ACC 2019-20 Annual Report Analysis

Thu, 31 Dec

ACC 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.

ACC Income Statement Analysis

• Operating income during the year fell 12.0% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 9.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 15.8% in CY20 as against 15.4% in CY19.
• Depreciation charges increased by 5.3% and finance costs decreased by 33.8% YoY, respectively.
• Other income declined by 32.1% YoY.
• Net profit for the year grew by 4.2% YoY.
• Net profit margins during the year grew from 8.7% in CY19 to 10.3% in CY20.

ACC Income Statement 2019-20

No. of Mths Year Ending		12 Dec-19*	12 Dec-20*	% Change
Net Sales	Rs m	156,576	137,860	-12.0%
Other income	Rs m	3,208	2,178	-32.1%
Total Revenues	Rs m	159,783	140,037	-12.4%
Gross profit	Rs m	24,105	21,781	-9.6%
Depreciation	Rs m	6,064	6,388	5.3%
Interest	Rs m	863	571	-33.8%
Profit before tax	Rs m	20,385	16,999	-16.6%
Tax	Rs m	6,750	2,786	-58.7%
Profit after tax	Rs m	13,635	14,213	4.2%
Gross profit margin	%	15.4	15.8
Effective tax rate	%	33.1	16.4
Net profit margin	%	8.7	10.3

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ACC Balance Sheet Analysis

• The company's current liabilities during CY20 stood at Rs 48 billion as compared to Rs 47 billion in CY19, thereby witnessing an increase of 2.3%.
• Current assets rose 12% and stood at Rs 84 billion, while fixed assets rose 2% and stood at Rs 98 billion in CY20.
• Overall, the total assets and liabilities for CY20 stood at Rs 182 billion as against Rs 171 billion during CY19, thereby witnessing a growth of 6%.

ACC Balance Sheet as on December 2020

No. of Mths Year Ending		12 Dec-19*	12 Dec-20*	% Change
Networth	Rs m	115,438	126,991	10.0
Current Liabilities	Rs m	46,982	48,043	2.3
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	171,360	182,002	6.2
Current assets	Rs m	75,346	84,486	12.1
Fixed Assets	Rs m	96,014	97,516	1.6
Total Assets	Rs m	171,360	182,002	6.2

ACC Cash Flow Statement Analysis

• ACC 's cash flow from operating activities (CFO) during CY20 stood at Rs 22 billion on a YoY basis.
• Cash flow from investing activities (CFI) during CY20 stood at Rs -5 billion, an improvement of 66.4% on a YoY basis.
• Cash flow from financial activities (CFF) during CY20 stood at Rs -3 billion, an improvement of 13% on a YoY basis.
• Overall, net cash flows for the company during CY20 stood at Rs 14 billion from the Rs 16 billion net cash flows seen during CY19.

ACC 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	22,547	22,192	-1.6%
Cash Flow from Investing Activities	Rs m	-3,217	-5,352	-
Cash Flow from Financing Activities	Rs m	-3,742	-3,274	-
Net Cash Flow	Rs m	15,593	13,568	-13.0%

Current Valuations for ACC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 75.7, an improvement from the EPS of Rs 72.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,618.4, stands at 21.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.4 times, while the price to sales ratio stands at 2.2 times.
• The company's price to cash flow (P/CF) ratio stood at 12.2 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	833.8	734.1
TTM Earnings per share	Rs	72.6	75.7
Diluted earnings per share	Rs	72.6	75.7
Price to Cash Flow	x	13.8	12.2
TTM P/E ratio	x	19.9	21.4
Price / Book Value ratio	x	2.5	2.0
Market Cap	Rs m	290,451	251,968
Dividends per share (Unadj.)	Rs	14.0	14.0

Ratio Analysis for ACC

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.8x 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 improved and stood at 30.8x during CY20, from 24.6x 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 11.2% during CY20, from 11.8% 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 13.8% during CY20, from 18.4% 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 8.1% during CY20, from 8.5% 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	1.8
Debtors’ Days	Days	1	1
Interest coverage	x	24.6	30.8
Debt to equity ratio	x	0.0	0.0
Return on assets	%	8.5	8.1
Return on equity	%	11.8	11.2
Return on capital employed	%	18.4	13.8

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

ACC Share Price Performance

Over the last one year, ACC share price has moved down from Rs 1,661.0 to Rs 967.5, registering a loss of Rs 693.5 or around 41.8%.

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

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

Read: Latest Annual Report Analysis of ACC