DFM FOODS 2020-21 Annual Report Analysis

Wed, 31 Mar

DFM FOODS 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.

DFM FOODS Income Statement Analysis

• Operating income during the year rose 3.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 33.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 10.6% in FY21 as against 8.2% in FY20.
• Depreciation charges increased by 16.1% and finance costs increased by 8.9% YoY, respectively.
• Other income grew by 2.1% YoY.
• Net profit for the year grew by 17.5% YoY.
• Net profit margins during the year grew from 4.8% in FY20 to 5.5% in FY21.

DFM FOODS Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	5,079	5,241	3.2%
Other income	Rs m	68	69	2.1%
Total Revenues	Rs m	5,147	5,310	3.2%
Gross profit	Rs m	417	556	33.4%
Depreciation	Rs m	114	132	16.1%
Interest	Rs m	99	108	8.9%
Profit before tax	Rs m	272	386	41.8%
Tax	Rs m	28	99	254.1%
Profit after tax	Rs m	244	287	17.5%
Gross profit margin	%	8.2	10.6
Effective tax rate	%	10.3	25.6
Net profit margin	%	4.8	5.5

DFM FOODS Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 1 billion as compared to Rs 1 billion in FY20, thereby witnessing an increase of 5.6%.
• Long-term debt down at Rs 713 million as compared to Rs 783 million during FY20, a fall of 8.9%.
• Current assets rose 25% and stood at Rs 2 billion, while fixed assets rose 3% and stood at Rs 3 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 5 billion as against Rs 4 billion during FY20, thereby witnessing a growth of 12%.

DFM FOODS Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	1,429	1,741	21.8
Current Liabilities	Rs m	1,325	1,399	5.6
Long-term Debt	Rs m	783	713	-8.9
Total Liabilities	Rs m	4,065	4,542	11.7
Current assets	Rs m	1,627	2,039	25.3
Fixed Assets	Rs m	2,438	2,503	2.7
Total Assets	Rs m	4,065	4,542	11.7

DFM FOODS Cash Flow Statement Analysis

• DFM FOODS's cash flow from operating activities (CFO) during FY21 stood at Rs 389 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -244 million, an improvement of 76.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -224 million on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -79 million from the Rs 76 million net cash flows seen during FY20.

DFM FOODS 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	425	389	-8.5%
Cash Flow from Investing Activities	Rs m	-138	-244	-
Cash Flow from Financing Activities	Rs m	-211	-224	-
Net Cash Flow	Rs m	76	-79	-

Current Valuations for DFM FOODS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 5.7, an improvement from the EPS of Rs 4.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 365.7, stands at 64.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 10.6 times, while the price to sales ratio stands at 3.5 times.
• The company's price to cash flow (P/CF) ratio stood at 36.8 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	101.4	104.2
TTM Earnings per share	Rs	4.9	5.7
Diluted earnings per share	Rs	4.9	5.7
Price to Cash Flow	x	24.7	36.8
TTM P/E ratio	x	36.2	64.1
Price / Book Value ratio	x	8.5	8.9
Market Cap	Rs m	12,124	15,426
Dividends per share (Unadj.)	Rs	0.0	1.0

Ratio Analysis for DFM FOODS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.5x during FY21, from 1.2x 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 4.6x during FY21, from 3.7x 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 16.5% during FY21, from 17.1% 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 20.1% during FY21, from 16.8% 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 8.7% during FY21, from 8.4% 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	1.2	1.5
Debtors’ Days	Days	1	28
Interest coverage	x	3.7	4.6
Debt to equity ratio	x	0.5	0.4
Return on assets	%	8.4	8.7
Return on equity	%	17.1	16.5
Return on capital employed	%	16.8	20.1

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

DFM FOODS Share Price Performance

Over the last one year, DFM FOODS share price has moved up from Rs 175.8 to Rs 365.7, registering a gain of Rs 189.9 or around 108.0%.

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

(To know more, check out historical annual results for DFM FOODS and quarterly results for DFM FOODS)

Read: Latest Annual Report Analysis of DFM FOODS