BALKRISHNA INDUSTRIES 2020-21 Annual Report Analysis

Wed, 31 Mar

BALKRISHNA INDUSTRIES 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.

BALKRISHNA INDUSTRIES Income Statement Analysis

• Operating income during the year rose 20.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 56.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 31.3% in FY21 as against 24.0% in FY20.
• Depreciation charges increased by 11.4% and finance costs increased by 9.0% YoY, respectively.
• Other income declined by 53.2% YoY.
• Net profit for the year grew by 22.7% YoY.
• Net profit margins during the year grew from 19.9% in FY20 to 20.4% in FY21.

BALKRISHNA INDUSTRIES Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	48,112	57,832	20.2%
Other income	Rs m	3,680	1,722	-53.2%
Total Revenues	Rs m	51,792	59,554	15.0%
Gross profit	Rs m	11,559	18,108	56.7%
Depreciation	Rs m	3,736	4,163	11.4%
Interest	Rs m	108	118	9.0%
Profit before tax	Rs m	11,395	15,549	36.5%
Tax	Rs m	1,799	3,774	109.8%
Profit after tax	Rs m	9,597	11,775	22.7%
Gross profit margin	%	24.0	31.3
Effective tax rate	%	15.8	24.3
Net profit margin	%	19.9	20.4

Emerging Opportunity: Bluechip Bull Run

BALKRISHNA INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 19 billion as compared to Rs 16 billion in FY20, thereby witnessing an increase of 22.1%.
• Long-term debt down at Rs 15 million as compared to Rs 18 million during FY20, a fall of 17.3%.
• Current assets rose 29% and stood at Rs 25 billion, while fixed assets rose 16% and stood at Rs 57 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 82 billion as against Rs 68 billion during FY20, thereby witnessing a growth of 20%.

BALKRISHNA INDUSTRIES Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	50,083	59,998	19.8
Current Liabilities	Rs m	15,579	19,015	22.1
Long-term Debt	Rs m	18	15	-17.3
Total Liabilities	Rs m	68,064	81,665	20.0
Current assets	Rs m	19,215	24,820	29.2
Fixed Assets	Rs m	48,849	56,845	16.4
Total Assets	Rs m	68,064	81,665	20.0

BALKRISHNA INDUSTRIES Cash Flow Statement Analysis

• BALKRISHNA INDUSTRIES's cash flow from operating activities (CFO) during FY21 stood at Rs 13 billion, an improvement of 14.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -12 billion, an improvement of 73.1% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -2 billion, an improvement of 68% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 81 million from the Rs 7 million net cash flows seen during FY20.

BALKRISHNA INDUSTRIES 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	11,731	13,390	14.1%
Cash Flow from Investing Activities	Rs m	-6,778	-11,734	-
Cash Flow from Financing Activities	Rs m	-4,947	-1,581	-
Net Cash Flow	Rs m	7	81	1,146.2%

Current Valuations for BALKRISHNA INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 60.9, an improvement from the EPS of Rs 49.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,690.5, stands at 27.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.4 times, while the price to sales ratio stands at 5.7 times.
• The company's price to cash flow (P/CF) ratio stood at 15.9 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	248.9	299.2
TTM Earnings per share	Rs	49.6	60.9
Diluted earnings per share	Rs	49.6	60.9
Price to Cash Flow	x	11.5	15.9
TTM P/E ratio	x	15.9	27.8
Price / Book Value ratio	x	3.8	4.2
Market Cap	Rs m	190,959	253,637
Dividends per share (Unadj.)	Rs	20.0	17.0

Ratio Analysis for BALKRISHNA INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.3x during FY21, from 1.2x 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 133.2x during FY21, from 106.6x 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 19.6% during FY21, from 19.2% 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 26.1% during FY21, from 23.0% 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 improved and stood at 14.6% during FY21, from 14.3% 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	1.2	1.3
Debtors’ Days	Days	447	476
Interest coverage	x	106.6	133.2
Debt to equity ratio	x	0.0	0.0
Return on assets	%	14.3	14.6
Return on equity	%	19.2	19.6
Return on capital employed	%	23.0	26.1

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

BALKRISHNA INDUSTRIES Share Price Performance

Over the last one year, BALKRISHNA INDUSTRIES share price has moved up from Rs 791.1 to Rs 1,690.5, registering a gain of Rs 899.4 or around 113.7%.

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

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

Read: Latest Annual Report Analysis of BALKRISHNA INDUSTRIES