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BHEL 2019-20 Annual Report Analysis
Tue, 31 Mar

BHEL 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.

BHEL Income Statement Analysis

  • Operating income during the year fell 28.2% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 2901.6% YoY during the fiscal. Operating profit margins witnessed a growth and stood at 19.4% in FY20 as against 0.5% in FY19.
  • Depreciation charges increased by 5.8% and finance costs increased by 62.0% YoY, respectively.
  • Other income grew by 35.1% YoY.
  • Net profit for the year declined by 225.8% YoY.
  • Net profit margins during the year declined from 4.6% in FY19 to 8.0% in FY20.

BHEL Income Statement 2019-20

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Net Sales Rs m 259,496 186,259 -28.2%
Other income Rs m 30,000 40,523 35.1%
Total Revenues Rs m 289,496 226,782 -21.7%
Gross profit Rs m -1,206 -36,212 2,901.6%
Depreciation Rs m 4,757 5,033 5.8%
Interest Rs m 3,783 6,127 62.0%
Profit before tax Rs m 20,253 -6,848 -133.8%
Tax Rs m 8,373 8,093 -3.3%
Profit after tax Rs m 11,880 -14,941 -225.8%
Gross profit margin % -0.5 -19.4
Effective tax rate % 41.3 -118.2
Net profit margin % 4.6 -8.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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BHEL Balance Sheet Analysis

  • The company's current liabilities during FY20 down at Rs 249 billion as compared to Rs 259 billion in FY19, thereby witnessing an decrease of -4.0%.
  • Current assets fell 15% and stood at Rs 350 billion, while fixed assets rose 10% and stood at Rs 243 billion in FY20.
  • Overall, the total assets and liabilities for FY20 stood at Rs 593 billion as against Rs 633 billion during FY19, thereby witnessing a fall of 6%.

BHEL Balance Sheet as on March 2020

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Networth Rs m 309,043 286,607 -7.3
 
Current Liabilities Rs m 259,434 249,076 -4.0
Long-term Debt Rs m 955 0 -100.0
Total Liabilities Rs m 633,170 592,818 -6.4
 
Current assets Rs m 412,691 350,103 -15.2
Fixed Assets Rs m 220,480 242,715 10.1
Total Assets Rs m 633,170 592,818 -6.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



BHEL Cash Flow Statement Analysis

  • BHEL's cash flow from operating activities (CFO) during FY20 stood at Rs -29 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY20 stood at Rs 19 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY20 stood at Rs 16 billion, an improvement of 5,228% on a YoY basis.
  • Overall, net cash flows for the company during FY20 stood at Rs 6 billion from the Rs -20 billion net cash flows seen during FY19.

BHEL 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 -38,602 -28,915 -
Cash Flow from Investing Activities Rs m 19,188 18,771 -2.2%
Cash Flow from Financing Activities Rs m -316 16,220 -
Net Cash Flow Rs m -19,729 6,076 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for BHEL

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs -4.3, an decline from the EPS of Rs 3.4 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 20.8, stands at -4.8 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 0.3 times, while the price to sales ratio stands at 0.4 times.
  • The company's price to cash flow (P/CF) ratio stood at -17.2 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 74.5 53.5
TTM Earnings per share Rs 3.4 -4.3
Diluted earnings per share Rs 3.4 -4.3
Price to Cash Flow x 15.7 -17.2
TTM P/E ratio x 18.2 -4.8
Price / Book Value ratio x 0.8 0.6
Market Cap Rs m 256,628 170,621
Dividends per share (Unadj.) Rs 2.0 0.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for BHEL

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 1.4x during FY20, from 1.6x 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 -0.1x during FY20, from 6.4x 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 -5.2% during FY20, from 3.8% 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 -0.3% during FY20, from 7.8% 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 declined and down at -1.5% during FY20, from 2.5% 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 1.6 1.4
Debtors’ Days Days 17 14
Interest coverage x 6.4 -0.1
Debt to equity ratio x 0.0 0.0
Return on assets % 2.5 -1.5
Return on equity % 3.8 -5.2
Return on capital employed % 7.8 -0.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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

BHEL Share Price Performance

Over the last one year, BHEL share price has moved down from Rs 74.9 to Rs 20.8, registering a loss of Rs 54.1 or around 72.2%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 10,979.5 (up 1.3%). Over the last one year it has moved down from 18,472.0 to 10,979.5, a loss of 7,493 points (down 40.6%).

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

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

Annual Report FAQs

What is the current share price of BHEL?

BHEL currently trades at Rs 222.8 per share. You can check out the latest share price performance of BHEL here...

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

The revenues of BHEL stood at Rs 226,782 m in FY20, which was down -21.7% compared to Rs 289,496 m reported in FY19.

BHEL's revenue has fallen from Rs 278,283 m in FY16 to Rs 226,782 m in FY20.

Over the past 5 years, the revenue of BHEL has grown at a CAGR of -5.0%.

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

The net loss of BHEL stood at Rs -14,941 m in FY20, which was down -225.8% compared to Rs 11,880 m reported in FY19.

This compares to a net profit of Rs 8,290 m in FY18 and a net profit of Rs 4,787 m in FY17.

Over the past 5 years, BHEL net profit has grown at a CAGR of 21.3%.

What does the cash flow statement of BHEL 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 BHEL reveals:

  • Cash flow from operations increased in FY20 and stood at Rs -28,915 m as compared to Rs -38,602 m in FY19.
  • Cash flow from investments decreased in FY20 and stood at Rs 18,771 m as compared to Rs 19,188 m in FY19.
  • Cash flow from financial activity increased in FY20 and stood at Rs 16,220 m as compared to Rs -316 m in FY19.

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

(Rs m)FY16FY17FY18FY19FY20
From Operations3,7445,6049,891-38,602-28,915
From Investments231-5,6529,61219,18818,771
From Financial Activity-1,225-4,679-6,674-31616,220
Net Cashflow2,750-4,72612,829-19,7296,076

What does the Key Ratio analysis of BHEL 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 BHEL reveals:

  • Operating profit margins witnessed a growth and stood at 19.4% in FY20 as against 0.5% in FY19.
  • Net profit margins declined from 4.6% in FY19 to 8.0% in FY20.
  • Debt to Equity ratio for FY20 stood at 0.0 as compared to 0.0 in FY19.

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

 FY16FY17FY18FY19FY20
Operating Profit Margin (%)-13.6-10.1-3.0-0.5-19.4
Net Profit Margin (%)-2.81.83.34.6-8.0
Debt to Equity Ratio (x)0.00.00.00.00.0

Read: Latest Annual Report Analysis of BHEL

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