BLUE STAR 2020-21 Annual Report Analysis

Wed, 31 Mar

BLUE STAR 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.

BLUE STAR Income Statement Analysis

• Operating income during the year fell 20.5% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 22.9% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 5.0% in FY21 as against 5.2% in FY20.
• Depreciation charges increased by 4.9% and finance costs increased by 119.6% YoY, respectively.
• Other income grew by 95.3% YoY.
• Net profit for the year declined by 30.3% YoY.
• Net profit margins during the year declined from 2.6% in FY20 to 2.3% in FY21.

BLUE STAR Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	53,602	42,636	-20.5%
Other income	Rs m	447	874	95.3%
Total Revenues	Rs m	54,049	43,509	-19.5%
Gross profit	Rs m	2,787	2,148	-22.9%
Depreciation	Rs m	880	923	4.9%
Interest	Rs m	295	647	119.6%
Profit before tax	Rs m	2,060	1,452	-29.5%
Tax	Rs m	653	471	-27.9%
Profit after tax	Rs m	1,407	981	-30.3%
Gross profit margin	%	5.2	5.0
Effective tax rate	%	31.7	32.4
Net profit margin	%	2.6	2.3

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BLUE STAR Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 23 billion as compared to Rs 25 billion in FY20, thereby witnessing an decrease of -11.2%.
• Long-term debt stood at Rs 3 billion as compared to Rs 477 million during FY20, a growth of 632.0%.
• Current assets rose 8% and stood at Rs 29 billion, while fixed assets fell 9% and stood at Rs 6 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 35 billion as against Rs 34 billion during FY20, thereby witnessing a growth of 4%.

BLUE STAR Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	7,824	8,852	13.1
Current Liabilities	Rs m	25,457	22,614	-11.2
Long-term Debt	Rs m	477	3,493	632.0
Total Liabilities	Rs m	33,575	35,020	4.3
Current assets	Rs m	26,512	28,596	7.9
Fixed Assets	Rs m	7,063	6,424	-9.0
Total Assets	Rs m	33,575	35,020	4.3

BLUE STAR Cash Flow Statement Analysis

• BLUE STAR's cash flow from operating activities (CFO) during FY21 stood at Rs 3 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -2 billion, an improvement of 196.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -696 million, an improvement of 58% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 418 million from the Rs 2 billion net cash flows seen during FY20.

BLUE STAR 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	4,499	3,498	-22.3%
Cash Flow from Investing Activities	Rs m	-808	-2,396	-
Cash Flow from Financing Activities	Rs m	-1,669	-696	-
Net Cash Flow	Rs m	2,023	418	-79.3%

Current Valuations for BLUE STAR

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 10.2, an decline from the EPS of Rs 14.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 937.5, stands at 92.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 10.2 times, while the price to sales ratio stands at 2.1 times.
• The company's price to cash flow (P/CF) ratio stood at 35.6 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	556.6	442.7
TTM Earnings per share	Rs	14.6	10.2
Diluted earnings per share	Rs	14.6	10.2
Price to Cash Flow	x	19.4	35.6
TTM P/E ratio	x	31.5	92.1
Price / Book Value ratio	x	8.1	7.7
Market Cap	Rs m	63,182	67,815
Dividends per share (Unadj.)	Rs	10.0	4.0

Ratio Analysis for BLUE STAR

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.3x during FY21, from 1.0x 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 3.2x during FY21, from 8.0x 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 11.1% during FY21, from 18.0% 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 17.0% during FY21, from 28.4% 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 4.6% during FY21, from 5.1% 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	1.0	1.3
Debtors’ Days	Days	6	7
Interest coverage	x	8.0	3.2
Debt to equity ratio	x	0.1	0.4
Return on assets	%	5.1	4.6
Return on equity	%	18.0	11.1
Return on capital employed	%	28.4	17.0

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

BLUE STAR Share Price Performance

Over the last one year, BLUE STAR share price has moved up from Rs 460.7 to Rs 937.5, registering a gain of Rs 476.8 or around 103.5%.

Meanwhile, the S&P BSE CONSUMER DURABLES Index is trading at Rs 32,825.9 (up 0.8%). Over the last one year it has moved up from 19,363.0 to 32,825.9, a gain of 13,463 points (up 69.5%).

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

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

Read: Latest Annual Report Analysis of BLUE STAR