of latent demand.
Taking a macro view on the economy and assuming GDP
growth of more than 7 per cent per annum, it is obvious that the
Indian electrical equipment sector will play an important role.
The industry can be expected to grow faster than even the GDP
growth.
12.57 10.60 7.91 21.82 13.51 16.69 18.59 19.77 18.87 15.83 62.55 62.51 62.49
25.31 31.93 81.85 12.21 25.93 -20.72 -20.71 11.27 15.68 48.88 71.20 71.20 71.22
3.92 3.15 3.41 11.08 17.83 24.43 24.19 21.36 20.31 23.57 42.69 42.57 42.47
35.39 25.35 NA 17.51 26.66 40.22 39.61 17.55 15.25 11.67 141.21 141.21 141.21
13.98 8.34 5.06 58.70 50.42 58.45 67.67 40.64 36.24 27.64 80.51 80.20 79.66
21.58 26.17 16.27 6.71 6.55 19.16 -17.52 11.28 15.29 22.12 30.59 30.59 30.59
173.78 52.81 3.61 138.77 247.85 229.36 229.03 84.10 44.97 3.87 39.00 39.00 39.08
275.14 -11.03 1.10 139.01 170.62 182.10 NA 75.62 -5.14 -0.75 38.60 39.96 39.96
18.47 12.04 8.10 20.78 29.84 24.83 53.47 27.49 22.95 18.76 15.79 15.67 15.56
-0.71 1.71 1.16 -38.09 NA NA NA 0.00 0.00 0.00 1063.95 1063.95 1004.88
1.35 0.99 1.26 45.84 45.25 36.44 36.56 16.24 14.37 17.84 127.44 123.94 123.94
37.82 46.14 31.61 34.10 14.77 -6.00 -18.03 13.50 18.65 15.19 38.27 38.27 38.27
1.77 2.33 1.61 76.78 NA NA -24.06 7.01 11.05 6.96 31.75 20.07 14.43
-18.57 -7.83 -7.33 6.14 2.85 NA NA -34.19 -11.25 -10.39 125.35 125.35 125.35
-8.45 13.67 20.78 199.57 NA NA NA -8.95 14.88 28.13 221.92 221.92 221.92
12.09 8.39 5.63 17.33 63.37 64.50 44.11 13.45 12.30 13.21 34.70 34.70 34.70
-14.74 26.92 20.74 18.75 153.42 2347.16 NA -5.47 18.30 14.38 12.88 12.87 12.75
-4.34 -1.33 -2.76 4.85 224.72 NA NA -3.14 -0.94 -1.90 31.01 33.24 33.24
13.54 13.13 16.46 10.31 29.08 33.30 3.14 7.67 7.91 10.68 13.60 13.60 13.60
15.39 9.56 7.36 21.22 8.19 16.24 61.11 15.85 10.84 8.92 11.56 11.56 11.56
4.27 4.01 7.89 9.15 21.53 18.62 6.45 3.96 4.98 10.89 64.30 64.30 64.30
15.72 21.40 16.38 -23.13 -24.90 -57.02 -26.54 2.26 3.15 2.45 10.11 10.11 10.11
1.28 0.59 1.57 -15.17 12.70 -48.26 115.64 4.40 2.15 6.21 81.35 81.35 103.48
1.03 1.17 -9.89 38.91 NA 98.46 -11.96 39.34 0.00 0.00 34.36 28.58 25.05
3.98 4.11 5.31 22.62 59.79 58.13 -3.33 7.28 7.88 10.41 3.50 3.50 3.50
-3.46 -10.76 10.39 109.25 125.42 444.55 NA -0.66 -3.65 6.99 10.40 10.40 10.40
15.24 15.19 12.07 11.05 7.85 73.85 0.38 19.09 24.46 29.90 15.03 15.03 14.78
EPS () YoY Growth FY19 (%) RoNW (%) Equity ( in Cr.)
FY19 FY18 FY17 Sales Operating Profit PAT EPS FY19 FY18 FY17 FY19 FY18 FY17
martin jones
(Martin Jones)
#1