FORCE MOTORS 2020-21 Annual Report Analysis

Wed, 31 Mar

FORCE MOTORS 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.

FORCE MOTORS Income Statement Analysis

• Operating income during the year fell 35.5% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 94.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 0.7% in FY21 as against 7.5% in FY20.
• Depreciation charges decreased by 10.7% and finance costs increased by 1.3% YoY, respectively.
• Other income declined by 41.8% YoY.
• Net profit for the year declined by 290.8% YoY.
• Net profit margins during the year declined from 1.9% in FY20 to 5.6% in FY21.

FORCE MOTORS Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	30,805	19,882	-35.5%
Other income	Rs m	428	249	-41.8%
Total Revenues	Rs m	31,233	20,131	-35.5%
Gross profit	Rs m	2,298	131	-94.3%
Depreciation	Rs m	1,945	1,737	-10.7%
Interest	Rs m	279	282	1.3%
Profit before tax	Rs m	502	-1,639	-426.4%
Tax	Rs m	-83	-523	533.3%
Profit after tax	Rs m	585	-1,116	-290.8%
Gross profit margin	%	7.5	0.7
Effective tax rate	%	-16.4	31.9
Net profit margin	%	1.9	-5.6

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FORCE MOTORS Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 9 billion as compared to Rs 9 billion in FY20, thereby witnessing an decrease of -4.1%.
• Long-term debt stood at Rs 5 billion as compared to Rs 2 billion during FY20, a growth of 163.3%.
• Current assets fell 14% and stood at Rs 9 billion, while fixed assets rose 11% and stood at Rs 23 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 32 billion as against Rs 31 billion during FY20, thereby witnessing a growth of 3%.

FORCE MOTORS Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	19,653	18,378	-6.5
Current Liabilities	Rs m	9,111	8,736	-4.1
Long-term Debt	Rs m	1,875	4,938	163.3
Total Liabilities	Rs m	30,909	31,799	2.9
Current assets	Rs m	10,271	8,818	-14.1
Fixed Assets	Rs m	20,638	22,981	11.4
Total Assets	Rs m	30,909	31,799	2.9

FORCE MOTORS Cash Flow Statement Analysis

• FORCE MOTORS's cash flow from operating activities (CFO) during FY21 stood at Rs 73 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -3 billion, an improvement of 1.6% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs 3 billion, an improvement of 1,587% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -318 million from the Rs 621 million net cash flows seen during FY20.

FORCE MOTORS 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	4,092	73	-98.2%
Cash Flow from Investing Activities	Rs m	-3,274	-3,326	-
Cash Flow from Financing Activities	Rs m	-197	2,935	-
Net Cash Flow	Rs m	621	-318	-

Current Valuations for FORCE MOTORS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -84.7, an decline from the EPS of Rs 44.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,169.6, stands at -10.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.8 times, while the price to sales ratio stands at 0.8 times.
• The company's price to cash flow (P/CF) ratio stood at 23.9 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	2,337.3	1,508.5
TTM Earnings per share	Rs	44.4	-84.7
Diluted earnings per share	Rs	44.4	-84.7
Price to Cash Flow	x	3.8	23.9
TTM P/E ratio	x	35.5	-10.8
Price / Book Value ratio	x	0.8	0.8
Market Cap	Rs m	16,134	14,854
Dividends per share (Unadj.)	Rs	10.0	5.0

Ratio Analysis for FORCE MOTORS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.0x during FY21, from 1.1x 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 -4.8x 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 declined and down at -6.1% during FY21, from 3.0% 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 -5.8% during FY21, from 3.6% 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 -2.6% during FY21, from 2.8% 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	1.1	1.0
Debtors’ Days	Days	200	231
Interest coverage	x	2.8	-4.8
Debt to equity ratio	x	0.1	0.3
Return on assets	%	2.8	-2.6
Return on equity	%	3.0	-6.1
Return on capital employed	%	3.6	-5.8

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

FORCE MOTORS Share Price Performance

Over the last one year, FORCE MOTORS share price has moved up from Rs 735.5 to Rs 1,169.6, registering a gain of Rs 434.1 or around 59.0%.

Meanwhile, the S&P BSE AUTO Index is trading at Rs 22,252.2 (down 0.0%). Over the last one year it has moved up from 10,746.2 to 22,252.2, a gain of 11,506 points (up 107.1%).

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

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

Read: Latest Annual Report Analysis of FORCE MOTORS