EMAMI PAPER MILLS 2020-21 Annual Report Analysis

Wed, 31 Mar

EMAMI PAPER MILLS 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.

EMAMI PAPER MILLS Income Statement Analysis

• Operating income during the year fell 19.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 37.5% YoY during the fiscal. Operating profit margins witnessed a fall and down at 20.5% in FY21 as against 12.0% in FY20.
• Depreciation charges decreased by 0.5% and finance costs decreased by 23.0% YoY, respectively.
• Other income grew by 90.5% YoY.
• Net profit for the year declined by 588.6% YoY.
• Net profit margins during the year grew from 0.7% in FY20 to 4.2% in FY21.

EMAMI PAPER MILLS Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	15,153	12,163	-19.7%
Other income	Rs m	110	209	90.5%
Total Revenues	Rs m	15,263	12,372	-18.9%
Gross profit	Rs m	1,816	2,497	37.5%
Depreciation	Rs m	725	721	-0.5%
Interest	Rs m	1,245	958	-23.0%
Profit before tax	Rs m	-45	1,026	-2,370.4%
Tax	Rs m	59	516	769.5%
Profit after tax	Rs m	-105	511	-588.6%
Gross profit margin	%	12.0	20.5
Effective tax rate	%	-131.2	50.2
Net profit margin	%	-0.7	4.2

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EMAMI PAPER MILLS Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 7 billion as compared to Rs 8 billion in FY20, thereby witnessing an decrease of -12.6%.
• Long-term debt down at Rs 4 billion as compared to Rs 8 billion during FY20, a fall of 48.1%.
• Current assets fell 14% and stood at Rs 5 billion, while fixed assets fell 3% and stood at Rs 13 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 18 billion as against Rs 19 billion during FY20, thereby witnessing a fall of 7%.

EMAMI PAPER MILLS Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	2,189	5,395	146.4
Current Liabilities	Rs m	8,440	7,381	-12.6
Long-term Debt	Rs m	7,803	4,051	-48.1
Total Liabilities	Rs m	19,178	17,882	-6.8
Current assets	Rs m	5,826	4,986	-14.4
Fixed Assets	Rs m	13,352	12,897	-3.4
Total Assets	Rs m	19,178	17,882	-6.8

EMAMI PAPER MILLS Cash Flow Statement Analysis

• EMAMI PAPER MILLS's cash flow from operating activities (CFO) during FY21 stood at Rs 2 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -73 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -2 billion, an improvement of 26% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -72 million from the Rs 98 million net cash flows seen during FY20.

EMAMI PAPER MILLS 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	3,133	2,463	-21.4%
Cash Flow from Investing Activities	Rs m	312	-73	-
Cash Flow from Financing Activities	Rs m	-3,347	-2,463	-
Net Cash Flow	Rs m	98	-72	-

Current Valuations for EMAMI PAPER MILLS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 8.4, an improvement from the EPS of Rs -1.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 123.3, stands at 14.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.4 times, while the price to sales ratio stands at 0.6 times.
• The company's price to cash flow (P/CF) ratio stood at 4.9 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	250.5	201.0
TTM Earnings per share	Rs	-1.7	8.4
Diluted earnings per share	Rs	-1.7	8.4
Price to Cash Flow	x	5.1	4.9
TTM P/E ratio	x	-11.3	14.6
Price / Book Value ratio	x	3.1	1.1
Market Cap	Rs m	6,842	6,088
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for EMAMI PAPER MILLS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.7x during FY21, from 0.7x 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 2.1x during FY21, from 1.0x 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 improved and stood at 9.5% during FY21, from -4.8% 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 21.0% during FY21, from 12.0% 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 improved and stood at 8.2% during FY21, from 5.9% 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	0.7	0.7
Debtors’ Days	Days	5	6
Interest coverage	x	1.0	2.1
Debt to equity ratio	x	3.6	0.8
Return on assets	%	5.9	8.2
Return on equity	%	-4.8	9.5
Return on capital employed	%	12.0	21.0

To see how EMAMI PAPER MILLS has performed over the last 5 years, please visit here.

EMAMI PAPER MILLS Share Price Performance

Over the last one year, EMAMI PAPER MILLS share price has moved up from Rs 52.4 to Rs 123.3, registering a gain of Rs 71.0 or around 135.5%.

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

(To know more, check out historical annual results for EMAMI PAPER MILLS and quarterly results for EMAMI PAPER MILLS)

Read: Latest Annual Report Analysis of EMAMI PAPER MILLS