ORIENTAL CARBON 2020-21 Annual Report Analysis

Wed, 31 Mar

ORIENTAL CARBON 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.

ORIENTAL CARBON Income Statement Analysis

• Operating income during the year fell 3.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 12.9% YoY during the fiscal. Operating profit margins witnessed a fall and down at 31.1% in FY21 as against 26.6% in FY20.
• Depreciation charges increased by 2.9% and finance costs decreased by 31.6% YoY, respectively.
• Other income grew by 19.5% YoY.
• Net profit for the year grew by 11.0% YoY.
• Net profit margins during the year grew from 19.3% in FY20 to 22.2% in FY21.

ORIENTAL CARBON Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	3,868	3,739	-3.3%
Other income	Rs m	106	126	19.5%
Total Revenues	Rs m	3,974	3,865	-2.7%
Gross profit	Rs m	1,030	1,164	12.9%
Depreciation	Rs m	214	221	2.9%
Interest	Rs m	96	65	-31.6%
Profit before tax	Rs m	826	1,004	21.5%
Tax	Rs m	78	174	122.2%
Profit after tax	Rs m	748	830	11.0%
Gross profit margin	%	26.6	31.1
Effective tax rate	%	9.5	17.3
Net profit margin	%	19.3	22.2

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ORIENTAL CARBON Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 1 billion as compared to Rs 954 million in FY20, thereby witnessing an increase of 29.2%.
• Long-term debt stood at Rs 1 billion as compared to Rs 963 million during FY20, a growth of 17.3%.
• Current assets rose 13% and stood at Rs 3 billion, while fixed assets rose 19% and stood at Rs 5 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 8 billion as against Rs 7 billion during FY20, thereby witnessing a growth of 17%.

ORIENTAL CARBON Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	4,646	5,332	14.8
Current Liabilities	Rs m	954	1,232	29.2
Long-term Debt	Rs m	963	1,129	17.3
Total Liabilities	Rs m	6,972	8,139	16.7
Current assets	Rs m	2,754	3,104	12.7
Fixed Assets	Rs m	4,218	5,035	19.4
Total Assets	Rs m	6,972	8,139	16.7

ORIENTAL CARBON Cash Flow Statement Analysis

• ORIENTAL CARBON's cash flow from operating activities (CFO) during FY21 stood at Rs 912 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -1 billion, an improvement of 50.8% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs 161 million, an improvement of 263% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -212 million from the Rs 196 million net cash flows seen during FY20.

ORIENTAL CARBON 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	1,146	912	-20.4%
Cash Flow from Investing Activities	Rs m	-852	-1,285	-
Cash Flow from Financing Activities	Rs m	-98	161	-
Net Cash Flow	Rs m	196	-212	-

Current Valuations for ORIENTAL CARBON

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 83.1, an improvement from the EPS of Rs 74.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 917.1, stands at 11.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.7 times, while the price to sales ratio stands at 2.5 times.
• The company's price to cash flow (P/CF) ratio stood at 7.5 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	387.2	374.2
TTM Earnings per share	Rs	74.8	83.1
Diluted earnings per share	Rs	74.8	83.1
Price to Cash Flow	x	5.8	7.5
TTM P/E ratio	x	7.5	11.0
Price / Book Value ratio	x	1.8	1.5
Market Cap	Rs m	8,342	7,882
Dividends per share (Unadj.)	Rs	10.0	14.0

Ratio Analysis for ORIENTAL CARBON

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.5x during FY21, from 2.9x 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 16.3x during FY21, from 9.6x 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 declined and down at 15.6% during FY21, from 16.1% 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 16.6% during FY21, from 16.4% 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 11.0% during FY21, from 12.1% 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	2.9	2.5
Debtors’ Days	Days	673	787
Interest coverage	x	9.6	16.3
Debt to equity ratio	x	0.2	0.2
Return on assets	%	12.1	11.0
Return on equity	%	16.1	15.6
Return on capital employed	%	16.4	16.6

To see how ORIENTAL CARBON has performed over the last 5 years, please visit here.

ORIENTAL CARBON Share Price Performance

Over the last one year, ORIENTAL CARBON share price has moved up from Rs 559.3 to Rs 917.1, registering a gain of Rs 357.8 or around 64.0%.

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

(To know more, check out historical annual results for ORIENTAL CARBON and quarterly results for ORIENTAL CARBON)

Read: Latest Annual Report Analysis of ORIENTAL CARBON