EICHER MOTOR 2020-21 Annual Report Analysis

Wed, 31 Mar

EICHER MOTOR 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.

EICHER MOTOR Income Statement Analysis

• Operating income during the year fell 4.7% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 18.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 20.4% in FY21 as against 23.8% in FY20.
• Depreciation charges increased by 18.1% and finance costs decreased by 12.9% YoY, respectively.
• Other income declined by 16.6% YoY.
• Net profit for the year declined by 26.7% YoY.
• Net profit margins during the year declined from 19.6% in FY20 to 15.1% in FY21.

EICHER MOTOR Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	91,536	87,204	-4.7%
Other income	Rs m	5,433	4,532	-16.6%
Total Revenues	Rs m	96,968	91,735	-5.4%
Gross profit	Rs m	21,804	17,813	-18.3%
Depreciation	Rs m	3,815	4,507	18.1%
Interest	Rs m	189	165	-12.9%
Profit before tax	Rs m	23,232	17,673	-23.9%
Tax	Rs m	5,275	4,515	-14.4%
Profit after tax	Rs m	17,957	13,158	-26.7%
Gross profit margin	%	23.8	20.4
Effective tax rate	%	22.7	25.5
Net profit margin	%	19.6	15.1

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EICHER MOTOR Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 26 billion as compared to Rs 20 billion in FY20, thereby witnessing an increase of 30.2%.
• Current assets rose 38% and stood at Rs 88 billion, while fixed assets fell 5% and stood at Rs 58 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 146 billion as against Rs 124 billion during FY20, thereby witnessing a growth of 17%.

EICHER MOTOR Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	99,109	113,582	14.6
Current Liabilities	Rs m	20,186	26,288	30.2
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	124,497	145,586	16.9
Current assets	Rs m	63,746	88,085	38.2
Fixed Assets	Rs m	60,751	57,501	-5.3
Total Assets	Rs m	124,497	145,586	16.9

EICHER MOTOR Cash Flow Statement Analysis

• EICHER MOTOR's cash flow from operating activities (CFO) during FY21 stood at Rs 17 billion, an improvement of 1.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -16 billion, an improvement of 9.2% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -148 million, an improvement of 98% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 509 million from the Rs -7 billion net cash flows seen during FY20.

EICHER MOTOR 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	16,941	17,136	1.1%
Cash Flow from Investing Activities	Rs m	-15,084	-16,479	-
Cash Flow from Financing Activities	Rs m	-8,583	-148	-
Net Cash Flow	Rs m	-6,725	509	-

Current Valuations for EICHER MOTOR

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 48.1, an decline from the EPS of Rs 657.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,603.8, stands at 54.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.3 times, while the price to sales ratio stands at 8.2 times.
• The company's price to cash flow (P/CF) ratio stood at 188.5 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	3,353.0	319.0
TTM Earnings per share	Rs	657.8	48.1
Diluted earnings per share	Rs	65.7	48.1
Price to Cash Flow	x	164.4	188.5
TTM P/E ratio	x	199.3	54.1
Price / Book Value ratio	x	5.0	29.3
Market Cap	Rs m	496,641	3,329,156
Dividends per share (Unadj.)	Rs	12.5	17.0

Ratio Analysis for EICHER MOTOR

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.4x during FY21, from 3.2x 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 deteriorated and stood at 108.4x during FY21, from 124.0x 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 11.6% during FY21, from 18.1% 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 declined and down at 15.7% during FY21, from 23.6% 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 9.2% during FY21, from 14.6% 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	3.2	3.4
Debtors’ Days	Days	0	1
Interest coverage	x	124.0	108.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	14.6	9.2
Return on equity	%	18.1	11.6
Return on capital employed	%	23.6	15.7

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

EICHER MOTOR Share Price Performance

Over the last one year, EICHER MOTOR share price has moved down from Rs 13,087.2 to Rs 2,603.8, registering a loss of Rs 10,483.5 or around 80.1%.

Meanwhile, the S&P BSE AUTO Index is trading at Rs 22,252.2 (down 0.0%). Over the last one year it has moved up from 10,746.2 to 22,252.2, a gain of 11,506 points (up 107.1%).

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

(To know more, check out historical annual results for EICHER MOTOR and quarterly results for EICHER MOTOR)

Read: Latest Annual Report Analysis of EICHER MOTORS