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CUMMINS INDIA 2020-21 Annual Report Analysis
Wed, 31 Mar

CUMMINS 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.

CUMMINS INDIA Income Statement Analysis

  • Operating income during the year fell 16.0% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 2.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 13.3% in FY21 as against 10.9% in FY20.
  • Depreciation charges increased by 5.5% and finance costs decreased by 20.3% YoY, respectively.
  • Other income grew by 6.3% YoY.
  • Net profit for the year declined by 10.5% YoY.
  • Net profit margins during the year grew from 11.2% in FY20 to 12.0% in FY21.

CUMMINS INDIA Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 51,915 43,601 -16.0%
Other income Rs m 2,586 2,750 6.3%
Total Revenues Rs m 54,501 46,351 -15.0%
Gross profit Rs m 5,682 5,808 2.2%
Depreciation Rs m 1,206 1,272 5.5%
Interest Rs m 210 168 -20.3%
Profit before tax Rs m 6,852 7,119 3.9%
Tax Rs m 1,019 1,900 86.5%
Profit after tax Rs m 5,834 5,219 -10.5%
Gross profit margin % 10.9 13.3
Effective tax rate % 14.9 26.7
Net profit margin % 11.2 12.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



New Research: 2 stocks to buy as Nifty50 heads towards 40,000

CUMMINS INDIA Balance Sheet Analysis

  • The company's current liabilities during FY21 down at Rs 11 billion as compared to Rs 16 billion in FY20, thereby witnessing an decrease of -29.3%.
  • Current assets fell 4% and stood at Rs 33 billion, while fixed assets fell 4% and stood at Rs 27 billion in FY21.
  • Overall, the total assets and liabilities for FY21 stood at Rs 60 billion as against Rs 62 billion during FY20, thereby witnessing a fall of 4%.

CUMMINS INDIA Balance Sheet as on March 2021

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Networth Rs m 44,020 46,514 5.7
 
Current Liabilities Rs m 15,676 11,087 -29.3
Long-term Debt Rs m 0 0 0.0
Total Liabilities Rs m 61,961 59,562 -3.9
 
Current assets Rs m 33,823 32,556 -3.7
Fixed Assets Rs m 28,138 27,006 -4.0
Total Assets Rs m 61,961 59,562 -3.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



CUMMINS INDIA Cash Flow Statement Analysis

  • CUMMINS INDIA's cash flow from operating activities (CFO) during FY21 stood at Rs 8 billion, an improvement of 31.3% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY21 stood at Rs 155 million on a YoY basis.
  • Cash flow from financial activities (CFF) during FY21 stood at Rs -9 billion on a YoY basis.
  • Overall, net cash flows for the company during FY21 stood at Rs -599 million from the Rs -140 million net cash flows seen during FY20.

CUMMINS 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 6,007 7,887 31.3%
Cash Flow from Investing Activities Rs m -2,139 155 -
Cash Flow from Financing Activities Rs m -4,123 -8,732 -
Net Cash Flow Rs m -140 -599 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for CUMMINS INDIA

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 18.8, an decline from the EPS of Rs 21.0 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 919.6, stands at 48.8 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 5.5 times, while the price to sales ratio stands at 5.8 times.
  • The company's price to cash flow (P/CF) ratio stood at 25.8 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 187.3 157.3
TTM Earnings per share Rs 21.0 18.8
Diluted earnings per share Rs 21.0 18.8
Price to Cash Flow x 12.8 25.8
TTM P/E ratio x 15.5 48.8
Price / Book Value ratio x 3.5 3.6
Market Cap Rs m 155,579 167,214
Dividends per share (Unadj.) Rs 14.0 15.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for CUMMINS INDIA

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 2.9x during FY21, from 2.2x 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 43.5x during FY21, from 33.6x 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 11.2% during FY21, from 13.3% 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 15.7% during FY21, from 16.0% 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 9.0% during FY21, from 9.8% 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 2.2 2.9
Debtors’ Days Days 806 911
Interest coverage x 33.6 43.5
Debt to equity ratio x 0.0 0.0
Return on assets % 9.8 9.0
Return on equity % 13.3 11.2
Return on capital employed % 16.0 15.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, 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 up from Rs 325.5 to Rs 919.6, registering a gain of Rs 594.1 or around 182.5%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 21,095.8 (down 0.4%). Over the last one year it has moved up from 10,979.5 to 21,095.8, a gain of 10,116 points (up 92.1%).

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

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

Annual Report FAQs

What is the current share price of CUMMINS INDIA?

CUMMINS INDIA currently trades at Rs 3,021.8 per share. You can check out the latest share price performance of CUMMINS INDIA here...

What was the revenue of CUMMINS INDIA in FY21? How does it compare to earlier years?

The revenues of CUMMINS INDIA stood at Rs 46,351 m in FY21, which was down -15.0% compared to Rs 54,501 m reported in FY20.

CUMMINS INDIA's revenue has fallen from Rs 48,994 m in FY17 to Rs 46,351 m in FY21.

Over the past 5 years, the revenue of CUMMINS INDIA has grown at a CAGR of -1.4%.

What was the net profit of CUMMINS INDIA in FY21? How does it compare to earlier years?

The net profit of CUMMINS INDIA stood at Rs 5,219 m in FY21, which was down -10.5% compared to Rs 5,834 m reported in FY20.

This compares to a net profit of Rs 6,500 m in FY19 and a net profit of Rs 6,260 m in FY18.

Over the past 5 years, CUMMINS INDIA net profit has grown at a CAGR of -5.5%.

What does the cash flow statement of CUMMINS INDIA reveal?

The cash flow statement is the financial statement that presents the cash inflows and outflows of a company during a given period of time.

This statement is one of the most useful tools for judging a company's liquidity position. The ratios and parameters in this statement helps test a company's financial health.

The cash flow statement of CUMMINS INDIA reveals:

  • Cash flow from operations increased in FY21 and stood at Rs 7,887 m as compared to Rs 6,007 m in FY20.
  • Cash flow from investments increased in FY21 and stood at Rs 155 m as compared to Rs -2,139 m in FY20.
  • Cash flow from financial activity decreased in FY21 and stood at Rs -8,732 m as compared to Rs -4,123 m in FY20.

Here's the cash flow statement of CUMMINS INDIA for the past 5 years.

(Rs m)FY17FY18FY19FY20FY21
From Operations7,4826,3195,5326,0077,887
From Investments-4,868-1,340162-2,139155
From Financial Activity-2,265-4,696-5,251-4,123-8,732
Net Cashflow386284431-140-599

What does the Key Ratio analysis of CUMMINS INDIA reveal?

Be it the company's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.

The ratio/financial analysis of CUMMINS INDIA reveals:

  • Operating profit margins witnessed a fall and down at 13.3% in FY21 as against 10.9% in FY20.
  • Net profit margins grew from 11.2% in FY20 to 12.0% in FY21.
  • Debt to Equity ratio for FY21 stood at 0.0 as compared to 0.0 in FY20.

Here's the ratio/financial analysis of CUMMINS INDIA for the past 5 years.

 FY17FY18FY19FY20FY21
Operating Profit Margin (%)16.815.715.210.913.3
Net Profit Margin (%)13.812.411.411.212.0
Debt to Equity Ratio (x)0.00.00.00.00.0

Read: Latest Annual Report Analysis of CUMMINS INDIA

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