AMARA RAJA BATTERIES 2019-20 Annual Report Analysis

Tue, 31 Mar

AMARA RAJA BATTERIES has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

AMARA RAJA BATTERIES Income Statement Analysis

• Operating income during the year rose 0.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 15.5% YoY during the fiscal. Operating profit margins witnessed a fall and down at 16.1% in FY20 as against 14.0% in FY19.
• Depreciation charges increased by 15.1% and finance costs increased by 75.4% YoY, respectively.
• Other income grew by 15.9% YoY.
• Net profit for the year grew by 36.7% YoY.
• Net profit margins during the year grew from 7.1% in FY19 to 9.7% in FY20.

AMARA RAJA BATTERIES Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	67,931	68,392	0.7%
Other income	Rs m	477	553	15.9%
Total Revenues	Rs m	68,408	68,945	0.8%
Gross profit	Rs m	9,505	10,983	15.5%
Depreciation	Rs m	2,612	3,007	15.1%
Interest	Rs m	70	122	75.4%
Profit before tax	Rs m	7,301	8,407	15.1%
Tax	Rs m	2,469	1,799	-27.1%
Profit after tax	Rs m	4,832	6,608	36.7%
Gross profit margin	%	14.0	16.1
Effective tax rate	%	33.8	21.4
Net profit margin	%	7.1	9.7

Revealing on April 30: Are You Ready for the Upcoming Election Surprise?

AMARA RAJA BATTERIES Balance Sheet Analysis

• The company's current liabilities during FY20 stood at Rs 11 billion as compared to Rs 9 billion in FY19, thereby witnessing an increase of 22.1%.
• Long-term debt down at Rs 343 million as compared to Rs 468 million during FY19, a fall of 26.6%.
• Current assets rose 1% and stood at Rs 22 billion, while fixed assets rose 21% and stood at Rs 28 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 50 billion as against Rs 45 billion during FY19, thereby witnessing a growth of 11%.

AMARA RAJA BATTERIES Balance Sheet as on March 2020

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Networth	Rs m	33,350	36,553	9.6
Current Liabilities	Rs m	9,025	11,021	22.1
Long-term Debt	Rs m	468	343	-26.6
Total Liabilities	Rs m	44,957	50,004	11.2
Current assets	Rs m	22,041	22,233	0.9
Fixed Assets	Rs m	22,916	27,772	21.2
Total Assets	Rs m	44,957	50,004	11.2

AMARA RAJA BATTERIES Cash Flow Statement Analysis

• AMARA RAJA BATTERIES's cash flow from operating activities (CFO) during FY20 stood at Rs 12 billion, an improvement of 117.4% on a YoY basis.
• Cash flow from investing activities (CFI) during FY20 stood at Rs -8 billion, an improvement of 83.5% on a YoY basis.
• Cash flow from financial activities (CFF) during FY20 stood at Rs -4 billion on a YoY basis.
• Overall, net cash flows for the company during FY20 stood at Rs -176 million from the Rs 15 million net cash flows seen during FY19.

AMARA RAJA BATTERIES Cash Flow Statement 2019-20

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-19	Mar-20
Cash Flow from Operating Activities	Rs m	5,411	11,766	117.4%
Cash Flow from Investing Activities	Rs m	-4,629	-8,494	-
Cash Flow from Financing Activities	Rs m	-916	-3,638	-
Net Cash Flow	Rs m	15	-176	-

Current Valuations for AMARA RAJA BATTERIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 38.7, an improvement from the EPS of Rs 28.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 478.1, stands at 12.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.2 times, while the price to sales ratio stands at 1.2 times.
• The company's price to cash flow (P/CF) ratio stood at 10.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Sales per share (Unadj.)	Rs	397.7	400.4
TTM Earnings per share	Rs	28.3	38.7
Diluted earnings per share	Rs	28.3	38.7
Price to Cash Flow	x	16.5	10.5
TTM P/E ratio	x	25.4	12.4
Price / Book Value ratio	x	4.1	2.8
Market Cap	Rs m	135,369	101,044
Dividends per share (Unadj.)	Rs	7.1	11.0

Ratio Analysis for AMARA RAJA BATTERIES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.0x during FY20, from 2.4x during FY19. 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 70.0x during FY20, from 106.1x during FY19. 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 18.1% during FY20, from 14.5% during FY20. 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 23.1% during FY20, from 21.8% during FY19. 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 13.5% during FY20, from 10.9% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Current ratio	x	2.4	2.0
Debtors’ Days	Days	4	3
Interest coverage	x	106.1	70.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	10.9	13.5
Return on equity	%	14.5	18.1
Return on capital employed	%	21.8	23.1

To see how AMARA RAJA BATTERIES has performed over the last 5 years, please visit here.

AMARA RAJA BATTERIES Share Price Performance

Over the last one year, AMARA RAJA BATTERIES share price has moved down from Rs 719.0 to Rs 478.1, registering a loss of Rs 240.9 or around 33.5%.

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

(To know more, check out historical annual results for AMARA RAJA BATTERIES and quarterly results for AMARA RAJA BATTERIES)

Read: Latest Annual Report Analysis of AMARA RAJA ENERGY & MOBILITY