ABB INDIA 2019-20 Annual Report Analysis

Thu, 31 Dec

ABB INDIA has announced its results for the year ended December 2020. Let us have a look at the detailed performance review of the company during FY19-20.

ABB INDIA Income Statement Analysis

• Operating income during the year fell 29.1% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 29.9% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 5.6% in CY20 as against 5.6% in CY19.
• Depreciation charges increased by 15.7% and finance costs decreased by 31.5% YoY, respectively.
• Other income grew by 1.5% YoY.
• Net profit for the year declined by 24.0% YoY.
• Net profit margins during the year grew from 3.7% in CY19 to 4.0% in CY20.

ABB INDIA Income Statement 2019-20

No. of Mths Year Ending		12 Dec-19*	12 Dec-20*	% Change
Net Sales	Rs m	82,099	58,210	-29.1%
Other income	Rs m	1,232	1,250	1.5%
Total Revenues	Rs m	83,331	59,459	-28.6%
Gross profit	Rs m	4,624	3,244	-29.9%
Depreciation	Rs m	1,040	1,204	15.7%
Interest	Rs m	360	246	-31.5%
Profit before tax	Rs m	4,457	3,044	-31.7%
Tax	Rs m	1,423	739	-48.0%
Profit after tax	Rs m	3,034	2,304	-24.0%
Gross profit margin	%	5.6	5.6
Effective tax rate	%	31.9	24.3
Net profit margin	%	3.7	4.0

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ABB INDIA Balance Sheet Analysis

• The company's current liabilities during CY20 down at Rs 39 billion as compared to Rs 41 billion in CY19, thereby witnessing an decrease of -4.6%.
• Current assets fell 5% and stood at Rs 61 billion, while fixed assets rose 17% and stood at Rs 14 billion in CY20.
• Overall, the total assets and liabilities for CY20 stood at Rs 75 billion as against Rs 76 billion during CY19, thereby witnessing a fall of 2%.

ABB INDIA Balance Sheet as on December 2020

No. of Mths Year Ending		12 Dec-19*	12 Dec-20*	% Change
Networth	Rs m	35,200	36,063	2.5
Current Liabilities	Rs m	41,251	39,339	-4.6
Long-term Debt	Rs m	71	0	-100.0
Total Liabilities	Rs m	75,905	74,733	-1.5
Current assets	Rs m	63,982	60,836	-4.9
Fixed Assets	Rs m	11,923	13,897	16.6
Total Assets	Rs m	75,905	74,733	-1.5

ABB INDIA Cash Flow Statement Analysis

• ABB INDIA's cash flow from operating activities (CFO) during CY20 stood at Rs 3 billion on a YoY basis.
• Cash flow from investing activities (CFI) during CY20 stood at Rs 4 billion on a YoY basis.
• Cash flow from financial activities (CFF) during CY20 stood at Rs -2 billion on a YoY basis.
• Overall, net cash flows for the company during CY20 stood at Rs 6 billion from the Rs 1 billion net cash flows seen during CY19.

ABB INDIA Cash Flow Statement 2019-20

Particulars	No. of months	12	12	% Change
	Year Ending	Dec-19	Dec-20
Cash Flow from Operating Activities	Rs m	6,669	3,182	-52.3%
Cash Flow from Investing Activities	Rs m	-3,907	4,424	-
Cash Flow from Financing Activities	Rs m	-1,467	-1,523	-
Net Cash Flow	Rs m	1,225	6,090	397.1%

Current Valuations for ABB INDIA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 10.9, an decline from the EPS of Rs 14.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,212.2, stands at 111.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 7.1 times, while the price to sales ratio stands at 4.4 times.
• The company's price to cash flow (P/CF) ratio stood at 64.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Dec-19*	12 Dec-20*
Sales per share (Unadj.)	Rs	387.4	274.7
TTM Earnings per share	Rs	14.3	10.9
Diluted earnings per share	Rs	14.3	10.9
Price to Cash Flow	x	66.8	64.5
TTM P/E ratio	x	98.1	111.5
Price / Book Value ratio	x	8.7	6.3
Market Cap	Rs m	305,037	226,133
Dividends per share (Unadj.)	Rs	4.8	5.0

Ratio Analysis for ABB INDIA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.5x during CY20, from 1.6x during CY19. 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 deteriorated and stood at 13.4x during CY20, from 13.4x during CY19. 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 6.4% during CY20, from 8.6% during CY20. 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 9.1% during CY20, from 13.7% during CY19. 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 declined and down at 3.4% during CY20, from 4.5% during CY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Dec-19*	12 Dec-20*
Current ratio	x	1.6	1.5
Debtors’ Days	Days	9	11
Interest coverage	x	13.4	13.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	4.5	3.4
Return on equity	%	8.6	6.4
Return on capital employed	%	13.7	9.1

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

ABB INDIA Share Price Performance

Over the last one year, ABB INDIA share price has moved down from Rs 1,319.9 to Rs 932.7, registering a loss of Rs 387.2 or around 29.3%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 10,979.5 (up 1.3%). Over the last one year it has moved down from 18,472.0 to 10,979.5, a loss of 7,493 points (down 40.6%).

Overall, the S&P BSE SENSEX is down 24.2% over the year.

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

Read: Latest Annual Report Analysis of ABB INDIA