3M INDIA 2020-21 Annual Report Analysis

Wed, 31 Mar

3M INDIA 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.

3M INDIA Income Statement Analysis

• Operating income during the year fell 12.8% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 42.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 10.0% in FY21 as against 15.1% in FY20.
• Depreciation charges increased by 4.2% and finance costs decreased by 33.0% YoY, respectively.
• Other income declined by 46.1% YoY.
• Net profit for the year declined by 49.6% YoY.
• Net profit margins during the year declined from 10.8% in FY20 to 6.2% in FY21.

3M INDIA Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	29,866	26,048	-12.8%
Other income	Rs m	459	247	-46.1%
Total Revenues	Rs m	30,324	26,296	-13.3%
Gross profit	Rs m	4,497	2,595	-42.3%
Depreciation	Rs m	593	618	4.2%
Interest	Rs m	37	25	-33.0%
Profit before tax	Rs m	4,326	2,199	-49.2%
Tax	Rs m	1,104	575	-47.9%
Profit after tax	Rs m	3,222	1,624	-49.6%
Gross profit margin	%	15.1	10.0
Effective tax rate	%	25.5	26.2
Net profit margin	%	10.8	6.2

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3M INDIA Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 7 billion as compared to Rs 6 billion in FY20, thereby witnessing an increase of 20.5%.
• Current assets rose 14% and stood at Rs 21 billion, while fixed assets rose 1% and stood at Rs 5 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 26 billion as against Rs 23 billion during FY20, thereby witnessing a growth of 12%.

3M INDIA Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	17,509	19,103	9.1
Current Liabilities	Rs m	5,713	6,886	20.5
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	23,490	26,207	11.6
Current assets	Rs m	18,687	21,377	14.4
Fixed Assets	Rs m	4,803	4,830	0.6
Total Assets	Rs m	23,490	26,207	11.6

3M INDIA Cash Flow Statement Analysis

• 3M INDIA's cash flow from operating activities (CFO) during FY21 stood at Rs 3 billion, an improvement of 31.0% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -142 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -250 million on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 3 billion from the Rs 2 billion net cash flows seen during FY20.

3M INDIA 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	2,450	3,211	31.0%
Cash Flow from Investing Activities	Rs m	27	-142	-
Cash Flow from Financing Activities	Rs m	-246	-250	-
Net Cash Flow	Rs m	2,231	2,819	26.3%

Current Valuations for 3M INDIA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 144.1, an decline from the EPS of Rs 285.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 30,238.6, stands at 209.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 17.8 times, while the price to sales ratio stands at 13.1 times.
• The company's price to cash flow (P/CF) ratio stood at 119.4 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	2,650.0	2,311.3
TTM Earnings per share	Rs	285.9	144.1
Diluted earnings per share	Rs	286.0	144.1
Price to Cash Flow	x	55.9	119.4
TTM P/E ratio	x	66.1	209.8
Price / Book Value ratio	x	13.2	14.0
Market Cap	Rs m	231,198	267,659
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for 3M INDIA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 3.1x during FY21, from 3.3x 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 90.6x during FY21, from 119.1x 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 8.5% during FY21, from 18.4% 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 11.6% during FY21, from 24.9% 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 6.3% during FY21, from 13.9% 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	3.3	3.1
Debtors’ Days	Days	653	685
Interest coverage	x	119.1	90.6
Debt to equity ratio	x	0.0	0.0
Return on assets	%	13.9	6.3
Return on equity	%	18.4	8.5
Return on capital employed	%	24.9	11.6

To see how 3M INDIA has performed over the last 5 years, please visit here.

3M INDIA Share Price Performance

Over the last one year, 3M INDIA share price has moved up from Rs 18,914.9 to Rs 30,238.6, registering a gain of Rs 11,323.7 or around 59.9%.

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

(To know more, check out historical annual results for 3M INDIA and quarterly results for 3M INDIA)

Read: Latest Annual Report Analysis of 3M INDIA