ACTION CONST. 2021-22 Annual Report Analysis

Fri, 2 Sep

ACTION CONST. has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

ACTION CONST. Income Statement Analysis

• Operating income during the year rose 32.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 27.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 9.3% in FY22 as against 9.7% in FY21.
• Depreciation charges increased by 10.5% and finance costs increased by 12.4% YoY, respectively.
• Other income declined by 1.9% YoY.
• Net profit for the year grew by 31.6% YoY.
• Net profit margins during the year declined from 6.5% in FY21 to 6.4% in FY22.

ACTION CONST. Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	12,272	16,296	32.8%
Other income	Rs m	153	150	-1.9%
Total Revenues	Rs m	12,425	16,446	32.4%
Gross profit	Rs m	1,190	1,514	27.3%
Depreciation	Rs m	139	154	10.5%
Interest	Rs m	122	138	12.4%
Profit before tax	Rs m	1,081	1,373	27.0%
Tax	Rs m	283	323	14.1%
Profit after tax	Rs m	798	1,050	31.6%
Gross profit margin	%	9.7	9.3
Effective tax rate	%	26.2	23.5
Net profit margin	%	6.5	6.4

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ACTION CONST. Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 5 billion as compared to Rs 5 billion in FY21, thereby witnessing an increase of 3.5%.
• Current assets rose 21% and stood at Rs 7 billion, while fixed assets rose 22% and stood at Rs 6 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 13 billion as against Rs 11 billion during FY21, thereby witnessing a growth of 22%.

ACTION CONST. Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	5,233	7,541	44.1
Current Liabilities	Rs m	4,936	5,110	3.5
Long-term Debt	Rs m	201	0	-100.0
Total Liabilities	Rs m	10,553	12,824	21.5
Current assets	Rs m	5,905	7,145	21.0
Fixed Assets	Rs m	4,647	5,679	22.2
Total Assets	Rs m	10,553	12,824	21.5

ACTION CONST. Cash Flow Statement Analysis

• ACTION CONST.'s cash flow from operating activities (CFO) during FY22 stood at Rs 1 billion, an improvement of 26.6% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -2 billion, an improvement of 1,141.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs 654 million, an improvement of 262% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -272 million from the Rs 295 million net cash flows seen during FY21.

ACTION CONST. Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	861	1,090	26.6%
Cash Flow from Investing Activities	Rs m	-162	-2,015	-
Cash Flow from Financing Activities	Rs m	-403	654	-
Net Cash Flow	Rs m	295	-272	-

Current Valuations for ACTION CONST.

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 8.8, an improvement from the EPS of Rs 7.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 289.0, stands at 26.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.6 times, while the price to sales ratio stands at 2.1 times.
• The company's price to cash flow (P/CF) ratio stood at 21.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	108.1	136.8
TTM Earnings per share	Rs	7.0	8.8
Diluted earnings per share	Rs	6.7	8.8
Price to Cash Flow	x	19.6	21.3
TTM P/E ratio	x	23.1	26.3
Price / Book Value ratio	x	2.2	3.4
Market Cap	Rs m	11,771	25,674
Dividends per share (Unadj.)	Rs	0.5	0.6

Ratio Analysis for ACTION CONST.

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x during FY22, from 1.2x during FY21. 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 11.0x during FY22, from 9.8x during FY21. 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 13.9% during FY22, from 15.2% during FY22. 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 20.0% during FY22, from 22.1% during FY21. 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 9.3% during FY22, from 8.7% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	1.2	1.4
Debtors’ Days	Days	668	423
Interest coverage	x	9.8	11.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	8.7	9.3
Return on equity	%	15.2	13.9
Return on capital employed	%	22.1	20.0

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 246.7 to Rs 289.0, registering a gain of Rs 42.4 or around 17.2%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 32,836.4 (up 1.2%). Over the last one year it has moved up from 25,376.4 to 32,836.4, a gain of 7,460 points (up 29.4%).

Overall, the S&P BSE SENSEX is up 3.3% 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.