BHARAT FORGE 2020-21 Annual Report Analysis

Wed, 31 Mar

BHARAT FORGE 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.

BHARAT FORGE Income Statement Analysis

• Operating income during the year fell 21.3% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 47.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 8.6% in FY21 as against 12.8% in FY20.
• Depreciation charges increased by 11.1% and finance costs decreased by 37.1% YoY, respectively.
• Other income declined by 10.1% YoY.
• Net profit for the year declined by 124.7% YoY.
• Net profit margins during the year declined from 4.9% in FY20 to 1.5% in FY21.

BHARAT FORGE Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	80,558	63,363	-21.3%
Other income	Rs m	1,879	1,689	-10.1%
Total Revenues	Rs m	82,437	65,052	-21.1%
Gross profit	Rs m	10,314	5,471	-47.0%
Depreciation	Rs m	5,433	6,037	11.1%
Interest	Rs m	1,713	1,077	-37.1%
Profit before tax	Rs m	5,046	45	-99.1%
Tax	Rs m	1,125	1,015	-9.7%
Profit after tax	Rs m	3,921	-970	-124.7%
Gross profit margin	%	12.8	8.6
Effective tax rate	%	22.3	2,245.8
Net profit margin	%	4.9	-1.5

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BHARAT FORGE Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 45 billion as compared to Rs 40 billion in FY20, thereby witnessing an increase of 13.9%.
• Long-term debt stood at Rs 22 billion as compared to Rs 19 billion during FY20, a growth of 18.3%.
• Current assets rose 18% and stood at Rs 62 billion, while fixed assets rose 11% and stood at Rs 69 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 131 billion as against Rs 115 billion during FY20, thereby witnessing a growth of 14%.

BHARAT FORGE Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	52,197	54,151	3.7
Current Liabilities	Rs m	39,674	45,177	13.9
Long-term Debt	Rs m	18,747	22,172	18.3
Total Liabilities	Rs m	114,824	130,878	14.0
Current assets	Rs m	52,711	62,144	17.9
Fixed Assets	Rs m	62,114	68,733	10.7
Total Assets	Rs m	114,824	130,878	14.0

BHARAT FORGE Cash Flow Statement Analysis

• BHARAT FORGE's cash flow from operating activities (CFO) during FY21 stood at Rs 10 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -15 billion, an improvement of 33.5% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs 6 billion, an improvement of 252% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 1 billion from the Rs 264 million net cash flows seen during FY20.

BHARAT FORGE 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	15,220	10,200	-33.0%
Cash Flow from Investing Activities	Rs m	-11,322	-15,111	-
Cash Flow from Financing Activities	Rs m	-3,814	5,783	-
Net Cash Flow	Rs m	264	1,347	410.0%

Current Valuations for BHARAT FORGE

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -2.1, an decline from the EPS of Rs 8.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 596.2, stands at -286.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.1 times, while the price to sales ratio stands at 4.4 times.
• The company's price to cash flow (P/CF) ratio stood at 40.6 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	173.0	136.1
TTM Earnings per share	Rs	8.4	-2.1
Diluted earnings per share	Rs	8.4	-2.1
Price to Cash Flow	x	11.7	40.6
TTM P/E ratio	x	27.8	-286.1
Price / Book Value ratio	x	3.4	3.8
Market Cap	Rs m	177,715	205,779
Dividends per share (Unadj.)	Rs	3.5	2.0

Ratio Analysis for BHARAT FORGE

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x 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 deteriorated and stood at 1.0x during FY21, from 3.9x 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 -1.8% during FY21, from 7.5% 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 1.5% during FY21, from 9.5% 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 0.1% during FY21, from 4.9% 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	1.3	1.4
Debtors’ Days	Days	68	81
Interest coverage	x	3.9	1.0
Debt to equity ratio	x	0.4	0.4
Return on assets	%	4.9	0.1
Return on equity	%	7.5	-1.8
Return on capital employed	%	9.5	1.5

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 up from Rs 234.1 to Rs 596.2, registering a gain of Rs 362.1 or around 154.7%.

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

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

Read: Latest Annual Report Analysis of BHARAT FORGE