ADANI ENTERPRISES 2020-21 Annual Report Analysis

Wed, 31 Mar

ADANI ENTERPRISES 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.

ADANI ENTERPRISES Income Statement Analysis

• Operating income during the year fell 8.9% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 9.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 5.7% in FY21 as against 5.7% in FY20.
• Depreciation charges increased by 13.8% and finance costs decreased by 12.4% YoY, respectively.
• Other income grew by 10.3% YoY.
• Net profit for the year declined by 6.5% YoY.
• Net profit margins during the year grew from 1.8% in FY20 to 1.9% in FY21.

ADANI ENTERPRISES Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	434,026	395,371	-8.9%
Other income	Rs m	6,837	7,538	10.3%
Total Revenues	Rs m	440,862	402,909	-8.6%
Gross profit	Rs m	24,831	22,462	-9.5%
Depreciation	Rs m	4,721	5,371	13.8%
Interest	Rs m	15,723	13,769	-12.4%
Profit before tax	Rs m	11,223	10,860	-3.2%
Tax	Rs m	3,243	3,397	4.7%
Profit after tax	Rs m	7,980	7,463	-6.5%
Gross profit margin	%	5.7	5.7
Effective tax rate	%	28.9	31.3
Net profit margin	%	1.8	1.9

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ADANI ENTERPRISES Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 215 billion as compared to Rs 233 billion in FY20, thereby witnessing an decrease of -7.8%.
• Long-term debt stood at Rs 95 billion as compared to Rs 35 billion during FY20, a growth of 170.9%.
• Current assets fell 17% and stood at Rs 200 billion, while fixed assets rose 41% and stood at Rs 316 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 516 billion as against Rs 466 billion during FY20, thereby witnessing a growth of 11%.

ADANI ENTERPRISES Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	169,466	171,586	1.3
Current Liabilities	Rs m	232,889	214,831	-7.8
Long-term Debt	Rs m	35,158	95,233	170.9
Total Liabilities	Rs m	466,256	515,663	10.6
Current assets	Rs m	241,829	199,633	-17.4
Fixed Assets	Rs m	224,427	316,030	40.8
Total Assets	Rs m	466,256	515,663	10.6

ADANI ENTERPRISES Cash Flow Statement Analysis

• ADANI ENTERPRISES's cash flow from operating activities (CFO) during FY21 stood at Rs 41 billion, an improvement of 66.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -79 billion, an improvement of 240.2% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs 31 billion, an improvement of 1,485% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -15 billion from the Rs 12 billion net cash flows seen during FY20.

ADANI ENTERPRISES 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	24,536	40,935	66.8%
Cash Flow from Investing Activities	Rs m	-23,230	-79,024	-
Cash Flow from Financing Activities	Rs m	-2,209	30,586	-
Net Cash Flow	Rs m	11,508	-14,585	-

Current Valuations for ADANI ENTERPRISES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 6.8, an decline from the EPS of Rs 7.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,030.9, stands at 157.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.8 times, while the price to sales ratio stands at 2.9 times.
• The company's price to cash flow (P/CF) ratio stood at 52.3 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	394.6	359.5
TTM Earnings per share	Rs	7.3	6.8
Diluted earnings per share	Rs	7.0	6.5
Price to Cash Flow	x	12.3	52.3
TTM P/E ratio	x	19.7	157.5
Price / Book Value ratio	x	1.2	3.9
Market Cap	Rs m	205,719	671,104
Dividends per share (Unadj.)	Rs	1.0	1.0

Ratio Analysis for ADANI ENTERPRISES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.9x 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 1.8x during FY21, from 1.7x 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 declined and down at 4.3% during FY21, from 4.7% 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 declined and down at 9.2% during FY21, from 13.2% 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 declined and down at 4.1% during FY21, from 5.1% 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	0.9
Debtors’ Days	Days	11	11
Interest coverage	x	1.7	1.8
Debt to equity ratio	x	0.2	0.6
Return on assets	%	5.1	4.1
Return on equity	%	4.7	4.3
Return on capital employed	%	13.2	9.2

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

ADANI ENTERPRISES Share Price Performance

Over the last one year, ADANI ENTERPRISES share price has moved up from Rs 137.6 to Rs 1,030.9, registering a gain of Rs 893.3 or around 649.4%.

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

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

Read: Latest Annual Report Analysis of ADANI ENTERPRISES