ELECON ENGINEERING 2020-21 Annual Report Analysis

Wed, 31 Mar

ELECON ENGINEERING 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.

ELECON ENGINEERING Income Statement Analysis

• Operating income during the year fell 4.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 0.1% YoY during the fiscal. Operating profit margins witnessed a fall and down at 10.8% in FY21 as against 10.3% in FY20.
• Depreciation charges decreased by 2.2% and finance costs decreased by 22.3% YoY, respectively.
• Other income grew by 117.6% YoY.
• Net profit for the year declined by 36.7% YoY.
• Net profit margins during the year declined from 8.1% in FY20 to 5.3% in FY21.

ELECON ENGINEERING Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	10,885	10,447	-4.0%
Other income	Rs m	365	794	117.6%
Total Revenues	Rs m	11,249	11,241	-0.1%
Gross profit	Rs m	1,124	1,125	0.1%
Depreciation	Rs m	533	521	-2.2%
Interest	Rs m	777	603	-22.3%
Profit before tax	Rs m	179	794	342.8%
Tax	Rs m	-702	237	-133.7%
Profit after tax	Rs m	881	558	-36.7%
Gross profit margin	%	10.3	10.8
Effective tax rate	%	-391.4	29.8
Net profit margin	%	8.1	5.3

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ELECON ENGINEERING Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 8 billion as compared to Rs 10 billion in FY20, thereby witnessing an decrease of -17.4%.
• Long-term debt down at Rs 1 billion as compared to Rs 1 billion during FY20, a fall of 19.8%.
• Current assets fell 8% and stood at Rs 11 billion, while fixed assets fell 4% and stood at Rs 9 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 20 billion as against Rs 21 billion during FY20, thereby witnessing a fall of 7%.

ELECON ENGINEERING Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	8,542	9,192	7.6
Current Liabilities	Rs m	10,152	8,389	-17.4
Long-term Debt	Rs m	1,464	1,174	-19.8
Total Liabilities	Rs m	21,294	19,877	-6.7
Current assets	Rs m	12,358	11,336	-8.3
Fixed Assets	Rs m	8,936	8,542	-4.4
Total Assets	Rs m	21,294	19,877	-6.7

ELECON ENGINEERING Cash Flow Statement Analysis

• ELECON ENGINEERING's cash flow from operating activities (CFO) during FY21 stood at Rs 2 billion, an improvement of 11.6% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -187 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -2 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 189 million from the Rs 212 million net cash flows seen during FY20.

ELECON ENGINEERING 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	2,222	2,480	11.6%
Cash Flow from Investing Activities	Rs m	-253	-187	-
Cash Flow from Financing Activities	Rs m	-1,756	-2,105	-
Net Cash Flow	Rs m	212	189	-11.2%

Current Valuations for ELECON ENGINEERING

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 5.0, an decline from the EPS of Rs 7.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 63.4, stands at 12.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.8 times, while the price to sales ratio stands at 0.7 times.
• The company's price to cash flow (P/CF) ratio stood at 4.5 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	97.0	93.1
TTM Earnings per share	Rs	7.9	5.0
Diluted earnings per share	Rs	7.9	5.0
Price to Cash Flow	x	1.5	4.5
TTM P/E ratio	x	2.4	12.7
Price / Book Value ratio	x	0.5	0.5
Market Cap	Rs m	4,496	4,875
Dividends per share (Unadj.)	Rs	0.0	0.4

Ratio Analysis for ELECON ENGINEERING

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x 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 2.3x during FY21, from 1.2x 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 6.1% during FY21, from 10.3% 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 13.5% during FY21, from 9.6% 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 5.8% during FY21, from 7.8% 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	1.2	1.4
Debtors’ Days	Days	2,052	1,774
Interest coverage	x	1.2	2.3
Debt to equity ratio	x	0.2	0.1
Return on assets	%	7.8	5.8
Return on equity	%	10.3	6.1
Return on capital employed	%	9.6	13.5

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

ELECON ENGINEERING Share Price Performance

Over the last one year, ELECON ENGINEERING share price has moved up from Rs 19.1 to Rs 63.4, registering a gain of Rs 44.3 or around 232.5%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 21,095.8 (down 0.4%). Over the last one year it has moved up from 10,979.5 to 21,095.8, a gain of 10,116 points (up 92.1%).

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

(To know more, check out historical annual results for ELECON ENGINEERING and quarterly results for ELECON ENGINEERING)

Read: Latest Annual Report Analysis of ELECON ENGINEERING