ELECTROSTEEL CAST 2020-21 Annual Report Analysis

Wed, 31 Mar

ELECTROSTEEL CAST 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.

ELECTROSTEEL CAST Income Statement Analysis

• Operating income during the year rose 28.0% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 49.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 5.4% in FY21 as against 13.5% in FY20.
• Depreciation charges increased by 59.6% and finance costs decreased by 6.2% YoY, respectively.
• Other income grew by 83.5% YoY.
• Net profit for the year declined by 212.7% YoY.
• Net profit margins during the year declined from 3.2% in FY20 to 2.8% in FY21.

ELECTROSTEEL CAST Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	27,110	34,706	28.0%
Other income	Rs m	332	609	83.5%
Total Revenues	Rs m	27,443	35,315	28.7%
Gross profit	Rs m	3,660	1,866	-49.0%
Depreciation	Rs m	571	912	59.6%
Interest	Rs m	2,276	2,134	-6.2%
Profit before tax	Rs m	1,145	-570	-149.8%
Tax	Rs m	282	403	43.0%
Profit after tax	Rs m	863	-973	-212.7%
Gross profit margin	%	13.5	5.4
Effective tax rate	%	24.6	-70.8
Net profit margin	%	3.2	-2.8

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ELECTROSTEEL CAST Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 21 billion as compared to Rs 16 billion in FY20, thereby witnessing an increase of 27.9%.
• Long-term debt stood at Rs 8 billion as compared to Rs 7 billion during FY20, a growth of 14.2%.
• Current assets rose 59% and stood at Rs 30 billion, while fixed assets rose 12% and stood at Rs 41 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 72 billion as against Rs 56 billion during FY20, thereby witnessing a growth of 28%.

ELECTROSTEEL CAST Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	28,802	28,686	-0.4
Current Liabilities	Rs m	16,169	20,672	27.9
Long-term Debt	Rs m	7,026	8,024	14.2
Total Liabilities	Rs m	55,928	71,814	28.4
Current assets	Rs m	19,027	30,346	59.5
Fixed Assets	Rs m	36,901	41,468	12.4
Total Assets	Rs m	55,928	71,814	28.4

ELECTROSTEEL CAST Cash Flow Statement Analysis

• ELECTROSTEEL CAST's cash flow from operating activities (CFO) during FY21 stood at Rs 5 billion, an improvement of 106.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs 931 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -4 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 2 billion from the Rs -156 million net cash flows seen during FY20.

ELECTROSTEEL CAST 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	2,247	4,648	106.8%
Cash Flow from Investing Activities	Rs m	-204	931	-
Cash Flow from Financing Activities	Rs m	-2,199	-4,216	-
Net Cash Flow	Rs m	-156	1,535	-

Current Valuations for ELECTROSTEEL CAST

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -2.2, an decline from the EPS of Rs 2.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 25.0, stands at -15.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.5 times, while the price to sales ratio stands at 0.3 times.
• The company's price to cash flow (P/CF) ratio stood at -126.1 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	62.6	80.2
TTM Earnings per share	Rs	2.0	-2.2
Diluted earnings per share	Rs	1.5	-1.6
Price to Cash Flow	x	3.8	-126.1
TTM P/E ratio	x	6.3	-15.4
Price / Book Value ratio	x	0.2	0.3
Market Cap	Rs m	6,408	7,687
Dividends per share (Unadj.)	Rs	0.3	0.3

Ratio Analysis for ELECTROSTEEL CAST

• 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 deteriorated and stood at 0.7x during FY21, from 1.5x 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 -3.4% during FY21, from 3.0% 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 4.3% during FY21, from 9.5% 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 1.6% during FY21, from 5.6% 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	1.2	1.5
Debtors’ Days	Days	832	808
Interest coverage	x	1.5	0.7
Debt to equity ratio	x	0.2	0.3
Return on assets	%	5.6	1.6
Return on equity	%	3.0	-3.4
Return on capital employed	%	9.5	4.3

To see how ELECTROSTEEL CAST has performed over the last 5 years, please visit here.

ELECTROSTEEL CAST Share Price Performance

Over the last one year, ELECTROSTEEL CAST share price has moved up from Rs 9.2 to Rs 25.0, registering a gain of Rs 15.8 or around 172.6%.

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

(To know more, check out historical annual results for ELECTROSTEEL CAST and quarterly results for ELECTROSTEEL CAST)

Read: Latest Annual Report Analysis of ELECTROSTEEL CAST