ENGINEERS INDIA 2021-22 Annual Report Analysis

Tue, 6 Sep

ENGINEERS INDIA 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.

ENGINEERS INDIA Income Statement Analysis

• Operating income during the year fell 7.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 64.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 11.1% in FY22 as against 6.3% in FY21.
• Depreciation charges decreased by 0.1% and finance costs decreased by 52.3% YoY, respectively.
• Other income declined by 19.7% YoY.
• Net profit for the year grew by 31.1% YoY.
• Net profit margins during the year grew from 8.3% in FY21 to 11.8% in FY22.

ENGINEERS INDIA Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	31,443	29,120	-7.4%
Other income	Rs m	1,890	1,517	-19.7%
Total Revenues	Rs m	33,333	30,637	-8.1%
Gross profit	Rs m	1,968	3,242	64.8%
Depreciation	Rs m	237	236	-0.1%
Interest	Rs m	58	28	-52.3%
Profit before tax	Rs m	3,563	4,495	26.1%
Tax	Rs m	949	1,066	12.3%
Profit after tax	Rs m	2,615	3,429	31.1%
Gross profit margin	%	6.3	11.1
Effective tax rate	%	26.6	23.7
Net profit margin	%	8.3	11.8

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ENGINEERS INDIA Balance Sheet Analysis

• The company's current liabilities during FY22 down at Rs 24 billion as compared to Rs 28 billion in FY21, thereby witnessing an decrease of -14.8%.
• Current assets fell 11% and stood at Rs 24 billion, while fixed assets fell 11% and stood at Rs 19 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 44 billion as against Rs 49 billion during FY21, thereby witnessing a fall of 11%.

ENGINEERS INDIA Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	17,507	17,700	1.1
Current Liabilities	Rs m	28,121	23,963	-14.8
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	48,957	43,500	-11.1
Current assets	Rs m	27,388	24,339	-11.1
Fixed Assets	Rs m	21,568	19,162	-11.2
Total Assets	Rs m	48,957	43,500	-11.1

ENGINEERS INDIA Cash Flow Statement Analysis

• ENGINEERS INDIA's cash flow from operating activities (CFO) during FY22 stood at Rs 483 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs 613 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -1 billion, an improvement of 84% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -392 million from the Rs 433 million net cash flows seen during FY21.

ENGINEERS INDIA 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	1,714	483	-71.8%
Cash Flow from Investing Activities	Rs m	7,756	613	-92.1%
Cash Flow from Financing Activities	Rs m	-9,037	-1,488	-
Net Cash Flow	Rs m	433	-392	-

Current Valuations for ENGINEERS INDIA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 6.1, an improvement from the EPS of Rs 4.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 72.0, stands at 13.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.3 times, while the price to sales ratio stands at 1.4 times.
• The company's price to cash flow (P/CF) ratio stood at 11.3 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	55.9	51.8
TTM Earnings per share	Rs	4.7	6.1
Diluted earnings per share	Rs	4.7	6.1
Price to Cash Flow	x	15.2	11.3
TTM P/E ratio	x	16.6	13.4
Price / Book Value ratio	x	2.4	2.3
Market Cap	Rs m	42,490	41,451
Dividends per share (Unadj.)	Rs	2.0	3.0

Ratio Analysis for ENGINEERS INDIA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.0x during FY22, from 1.0x 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 164.4x during FY22, from 62.8x 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 19.4% during FY22, from 14.9% 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 25.5% during FY22, from 20.7% 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 7.9% during FY22, from 5.5% 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	1.0	1.0
Debtors’ Days	Days	618	484
Interest coverage	x	62.8	164.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	5.5	7.9
Return on equity	%	14.9	19.4
Return on capital employed	%	20.7	25.5

To see how ENGINEERS INDIA has performed over the last 5 years, please visit here.

ENGINEERS INDIA Share Price Performance

Over the last one year, ENGINEERS INDIA share price has moved down from Rs 73.0 to Rs 72.0, registering a loss of Rs 1.0 or around 1.4%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 33,178.3 (up 0.0%). Over the last one year it has moved up from 25,625.5 to 33,178.3, a gain of 7,553 points (up 29.5%).

Overall, the S&P BSE SENSEX is up 2.3% over the year.

(To know more, check out historical annual results for ENGINEERS INDIA and quarterly results for ENGINEERS INDIA)

Read: Latest Annual Report Analysis of ENGINEERS INDIA