ACTION CONST. 2020-21 Annual Report Analysis

Wed, 31 Mar

ACTION CONST. has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

ACTION CONST. Income Statement Analysis

• Operating income during the year rose 6.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 30.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 9.7% in FY21 as against 7.9% in FY20.
• Depreciation charges increased by 7.2% and finance costs decreased by 16.6% YoY, respectively.
• Other income grew by 268.9% YoY.
• Net profit for the year grew by 52.1% YoY.
• Net profit margins during the year grew from 4.5% in FY20 to 6.5% in FY21.

ACTION CONST. Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	11,562	12,272	6.1%
Other income	Rs m	41	153	268.9%
Total Revenues	Rs m	11,604	12,425	7.1%
Gross profit	Rs m	916	1,190	30.0%
Depreciation	Rs m	130	139	7.2%
Interest	Rs m	147	122	-16.6%
Profit before tax	Rs m	680	1,081	58.9%
Tax	Rs m	156	283	82.0%
Profit after tax	Rs m	525	798	52.1%
Gross profit margin	%	7.9	9.7
Effective tax rate	%	22.9	26.2
Net profit margin	%	4.5	6.5

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ACTION CONST. Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 5 billion as compared to Rs 5 billion in FY20, thereby witnessing an increase of 6.5%.
• Long-term debt down at Rs 203 million as compared to Rs 295 million during FY20, a fall of 31.2%.
• Current assets rose 21% and stood at Rs 6 billion, while fixed assets fell 1% and stood at Rs 5 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 11 billion as against Rs 10 billion during FY20, thereby witnessing a growth of 11%.

ACTION CONST. Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	4,426	5,233	18.2
Current Liabilities	Rs m	4,635	4,936	6.5
Long-term Debt	Rs m	295	203	-31.2
Total Liabilities	Rs m	9,536	10,553	10.7
Current assets	Rs m	4,861	5,905	21.5
Fixed Assets	Rs m	4,675	4,647	-0.6
Total Assets	Rs m	9,536	10,553	10.7

ACTION CONST. Cash Flow Statement Analysis

• ACTION CONST.'s cash flow from operating activities (CFO) during FY21 stood at Rs 861 million, an improvement of 79.5% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -162 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -404 million on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 295 million from the Rs -51 million net cash flows seen during FY20.

ACTION CONST. Cash Flow Statement 2020-21

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-20	Mar-21
Cash Flow from Operating Activities	Rs m	480	861	79.5%
Cash Flow from Investing Activities	Rs m	-196	-162	-
Cash Flow from Financing Activities	Rs m	-334	-404	-
Net Cash Flow	Rs m	-51	295	-

Current Valuations for ACTION CONST.

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 7.0, an improvement from the EPS of Rs 4.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 154.5, stands at 23.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.5 times, while the price to sales ratio stands at 1.4 times.
• The company's price to cash flow (P/CF) ratio stood at 12.6 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Sales per share (Unadj.)	Rs	101.9	108.1
TTM Earnings per share	Rs	4.6	7.0
Diluted earnings per share	Rs	4.4	6.7
Price to Cash Flow	x	6.3	12.6
TTM P/E ratio	x	7.9	23.1
Price / Book Value ratio	x	2.0	2.2
Market Cap	Rs m	8,991	11,771
Dividends per share (Unadj.)	Rs	0.5	0.5

Ratio Analysis for ACTION CONST.

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.2x during FY21, from 1.0x during FY20. 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 9.8x during FY21, from 5.6x during FY20. 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 improved and stood at 15.2% during FY21, from 11.9% during FY21. 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 improved and stood at 22.1% during FY21, from 17.5% during FY20. 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 improved and stood at 8.7% during FY21, from 7.0% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Current ratio	x	1.0	1.2
Debtors’ Days	Days	465	668
Interest coverage	x	5.6	9.8
Debt to equity ratio	x	0.1	0.0
Return on assets	%	7.0	8.7
Return on equity	%	11.9	15.2
Return on capital employed	%	17.5	22.1

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

ACTION CONST. Share Price Performance

Over the last one year, ACTION CONST. share price has moved up from Rs 34.7 to Rs 154.5, registering a gain of Rs 119.9 or around 345.9%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 21,095.8 (down 0.4%). Over the last one year it has moved up from 10,979.5 to 21,095.8, a gain of 10,116 points (up 92.1%).

Overall, the S&P BSE SENSEX is up 74.1% over the year.

(To know more, check out historical annual results for ACTION CONST. and quarterly results for ACTION CONST.)

Read: Latest Annual Report Analysis of ACTION CONST.