Choksi Imaging Ltd. :530427-IN: Earnings Analysis: Q3, 2017 By the Numbers : March 22, 2017

Choksi Imaging Ltd. reports financial results for the quarter ended December 31, 2016.


  • Summary numbers: Revenues of INR 71.51 million, Net Earnings of INR 1.91 million.
  • Gross margins narrowed from 17.94% to 15.11% compared to the same period last year, operating (EBITDA) margins now 3.64% from 6.39%.
  • Narrowing of operating margins contributed to decline in earnings.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2016-12-31 2016-09-30 2016-06-30 2016-03-31 2015-12-31
Relevant Numbers (Quarterly)
Revenues (mil) 71.51 72.85 70.46 81.45 83.45
Revenue Growth (%YOY) -14.31 -42.48 -56.93 -69.67 -66.75
Earnings (mil) 1.91 3.37 3.08 -0.7 6.41
Earnings Growth (%YOY) -70.2 -43.68 -70.94 -107.36 174.67
Net Margin (%) 2.67 4.63 4.36 -0.85 7.68
EPS 0.49 0.86 0.79 -0.18 1.64
Return on Equity (%) 5.25 9.27 8.85 -2 18.5
Return on Assets (%) 2.41 4.26 3.38 -0.76 6.57

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Market Share Versus Profits

Revenues History
Earnings History

Compared to the same period last year, 530427-IN‘s change in revenue was close to the amount of its change in earnings. It remains to be seen how the rest of its peer group’s results will turn out and if 530427-IN‘s performance is a sign of any major shift in the composition of market share in this sector. Also, for comparison purposes, revenues changed by -1.83% and earnings by -43.34% compared to the previous period.

Earnings Growth Analysis

The company’s year-on-year decline in earnings was influenced by a weakening in gross margins from 17.94% to 15.11%, as well as issues with cost controls. As a result, operating margins (EBITDA margins) went from 6.39% to 3.64% in this time frame. For comparison, gross margins were 16.13% and EBITDA margins were 3.70% in the previous period.

Gross Margin Trend

Companies sometimes sacrifice improvements in revenues and margins in order to extend friendlier terms to customers and vendors. Capital Cube probes for such activity by comparing the changes in gross margins with any changes in working capital. If the gross margins improved without a worsening of working capital, it is possible that the company’s performance is a result of truly delivering in the marketplace and not simply an accounting prop-up using the balance sheet.

Gross Margin History
Working Capital Days History

530427-IN‘s decline in gross margins has not produced any significant offsetting improvement in its working capital . This leads Capital Cube to conclude that the decline in gross margins are likely from operating issues and not trade-offs with the balance sheet. Working capital days are currently 57.95 days, compared to last year’s level of 33.11 days.


The company’s decline in earnings has been influenced by the following factors: (1) Decline in operating margins (EBIT margins) from 5.17% to 2.33% and (2) one-time items that contributed to a decrease in pretax margins from 7.14% to 2.55%

EBIT Margin History
PreTax Margin History

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Company Profile

Choksi Imaging Ltd. engages in the manufacture and trade of photosensitized materials and other products for healthcare industry. It offers x-ray films and coronary stents; and non destructive testing equipment, including protec, colenta and carestream for analog and digital solutions for the industry. The company was founded on October 1, 1992 and is headquartered in Mumbai, India.

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