DCW. 2020-21 Annual Report Analysis

Wed, 31 Mar

DCW. 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.

DCW. Income Statement Analysis

• Operating income during the year rose 14.6% on a year-on-year (YoY) basis.
• The company's operating profit increased by 43.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 14.3% in FY21 as against 11.5% in FY20.
• Depreciation charges increased by 0.2% and finance costs increased by 11.4% YoY, respectively.
• Other income grew by 32.7% YoY.
• Net profit for the year declined by 114.2% YoY.
• Net profit margins during the year grew from 2.1% in FY20 to 0.3% in FY21.

DCW. Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	12,773	14,643	14.6%
Other income	Rs m	85	113	32.7%
Total Revenues	Rs m	12,858	14,756	14.8%
Gross profit	Rs m	1,465	2,094	43.0%
Depreciation	Rs m	872	874	0.2%
Interest	Rs m	1,075	1,197	11.4%
Profit before tax	Rs m	-397	137	-134.5%
Tax	Rs m	-129	99	-176.6%
Profit after tax	Rs m	-268	38	-114.2%
Gross profit margin	%	11.5	14.3
Effective tax rate	%	32.5	72.3
Net profit margin	%	-2.1	0.3

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DCW. Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 5 billion as compared to Rs 6 billion in FY20, thereby witnessing an decrease of -9.8%.
• Long-term debt stood at Rs 5 billion as compared to Rs 5 billion during FY20, a growth of 11.9%.
• Current assets rose 22% and stood at Rs 4 billion, while fixed assets fell 2% and stood at Rs 15 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 19 billion as against Rs 18 billion during FY20, thereby witnessing a growth of 2%.

DCW. Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	6,778	6,872	1.4
Current Liabilities	Rs m	6,003	5,413	-9.8
Long-term Debt	Rs m	4,673	5,227	11.9
Total Liabilities	Rs m	18,337	18,752	2.3
Current assets	Rs m	3,379	4,112	21.7
Fixed Assets	Rs m	14,958	14,641	-2.1
Total Assets	Rs m	18,337	18,752	2.3

DCW. Cash Flow Statement Analysis

• DCW.'s cash flow from operating activities (CFO) during FY21 stood at Rs 2 billion, an improvement of 28.4% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -779 million, an improvement of 81.1% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -985 million, an improvement of 17% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 413 million from the Rs 75 million net cash flows seen during FY20.

DCW. 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	1,695	2,177	28.4%
Cash Flow from Investing Activities	Rs m	-430	-779	-
Cash Flow from Financing Activities	Rs m	-1,190	-985	-
Net Cash Flow	Rs m	75	413	447.3%

Current Valuations for DCW.

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.1, an improvement from the EPS of Rs -1.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 26.2, stands at 180.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.0 times, while the price to sales ratio stands at 0.5 times.
• The company's price to cash flow (P/CF) ratio stood at 5.8 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	48.9	56.1
TTM Earnings per share	Rs	-1.0	0.1
Diluted earnings per share	Rs	-1.0	0.1
Price to Cash Flow	x	3.2	5.8
TTM P/E ratio	x	-7.4	180.4
Price / Book Value ratio	x	0.6	0.8
Market Cap	Rs m	3,931	5,273
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for DCW.

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.8x during FY21, from 0.6x 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 1.1x during FY21, from 0.6x 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 improved and stood at 0.6% during FY21, from -3.9% 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 11.0% during FY21, from 5.9% 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 6.6% during FY21, from 4.4% 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	0.6	0.8
Debtors’ Days	Days	208	237
Interest coverage	x	0.6	1.1
Debt to equity ratio	x	0.7	0.8
Return on assets	%	4.4	6.6
Return on equity	%	-3.9	0.6
Return on capital employed	%	5.9	11.0

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

DCW. Share Price Performance

Over the last one year, DCW. share price has moved up from Rs 7.3 to Rs 26.2, registering a gain of Rs 18.9 or around 258.4%.

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

(To know more, check out historical annual results for DCW. and quarterly results for DCW.)

Read: Latest Annual Report Analysis of DCW.