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BHARAT FORGE 2019-20 Annual Report Analysis
Tue, 31 Mar

BHARAT FORGE 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.

BHARAT FORGE Income Statement Analysis

  • Operating income during the year fell 20.6% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 49.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 12.8% in FY20 as against 19.9% in FY19.
  • Depreciation charges increased by 5.9% and finance costs increased by 34.7% YoY, respectively.
  • Other income declined by 18.3% YoY.
  • Net profit for the year declined by 62.4% YoY.
  • Net profit margins during the year declined from 10.3% in FY19 to 4.9% in FY20.

BHARAT FORGE Income Statement 2019-20

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Net Sales Rs m 101,457 80,558 -20.6%
Other income Rs m 2,300 1,879 -18.3%
Total Revenues Rs m 103,757 82,437 -20.5%
Gross profit Rs m 20,207 10,314 -49.0%
Depreciation Rs m 5,132 5,433 5.9%
Interest Rs m 1,272 1,713 34.7%
Profit before tax Rs m 16,104 5,046 -68.7%
Tax Rs m 5,664 1,125 -80.1%
Profit after tax Rs m 10,440 3,921 -62.4%
Gross profit margin % 19.9 12.8
Effective tax rate % 35.2 22.3
Net profit margin % 10.3 4.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



New Research: 2 stocks to buy as Nifty50 heads towards 40,000

BHARAT FORGE Balance Sheet Analysis

  • The company's current liabilities during FY20 down at Rs 40 billion as compared to Rs 41 billion in FY19, thereby witnessing an decrease of -3.4%.
  • Long-term debt stood at Rs 19 billion as compared to Rs 17 billion during FY19, a growth of 11.7%.
  • Current assets fell 5% and stood at Rs 53 billion, while fixed assets rose 3% and stood at Rs 62 billion in FY20.
  • Overall, the total assets and liabilities for FY20 stood at Rs 115 billion as against Rs 116 billion during FY19, thereby witnessing a fall of 1%.

BHARAT FORGE Balance Sheet as on March 2020

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Networth Rs m 53,761 52,197 -2.9
 
Current Liabilities Rs m 41,088 39,674 -3.4
Long-term Debt Rs m 16,785 18,747 11.7
Total Liabilities Rs m 115,783 114,824 -0.8
 
Current assets Rs m 55,389 52,711 -4.8
Fixed Assets Rs m 60,394 62,114 2.8
Total Assets Rs m 115,783 114,824 -0.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



BHARAT FORGE Cash Flow Statement Analysis

  • BHARAT FORGE's cash flow from operating activities (CFO) during FY20 stood at Rs 15 billion, an improvement of 67.0% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY20 stood at Rs -11 billion 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 264 million from the Rs 832 million net cash flows seen during FY19.

BHARAT FORGE 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 9,115 15,220 67.0%
Cash Flow from Investing Activities Rs m -11,751 -11,322 -
Cash Flow from Financing Activities Rs m 3,676 -3,814 -
Net Cash Flow Rs m 832 264 -68.3%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for BHARAT FORGE

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 8.4, an decline from the EPS of Rs 22.4 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 234.1, stands at 27.8 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.1 times, while the price to sales ratio stands at 1.4 times.
  • The company's price to cash flow (P/CF) ratio stood at 19.0 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 217.9 173.0
TTM Earnings per share Rs 22.4 8.4
Diluted earnings per share Rs 22.4 8.4
Price to Cash Flow x 15.3 19.0
TTM P/E ratio x 36.1 27.8
Price / Book Value ratio x 5.4 3.4
Market Cap Rs m 287,710 177,715
Dividends per share (Unadj.) Rs 5.0 3.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for BHARAT FORGE

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 1.3x during FY20, from 1.3x 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 3.9x during FY20, from 13.7x 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 declined and down at 7.5% during FY20, from 19.4% 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 declined and down at 9.5% during FY20, from 24.6% 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 declined and down at 4.9% during FY20, from 10.1% 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 1.3 1.3
Debtors’ Days Days 77 68
Interest coverage x 13.7 3.9
Debt to equity ratio x 0.3 0.4
Return on assets % 10.1 4.9
Return on equity % 19.4 7.5
Return on capital employed % 24.6 9.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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

BHARAT FORGE Share Price Performance

Over the last one year, BHARAT FORGE share price has moved down from Rs 511.6 to Rs 234.1, registering a loss of Rs 277.5 or around 54.2%.

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

(To know more, check out historical annual results for BHARAT FORGE and quarterly results for BHARAT FORGE)

Annual Report FAQs

What is the current share price of BHARAT FORGE?

BHARAT FORGE currently trades at Rs 1,129.5 per share. You can check out the latest share price performance of BHARAT FORGE here...

What was the revenue of BHARAT FORGE in FY20? How does it compare to earlier years?

The revenues of BHARAT FORGE stood at Rs 82,437 m in FY20, which was down -20.5% compared to Rs 103,757 m reported in FY19.

BHARAT FORGE's revenue has grown from Rs 67,489 m in FY16 to Rs 82,437 m in FY20.

Over the past 5 years, the revenue of BHARAT FORGE has grown at a CAGR of 5.1%.

What was the net profit of BHARAT FORGE in FY20? How does it compare to earlier years?

The net profit of BHARAT FORGE stood at Rs 3,921 m in FY20, which was down -62.4% compared to Rs 10,440 m reported in FY19.

This compares to a net profit of Rs 7,543 m in FY18 and a net profit of Rs 6,976 m in FY17.

Over the past 5 years, BHARAT FORGE net profit has grown at a CAGR of -11.8%.

What does the cash flow statement of BHARAT FORGE reveal?

The cash flow statement is the financial statement that presents the cash inflows and outflows of a company during a given period of time.

This statement is one of the most useful tools for judging a company's liquidity position. The ratios and parameters in this statement helps test a company's financial health.

The cash flow statement of BHARAT FORGE reveals:

  • Cash flow from operations increased in FY20 and stood at Rs 15,220 m as compared to Rs 9,115 m in FY19.
  • Cash flow from investments increased in FY20 and stood at Rs -11,322 m as compared to Rs -11,751 m in FY19.
  • Cash flow from financial activity decreased in FY20 and stood at Rs -3,814 m as compared to Rs 3,676 m in FY19.

Here's the cash flow statement of BHARAT FORGE for the past 5 years.

(Rs m)FY16FY17FY18FY19FY20
From Operations13,55810,5179,6749,11515,220
From Investments-9,268-6,844-8,142-11,751-11,322
From Financial Activity-4,483-4,007-3,1443,676-3,814
Net Cashflow191-334-693832264

What does the Key Ratio analysis of BHARAT FORGE reveal?

Be it the company's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.

The ratio/financial analysis of BHARAT FORGE reveals:

  • Operating profit margins witnessed a fall and stood at 12.8% in FY20 as against 19.9% in FY19.
  • Net profit margins declined from 10.3% in FY19 to 4.9% in FY20.
  • Debt to Equity ratio for FY20 stood at 0.4 as compared to 0.3 in FY19.

Here's the ratio/financial analysis of BHARAT FORGE for the past 5 years.

 FY16FY17FY18FY19FY20
Operating Profit Margin (%)21.222.319.519.912.8
Net Profit Margin (%)9.811.39.110.34.9
Debt to Equity Ratio (x)0.50.30.20.30.4

Read: Latest Annual Report Analysis of BHARAT FORGE

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