BEML 2020-21 Annual Report Analysis

Wed, 31 Mar

BEML 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.

BEML Income Statement Analysis

• Operating income during the year rose 17.6% on a year-on-year (YoY) basis.
• The company's operating profit increased by 96.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 3.3% in FY21 as against 2.0% in FY20.
• Depreciation charges decreased by 1.4% and finance costs increased by 1.7% YoY, respectively.
• Other income grew by 13.0% YoY.
• Net profit for the year grew by 7.9% YoY.
• Net profit margins during the year declined from 2.1% in FY20 to 1.9% in FY21.

BEML Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	30,254	35,566	17.6%
Other income	Rs m	793	896	13.0%
Total Revenues	Rs m	31,047	36,463	17.4%
Gross profit	Rs m	596	1,169	96.0%
Depreciation	Rs m	724	714	-1.4%
Interest	Rs m	472	480	1.7%
Profit before tax	Rs m	194	871	349.9%
Tax	Rs m	-443	184	-141.5%
Profit after tax	Rs m	637	687	7.9%
Gross profit margin	%	2.0	3.3
Effective tax rate	%	-228.9	21.1
Net profit margin	%	2.1	1.9

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BEML Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 21 billion as compared to Rs 14 billion in FY20, thereby witnessing an increase of 47.6%.
• Long-term debt down at Rs 1,000 million as compared to Rs 2 billion during FY20, a fall of 50.4%.
• Current assets rose 17% and stood at Rs 49 billion, while fixed assets fell 2% and stood at Rs 7 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 56 billion as against Rs 49 billion during FY20, thereby witnessing a growth of 15%.

BEML Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	22,528	22,144	-1.7
Current Liabilities	Rs m	14,365	21,206	47.6
Long-term Debt	Rs m	2,015	1,000	-50.4
Total Liabilities	Rs m	48,611	55,677	14.5
Current assets	Rs m	41,604	48,835	17.4
Fixed Assets	Rs m	7,007	6,842	-2.4
Total Assets	Rs m	48,611	55,677	14.5

BEML Cash Flow Statement Analysis

• BEML's cash flow from operating activities (CFO) during FY21 stood at Rs -3 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -490 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -2 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -5 billion from the Rs 575 million net cash flows seen during FY20.

BEML 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	1,058	-3,010	-
Cash Flow from Investing Activities	Rs m	-513	-490	-
Cash Flow from Financing Activities	Rs m	29	-1,762	-
Net Cash Flow	Rs m	575	-5,262	-

Current Valuations for BEML

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 16.5, an improvement from the EPS of Rs 15.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,255.4, stands at 73.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.4 times, while the price to sales ratio stands at 1.5 times.
• The company's price to cash flow (P/CF) ratio stood at 29.4 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	726.6	854.1
TTM Earnings per share	Rs	15.3	16.5
Diluted earnings per share	Rs	15.3	16.5
Price to Cash Flow	x	13.9	29.4
TTM P/E ratio	x	28.9	73.8
Price / Book Value ratio	x	1.4	1.9
Market Cap	Rs m	30,771	41,212
Dividends per share (Unadj.)	Rs	6.0	6.0

Ratio Analysis for BEML

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.3x during FY21, from 2.9x 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 2.8x during FY21, from 1.4x 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 3.1% during FY21, from 2.8% 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 improved and stood at 5.8% during FY21, from 2.7% 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 2.1% during FY21, from 2.3% 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	2.9	2.3
Debtors’ Days	Days	1,819	1,934
Interest coverage	x	1.4	2.8
Debt to equity ratio	x	0.1	0.0
Return on assets	%	2.3	2.1
Return on equity	%	2.8	3.1
Return on capital employed	%	2.7	5.8

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

BEML Share Price Performance

Over the last one year, BEML share price has moved up from Rs 453.0 to Rs 1,255.4, registering a gain of Rs 802.4 or around 177.1%.

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 BEML and quarterly results for BEML)

Read: Latest Annual Report Analysis of BEML