CARE RATING 2020-21 Annual Report Analysis

Wed, 31 Mar

CARE RATING 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.

CARE RATING Income Statement Analysis

• Operating income during the year rose 2.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 17.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 38.5% in FY21 as against 33.4% in FY20.
• Depreciation charges increased by 0.4% and finance costs decreased by 33.4% YoY, respectively.
• Other income declined by 0.6% YoY.
• Net profit for the year grew by 9.0% YoY.
• Net profit margins during the year grew from 34.3% in FY20 to 36.6% in FY21.

CARE RATING Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	2,436	2,484	2.0%
Other income	Rs m	315	313	-0.6%
Total Revenues	Rs m	2,751	2,797	1.7%
Gross profit	Rs m	813	958	17.8%
Depreciation	Rs m	78	78	0.4%
Interest	Rs m	9	6	-33.4%
Profit before tax	Rs m	1,041	1,186	14.0%
Tax	Rs m	206	277	34.3%
Profit after tax	Rs m	835	910	9.0%
Gross profit margin	%	33.4	38.5
Effective tax rate	%	19.8	23.3
Net profit margin	%	34.3	36.6

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CARE RATING Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 6 billion as compared to Rs 5 billion in FY20, thereby witnessing an increase of 3.1%.
• Current assets rose 35% and stood at Rs 11 billion, while fixed assets fell 61% and stood at Rs 1 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 12 billion as against Rs 11 billion during FY20, thereby witnessing a growth of 7%.

CARE RATING Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	5,097	5,641	10.7
Current Liabilities	Rs m	5,406	5,574	3.1
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	10,988	11,751	6.9
Current assets	Rs m	7,771	10,512	35.3
Fixed Assets	Rs m	3,218	1,239	-61.5
Total Assets	Rs m	10,988	11,751	6.9

CARE RATING Cash Flow Statement Analysis

• CARE RATING's cash flow from operating activities (CFO) during FY21 stood at Rs 862 million, an improvement of 27.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -380 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -434 million, an improvement of 59% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 48 million from the Rs -128 million net cash flows seen during FY20.

CARE RATING 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	674	862	27.8%
Cash Flow from Investing Activities	Rs m	267	-380	-
Cash Flow from Financing Activities	Rs m	-1,070	-434	-
Net Cash Flow	Rs m	-128	48	-

Current Valuations for CARE RATING

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 30.9, an improvement from the EPS of Rs 28.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 411.3, stands at 13.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.2 times, while the price to sales ratio stands at 4.9 times.
• The company's price to cash flow (P/CF) ratio stood at 13.2 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	82.7	84.3
TTM Earnings per share	Rs	28.3	30.9
Diluted earnings per share	Rs	28.2	30.7
Price to Cash Flow	x	10.7	13.2
TTM P/E ratio	x	11.7	13.4
Price / Book Value ratio	x	3.6	2.3
Market Cap	Rs m	18,494	13,023
Dividends per share (Unadj.)	Rs	19.5	17.0

Ratio Analysis for CARE RATING

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.9x during FY21, from 1.4x 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 193.0x during FY21, from 113.2x 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 16.1% during FY21, from 16.4% 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 improved and stood at 21.1% during FY21, from 20.6% 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 improved and stood at 7.8% during FY21, from 7.7% 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	1.4	1.9
Debtors’ Days	Days	613	314
Interest coverage	x	113.2	193.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	7.7	7.8
Return on equity	%	16.4	16.1
Return on capital employed	%	20.6	21.1

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

CARE RATING Share Price Performance

Over the last one year, CARE RATING share price has moved up from Rs 329.6 to Rs 411.3, registering a gain of Rs 81.7 or around 24.8%.

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

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

Read: Latest Annual Report Analysis of CARE RATING