DEEPAK FERTILISERS 2020-21 Annual Report Analysis

Wed, 31 Mar

DEEPAK FERTILISERS 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.

DEEPAK FERTILISERS Income Statement Analysis

• Operating income during the year rose 24.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 105.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 16.4% in FY21 as against 9.9% in FY20.
• Depreciation charges decreased by 0.7% and finance costs decreased by 22.7% YoY, respectively.
• Other income declined by 65.3% YoY.
• Net profit for the year grew by 355.8% YoY.
• Net profit margins during the year grew from 1.9% in FY20 to 7.0% in FY21.

DEEPAK FERTILISERS Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	46,854	58,085	24.0%
Other income	Rs m	955	332	-65.3%
Total Revenues	Rs m	47,808	58,416	22.2%
Gross profit	Rs m	4,643	9,548	105.7%
Depreciation	Rs m	2,135	2,120	-0.7%
Interest	Rs m	2,429	1,877	-22.7%
Profit before tax	Rs m	1,033	5,883	469.8%
Tax	Rs m	141	1,819	1,192.7%
Profit after tax	Rs m	892	4,064	355.8%
Gross profit margin	%	9.9	16.4
Effective tax rate	%	13.6	30.9
Net profit margin	%	1.9	7.0

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DEEPAK FERTILISERS Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 20 billion as compared to Rs 25 billion in FY20, thereby witnessing an decrease of -20.7%.
• Long-term debt stood at Rs 22 billion as compared to Rs 21 billion during FY20, a growth of 4.9%.
• Current assets rose 0% and stood at Rs 24 billion, while fixed assets rose 5% and stood at Rs 47 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 71 billion as against Rs 69 billion during FY20, thereby witnessing a growth of 3%.

DEEPAK FERTILISERS Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	21,391	27,026	26.3
Current Liabilities	Rs m	24,967	19,797	-20.7
Long-term Debt	Rs m	20,843	21,866	4.9
Total Liabilities	Rs m	68,853	70,962	3.1
Current assets	Rs m	24,055	24,094	0.2
Fixed Assets	Rs m	44,798	46,868	4.6
Total Assets	Rs m	68,853	70,962	3.1

DEEPAK FERTILISERS Cash Flow Statement Analysis

• DEEPAK FERTILISERS's cash flow from operating activities (CFO) during FY21 stood at Rs 12 billion, an improvement of 115.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -6 billion, an improvement of 300.8% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -6 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 105 million from the Rs 688 million net cash flows seen during FY20.

DEEPAK FERTILISERS 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	5,783	12,475	115.7%
Cash Flow from Investing Activities	Rs m	-1,557	-6,239	-
Cash Flow from Financing Activities	Rs m	-3,538	-6,131	-
Net Cash Flow	Rs m	688	105	-84.7%

Current Valuations for DEEPAK FERTILISERS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 39.6, an improvement from the EPS of Rs 10.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 226.9, stands at 6.8 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 0.4 times.
• The company's price to cash flow (P/CF) ratio stood at 2.7 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	524.8	565.7
TTM Earnings per share	Rs	10.0	39.6
Diluted earnings per share	Rs	7.4	33.6
Price to Cash Flow	x	3.0	2.7
TTM P/E ratio	x	10.2	6.8
Price / Book Value ratio	x	0.5	0.6
Market Cap	Rs m	10,089	16,464
Dividends per share (Unadj.)	Rs	3.0	7.5

Ratio Analysis for DEEPAK FERTILISERS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.2x during FY21, from 1.0x 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 4.1x during FY21, from 1.4x 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 15.0% during FY21, from 4.2% 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 15.9% during FY21, from 8.2% 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 8.4% during FY21, from 4.8% 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	1.0	1.2
Debtors’ Days	Days	994	569
Interest coverage	x	1.4	4.1
Debt to equity ratio	x	1.0	0.8
Return on assets	%	4.8	8.4
Return on equity	%	4.2	15.0
Return on capital employed	%	8.2	15.9

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

DEEPAK FERTILISERS Share Price Performance

Over the last one year, DEEPAK FERTILISERS share price has moved up from Rs 75.0 to Rs 226.9, registering a gain of Rs 152.0 or around 202.7%.

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

(To know more, check out historical annual results for DEEPAK FERTILISERS and quarterly results for DEEPAK FERTILISERS)

Read: Latest Annual Report Analysis of DEEPAK FERTILISERS