ADOR WELDING 2020-21 Annual Report Analysis

Wed, 31 Mar

ADOR WELDING 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.

ADOR WELDING Income Statement Analysis

• Operating income during the year fell 14.9% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 105.0% YoY during the fiscal. Operating profit margins witnessed a growth and stood at 0.5% in FY21 as against 8.0% in FY20.
• Depreciation charges increased by 3.9% and finance costs decreased by 18.7% YoY, respectively.
• Other income declined by 18.2% YoY.
• Net profit for the year declined by 139.7% YoY.
• Net profit margins during the year declined from 5.0% in FY20 to 2.3% in FY21.

ADOR WELDING Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	5,264	4,477	-14.9%
Other income	Rs m	90	74	-18.2%
Total Revenues	Rs m	5,354	4,551	-15.0%
Gross profit	Rs m	423	-21	-105.0%
Depreciation	Rs m	108	112	3.9%
Interest	Rs m	100	82	-18.7%
Profit before tax	Rs m	305	-141	-146.1%
Tax	Rs m	44	-37	-183.4%
Profit after tax	Rs m	261	-104	-139.7%
Gross profit margin	%	8.0	-0.5
Effective tax rate	%	14.4	26.2
Net profit margin	%	5.0	-2.3

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ADOR WELDING Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 1 billion as compared to Rs 2 billion in FY20, thereby witnessing an decrease of -26.5%.
• Current assets fell 21% and stood at Rs 2 billion, while fixed assets rose 3% and stood at Rs 2 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 4 billion as against Rs 5 billion during FY20, thereby witnessing a fall of 12%.

ADOR WELDING Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	2,474	2,375	-4.0
Current Liabilities	Rs m	1,804	1,327	-26.5
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	4,574	4,047	-11.5
Current assets	Rs m	2,713	2,130	-21.5
Fixed Assets	Rs m	1,861	1,917	3.0
Total Assets	Rs m	4,574	4,047	-11.5

ADOR WELDING Cash Flow Statement Analysis

• ADOR WELDING's cash flow from operating activities (CFO) during FY21 stood at Rs 790 million, an improvement of 478.5% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -66 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -606 million on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 119 million from the Rs -216 million net cash flows seen during FY20.

ADOR WELDING 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	137	790	478.5%
Cash Flow from Investing Activities	Rs m	-221	-66	-
Cash Flow from Financing Activities	Rs m	-132	-606	-
Net Cash Flow	Rs m	-216	119	-

Current Valuations for ADOR WELDING

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -7.6, an decline from the EPS of Rs 19.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 300.3, stands at -39.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.7 times, while the price to sales ratio stands at 0.9 times.
• The company's price to cash flow (P/CF) ratio stood at 451.1 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	387.0	329.2
TTM Earnings per share	Rs	19.2	-7.6
Diluted earnings per share	Rs	19.2	-7.6
Price to Cash Flow	x	6.7	451.1
TTM P/E ratio	x	8.6	-39.3
Price / Book Value ratio	x	1.5	1.5
Market Cap	Rs m	3,713	3,563
Dividends per share (Unadj.)	Rs	6.5	0.0

Ratio Analysis for ADOR WELDING

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.6x during FY21, from 1.5x 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 deteriorated and stood at -0.7x during FY21, from 4.0x 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 -4.4% during FY21, from 10.6% 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 -2.5% during FY21, from 16.4% 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 -0.5% during FY21, from 7.9% 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	1.5	1.6
Debtors’ Days	Days	900	860
Interest coverage	x	4.0	-0.7
Debt to equity ratio	x	0.0	0.0
Return on assets	%	7.9	-0.5
Return on equity	%	10.6	-4.4
Return on capital employed	%	16.4	-2.5

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

ADOR WELDING Share Price Performance

Over the last one year, ADOR WELDING share price has moved up from Rs 181.3 to Rs 300.3, registering a gain of Rs 119.0 or around 65.6%.

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 ADOR WELDING and quarterly results for ADOR WELDING)

Read: Latest Annual Report Analysis of ADOR WELDING