BIRLA CORPORATION 2020-21 Annual Report Analysis

Wed, 31 Mar

BIRLA CORPORATION 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.

BIRLA CORPORATION Income Statement Analysis

• Operating income during the year fell 1.9% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 4.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 18.9% in FY21 as against 19.3% in FY20.
• Depreciation charges increased by 5.4% and finance costs decreased by 23.6% YoY, respectively.
• Other income grew by 17.4% YoY.
• Net profit for the year grew by 24.7% YoY.
• Net profit margins during the year grew from 7.3% in FY20 to 9.3% in FY21.

BIRLA CORPORATION Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	69,157	67,855	-1.9%
Other income	Rs m	851	999	17.4%
Total Revenues	Rs m	70,008	68,854	-1.6%
Gross profit	Rs m	13,360	12,797	-4.2%
Depreciation	Rs m	3,519	3,708	5.4%
Interest	Rs m	3,877	2,963	-23.6%
Profit before tax	Rs m	6,815	7,126	4.6%
Tax	Rs m	1,763	825	-53.2%
Profit after tax	Rs m	5,052	6,301	24.7%
Gross profit margin	%	19.3	18.9
Effective tax rate	%	25.9	11.6
Net profit margin	%	7.3	9.3

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BIRLA CORPORATION Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 20 billion as compared to Rs 21 billion in FY20, thereby witnessing an decrease of -3.6%.
• Long-term debt down at Rs 36 billion as compared to Rs 37 billion during FY20, a fall of 1.8%.
• Current assets fell 1% and stood at Rs 27 billion, while fixed assets rose 8% and stood at Rs 102 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 129 billion as against Rs 122 billion during FY20, thereby witnessing a growth of 6%.

BIRLA CORPORATION Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	48,061	54,860	14.1
Current Liabilities	Rs m	21,001	20,248	-3.6
Long-term Debt	Rs m	36,690	36,044	-1.8
Total Liabilities	Rs m	121,755	128,956	5.9
Current assets	Rs m	26,939	26,681	-1.0
Fixed Assets	Rs m	94,815	102,275	7.9
Total Assets	Rs m	121,755	128,956	5.9

BIRLA CORPORATION Cash Flow Statement Analysis

• BIRLA CORPORATION's cash flow from operating activities (CFO) during FY21 stood at Rs 13 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -6 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -7 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 451 million from the Rs -439 million net cash flows seen during FY20.

BIRLA CORPORATION 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	13,412	13,284	-1.0%
Cash Flow from Investing Activities	Rs m	-11,840	-5,815	-
Cash Flow from Financing Activities	Rs m	-2,012	-7,019	-
Net Cash Flow	Rs m	-439	451	-

Current Valuations for BIRLA CORPORATION

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 81.8, an improvement from the EPS of Rs 65.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 950.5, stands at 11.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.3 times, while the price to sales ratio stands at 1.1 times.
• The company's price to cash flow (P/CF) ratio stood at 5.1 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	898.0	881.1
TTM Earnings per share	Rs	65.6	81.8
Diluted earnings per share	Rs	65.6	81.8
Price to Cash Flow	x	3.7	5.1
TTM P/E ratio	x	6.4	11.6
Price / Book Value ratio	x	1.0	0.9
Market Cap	Rs m	46,170	51,266
Dividends per share (Unadj.)	Rs	7.5	10.0

Ratio Analysis for BIRLA CORPORATION

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.3x during FY21, from 1.3x 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 3.4x during FY21, from 2.8x 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 11.5% during FY21, from 10.5% 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 11.1% during FY21, from 12.6% 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 7.2% during FY21, from 7.3% 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	1.3	1.3
Debtors’ Days	Days	1	2
Interest coverage	x	2.8	3.4
Debt to equity ratio	x	0.8	0.7
Return on assets	%	7.3	7.2
Return on equity	%	10.5	11.5
Return on capital employed	%	12.6	11.1

To see how BIRLA CORPORATION has performed over the last 5 years, please visit here.

BIRLA CORPORATION Share Price Performance

Over the last one year, BIRLA CORPORATION share price has moved up from Rs 417.0 to Rs 950.5, registering a gain of Rs 533.5 or around 127.9%.

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

(To know more, check out historical annual results for BIRLA CORPORATION and quarterly results for BIRLA CORPORATION)

Read: Latest Annual Report Analysis of BIRLA CORPORATION