ELECON ENGINEERING 2021-22 Annual Report Analysis

Wed, 8 Jun

ELECON ENGINEERING has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

ELECON ENGINEERING Income Statement Analysis

• Operating income during the year rose 15.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 113.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 19.9% in FY22 as against 10.7% in FY21.
• Depreciation charges decreased by 6.8% and finance costs decreased by 36.9% YoY, respectively.
• Other income declined by 79.9% YoY.
• Net profit for the year grew by 149.4% YoY.
• Net profit margins during the year grew from 5.3% in FY21 to 11.6% in FY22.

ELECON ENGINEERING Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	10,444	12,036	15.2%
Other income	Rs m	796	160	-79.9%
Total Revenues	Rs m	11,241	12,195	8.5%
Gross profit	Rs m	1,122	2,398	113.6%
Depreciation	Rs m	521	486	-6.8%
Interest	Rs m	603	381	-36.9%
Profit before tax	Rs m	794	1,691	112.9%
Tax	Rs m	237	300	26.9%
Profit after tax	Rs m	558	1,391	149.4%
Gross profit margin	%	10.7	19.9
Effective tax rate	%	29.8	17.8
Net profit margin	%	5.3	11.6

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ELECON ENGINEERING Balance Sheet Analysis

• The company's current liabilities during FY22 down at Rs 5 billion as compared to Rs 8 billion in FY21, thereby witnessing an decrease of -35.7%.
• Long-term debt down at Rs 197 million as compared to Rs 1 billion during FY21, a fall of 83.3%.
• Current assets fell 22% and stood at Rs 9 billion, while fixed assets fell 3% and stood at Rs 8 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 17 billion as against Rs 20 billion during FY21, thereby witnessing a fall of 14%.

ELECON ENGINEERING Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	9,192	10,502	14.2
Current Liabilities	Rs m	8,389	5,395	-35.7
Long-term Debt	Rs m	1,174	197	-83.3
Total Liabilities	Rs m	19,877	17,146	-13.7
Current assets	Rs m	11,336	8,865	-21.8
Fixed Assets	Rs m	8,541	8,281	-3.0
Total Assets	Rs m	19,877	17,146	-13.7

ELECON ENGINEERING Cash Flow Statement Analysis

• ELECON ENGINEERING's cash flow from operating activities (CFO) during FY22 stood at Rs 3 billion, an improvement of 0.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -118 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -3 billion on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -118 million from the Rs 189 million net cash flows seen during FY21.

ELECON ENGINEERING Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	2,480	2,500	0.8%
Cash Flow from Investing Activities	Rs m	-187	-118	-
Cash Flow from Financing Activities	Rs m	-2,105	-2,500	-
Net Cash Flow	Rs m	189	-118	-

Current Valuations for ELECON ENGINEERING

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 12.4, an improvement from the EPS of Rs 5.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 252.5, stands at 20.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.7 times, while the price to sales ratio stands at 2.4 times.
• The company's price to cash flow (P/CF) ratio stood at 8.4 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	93.1	107.3
TTM Earnings per share	Rs	5.0	12.4
Diluted earnings per share	Rs	5.0	12.4
Price to Cash Flow	x	6.6	8.4
TTM P/E ratio	x	12.7	20.4
Price / Book Value ratio	x	0.5	1.5
Market Cap	Rs m	4,875	15,733
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for ELECON ENGINEERING

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.6x during FY22, from 1.4x during FY21. 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 5.4x during FY22, from 2.3x during FY21. 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 13.2% during FY22, from 6.1% during FY22. 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 19.4% during FY22, from 13.5% during FY21. 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 10.3% during FY22, from 5.8% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	1.4	1.6
Debtors’ Days	Days	1,774	1,259
Interest coverage	x	2.3	5.4
Debt to equity ratio	x	0.1	0.0
Return on assets	%	5.8	10.3
Return on equity	%	6.1	13.2
Return on capital employed	%	13.5	19.4

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 122.2 to Rs 252.5, registering a gain of Rs 130.4 or around 106.7%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 26,766.9 (up 0.8%). Over the last one year it has moved up from 23,366.4 to 26,766.9, a gain of 3,400 points (up 14.6%).

Overall, the S&P BSE SENSEX is up 5.5% 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