FERMENTA BIOTECH 2020-21 Annual Report Analysis

Wed, 31 Mar

FERMENTA BIOTECH 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.

FERMENTA BIOTECH Income Statement Analysis

• Operating income during the year rose 28.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 28.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 21.9% in FY21 as against 22.0% in FY20.
• Depreciation charges increased by 35.4% and finance costs decreased by 5.4% YoY, respectively.
• Other income declined by 41.1% YoY.
• Net profit for the year declined by 28.5% YoY.
• Net profit margins during the year declined from 20.3% in FY20 to 11.3% in FY21.

FERMENTA BIOTECH Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	2,929	3,773	28.8%
Other income	Rs m	142	84	-41.1%
Total Revenues	Rs m	3,072	3,857	25.6%
Gross profit	Rs m	643	826	28.4%
Depreciation	Rs m	150	203	35.4%
Interest	Rs m	201	190	-5.4%
Profit before tax	Rs m	434	516	18.9%
Tax	Rs m	-161	91	-156.5%
Profit after tax	Rs m	595	425	-28.5%
Gross profit margin	%	22.0	21.9
Effective tax rate	%	-37.1	17.6
Net profit margin	%	20.3	11.3

FERMENTA BIOTECH Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 2 billion as compared to Rs 2 billion in FY20, thereby witnessing an increase of 7.6%.
• Long-term debt stood at Rs 1 billion as compared to Rs 1 billion during FY20, a growth of 8.5%.
• Current assets rose 9% and stood at Rs 3 billion, while fixed assets rose 16% and stood at Rs 3 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 6 billion as against Rs 6 billion during FY20, thereby witnessing a growth of 12%.

FERMENTA BIOTECH Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	3,034	3,486	14.9
Current Liabilities	Rs m	1,946	2,093	7.6
Long-term Debt	Rs m	1,018	1,104	8.5
Total Liabilities	Rs m	5,756	6,468	12.4
Current assets	Rs m	2,840	3,096	9.0
Fixed Assets	Rs m	2,916	3,371	15.6
Total Assets	Rs m	5,756	6,468	12.4

FERMENTA BIOTECH Cash Flow Statement Analysis

• FERMENTA BIOTECH's cash flow from operating activities (CFO) during FY21 stood at Rs 626 million, an improvement of 81.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -416 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -11 million, an improvement of 98% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 205 million from the Rs -566 million net cash flows seen during FY20.

FERMENTA BIOTECH 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	345	626	81.7%
Cash Flow from Investing Activities	Rs m	-437	-416	-
Cash Flow from Financing Activities	Rs m	-474	-11	-
Net Cash Flow	Rs m	-566	205	-

Current Valuations for FERMENTA BIOTECH

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 14.7, an decline from the EPS of Rs 20.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 250.3, stands at 17.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.1 times, while the price to sales ratio stands at 1.9 times.
• The company's price to cash flow (P/CF) ratio stood at 15.1 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	101.5	130.8
TTM Earnings per share	Rs	20.6	14.7
Diluted earnings per share	Rs	20.2	14.5
Price to Cash Flow	x	8.4	15.1
TTM P/E ratio	x	10.5	17.3
Price / Book Value ratio	x	5.5	2.7
Market Cap	Rs m	16,760	9,520
Dividends per share (Unadj.)	Rs	5.0	2.5

Ratio Analysis for FERMENTA BIOTECH

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.5x during FY21, from 1.5x 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 3.7x during FY21, from 3.2x 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 12.2% during FY21, from 19.6% 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 15.4% during FY21, from 15.7% 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 9.5% during FY21, from 13.8% 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	1.5	1.5
Debtors’ Days	Days	869	658
Interest coverage	x	3.2	3.7
Debt to equity ratio	x	0.3	0.3
Return on assets	%	13.8	9.5
Return on equity	%	19.6	12.2
Return on capital employed	%	15.7	15.4

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

FERMENTA BIOTECH Share Price Performance

Over the last one year, FERMENTA BIOTECH share price has moved up from Rs 212.8 to Rs 250.3, registering a gain of Rs 37.6 or around 17.6%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 21,328.2 (up 0.4%). Over the last one year it has moved up from 12,148.6 to 21,328.2, a gain of 9,180 points (up 75.6%).

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

(To know more, check out historical annual results for FERMENTA BIOTECH and quarterly results for FERMENTA BIOTECH)

Read: Latest Annual Report Analysis of FERMENTA BIOTECH