CUMMINS INDIA 2019-20 Annual Report Analysis

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CUMMINS INDIA 2019-20 Annual Report Analysis
Wed, 4 Nov

CUMMINS INDIA has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

CUMMINS INDIA Income Statement Analysis

  • Operating income during the year fell 8.9% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 34.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 11.0% in FY20 as against 15.3% in FY19.
  • Depreciation charges increased by 8.5% and finance costs increased by 25.3% YoY, respectively.
  • Other income grew by 9.5% YoY.
  • Net profit for the year declined by 5.0% YoY.
  • Net profit margins during the year grew from 12.5% in FY19 to 12.9% in FY20.

CUMMINS INDIA Income Statement 2019-20

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Net Sales Rs m 56,973 51,915 -8.9%
Other income Rs m 2,351 2,575 9.5%
Total Revenues Rs m 59,324 54,489 -8.1%
Gross profit Rs m 8,691 5,693 -34.5%
Depreciation Rs m 1,111 1,206 8.5%
Interest Rs m 168 210 25.3%
Profit before tax Rs m 9,763 6,852 -29.8%
Tax Rs m 3,263 1,019 -68.8%
Profit after tax Rs m 7,426 7,056 -5.0%
Gross profit margin % 15.3 11.0
Effective tax rate % 33.4 14.9
Net profit margin % 12.5 12.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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CUMMINS INDIA Balance Sheet Analysis

  • The company's current liabilities during FY20 stood at Rs 16 billion as compared to Rs 15 billion in FY19, thereby witnessing an increase of 2.2%.
  • Current assets fell 1% and stood at Rs 34 billion, while fixed assets rose 9% and stood at Rs 26 billion in FY20.
  • Overall, the total assets and liabilities for FY20 stood at Rs 62 billion as against Rs 61 billion during FY19, thereby witnessing a growth of 2%.

CUMMINS INDIA Balance Sheet as on March 2020

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Networth Rs m 42,830 44,020 2.8
 
Current Liabilities Rs m 15,341 15,676 2.2
Long-term Debt Rs m 0 0 0.0
Total Liabilities Rs m 60,603 61,961 2.2
 
Current assets Rs m 34,286 33,825 -1.3
Fixed Assets Rs m 23,939 26,007 8.6
Total Assets Rs m 60,603 61,961 2.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



CUMMINS INDIA Cash Flow Statement Analysis

  • CUMMINS INDIA's cash flow from operating activities (CFO) during FY20 stood at Rs 6 billion, an improvement of 8.6% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY20 stood at Rs -2 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY20 stood at Rs -4 billion, an improvement of 21% on a YoY basis.
  • Overall, net cash flows for the company during FY20 stood at Rs -140 million from the Rs 431 million net cash flows seen during FY19.

CUMMINS INDIA Cash Flow Statement 2019-20

Particulars No. of months 12 12 % Change
Year Ending Mar-19 Mar-20
Cash Flow from Operating Activities Rs m 5,532 6,007 8.6%
Cash Flow from Investing Activities Rs m 162 -2,139 -
Cash Flow from Financing Activities Rs m -5,251 -4,123 -
Net Cash Flow Rs m 431 -140 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for CUMMINS INDIA

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 25.5, an decline from the EPS of Rs 26.8 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 441.0, stands at 24.3 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 3.5 times, while the price to sales ratio stands at 3.0 times.
  • The company's price to cash flow (P/CF) ratio stood at 17.4 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Sales per share (Unadj.) Rs 205.5 187.3
TTM Earnings per share Rs 26.8 25.5
Diluted earnings per share Rs 26.8 25.5
Price to Cash Flow x 16.1 17.4
TTM P/E ratio x 24.3 24.3
Price / Book Value ratio x 4.8 3.5
Market Cap Rs m 122,245 122,245
Dividends per share (Unadj.) Rs 17.0 14.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for CUMMINS INDIA

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 2.2x during FY20, from 2.2x during FY19. 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 33.6x during FY20, from 59.2x during FY19. 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 16.0% during FY20, from 17.3% during FY20. 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 18.8% during FY20, from 25.3% during FY19. 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 11.7% during FY20, from 12.5% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Current ratio x 2.2 2.2
Debtors’ Days Days 82 81
Interest coverage x 59.2 33.6
Debt to equity ratio x 0.0 0.0
Return on assets % 12.5 11.7
Return on equity % 17.3 16.0
Return on capital employed % 25.3 18.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

CUMMINS INDIA Share Price Performance

Over the last one year, CUMMINS INDIA share price has moved down from Rs 546.7 to Rs 441.0, registering a loss of Rs 105.7 or around 19.3%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 14,496.5 (up 0.9%). Over the last one year it has moved down from 18,694.1 to 14,496.5, a loss of 4,198 points (down 22.5%).

Overall, the S&P BSE SENSEX is up 0.3% over the year.

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

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Related Views on News

CUMMINS INDIA Announces Quarterly Results (1QFY22); Net Profit Up 418.4% (Quarterly Result Update)

Aug 16, 2021 | Updated on Aug 16, 2021

For the quarter ended June 2021, CUMMINS INDIA has posted a net profit of Rs 2 bn (up 418.4% YoY). Sales on the other hand came in at Rs 12 bn (up 137.6% YoY). Read on for a complete analysis of CUMMINS INDIA's quarterly results.

CUMMINS INDIA 2020-21 Annual Report Analysis (Annual Result Update)

Aug 12, 2021 | Updated on Aug 12, 2021

Here's an analysis of the annual report of CUMMINS INDIA for 2020-21. It includes a full income statement, balance sheet and cash flow analysis of CUMMINS INDIA. Also includes updates on the valuation of CUMMINS INDIA.

CUMMINS INDIA Announces Quarterly Results (3QFY21); Net Profit Up 25.7% (Quarterly Result Update)

Feb 1, 2021 | Updated on Feb 1, 2021

For the quarter ended December 2020, CUMMINS INDIA has posted a net profit of Rs 2 bn (up 25.7% YoY). Sales on the other hand came in at Rs 14 bn (down 2.0% YoY). Read on for a complete analysis of CUMMINS INDIA's quarterly results.

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