MAHINDRA EPC IRRIGATION 2020-21 Annual Report Analysis

Wed, 31 Mar

MAHINDRA EPC IRRIGATION 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.

MAHINDRA EPC IRRIGATION Income Statement Analysis

• Operating income during the year fell 10.5% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 29.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 10.2% in FY21 as against 13.0% in FY20.
• Depreciation charges decreased by 18.7% and finance costs decreased by 67.0% YoY, respectively.
• Other income grew by 132.6% YoY.
• Net profit for the year declined by 17.6% YoY.
• Net profit margins during the year declined from 8.2% in FY20 to 7.6% in FY21.

MAHINDRA EPC IRRIGATION Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	2,840	2,542	-10.5%
Other income	Rs m	13	31	132.6%
Total Revenues	Rs m	2,853	2,573	-9.8%
Gross profit	Rs m	369	260	-29.5%
Depreciation	Rs m	38	31	-18.7%
Interest	Rs m	20	7	-67.0%
Profit before tax	Rs m	324	253	-21.9%
Tax	Rs m	91	61	-32.9%
Profit after tax	Rs m	233	192	-17.6%
Gross profit margin	%	13.0	10.2
Effective tax rate	%	28.1	24.2
Net profit margin	%	8.2	7.6

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MAHINDRA EPC IRRIGATION Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 811 million as compared to Rs 929 million in FY20, thereby witnessing an decrease of -12.7%.
• Current assets rose 4% and stood at Rs 2 billion, while fixed assets fell 5% and stood at Rs 643 million in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 3 billion as against Rs 3 billion during FY20, thereby witnessing a growth of 1%.

MAHINDRA EPC IRRIGATION Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	1,693	1,854	9.5
Current Liabilities	Rs m	929	811	-12.7
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	2,582	2,618	1.4
Current assets	Rs m	1,905	1,975	3.7
Fixed Assets	Rs m	678	643	-5.1
Total Assets	Rs m	2,582	2,618	1.4

MAHINDRA EPC IRRIGATION Cash Flow Statement Analysis

• MAHINDRA EPC IRRIGATION's cash flow from operating activities (CFO) during FY21 stood at Rs 110 million, an improvement of 14.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -11 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -166 million on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -67 million from the Rs 107 million net cash flows seen during FY20.

MAHINDRA EPC IRRIGATION 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	96	110	14.2%
Cash Flow from Investing Activities	Rs m	-21	-11	-
Cash Flow from Financing Activities	Rs m	32	-166	-
Net Cash Flow	Rs m	107	-67	-

Current Valuations for MAHINDRA EPC IRRIGATION

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 6.9, an decline from the EPS of Rs 8.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 143.1, stands at 20.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.2 times, while the price to sales ratio stands at 1.6 times.
• The company's price to cash flow (P/CF) ratio stood at 16.8 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	102.2	91.3
TTM Earnings per share	Rs	8.4	6.9
Diluted earnings per share	Rs	8.4	6.9
Price to Cash Flow	x	7.6	16.8
TTM P/E ratio	x	8.9	20.8
Price / Book Value ratio	x	2.0	2.0
Market Cap	Rs m	3,334	3,753
Dividends per share (Unadj.)	Rs	1.2	1.2

Ratio Analysis for MAHINDRA EPC IRRIGATION

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.4x during FY21, from 2.1x 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 39.7x during FY21, from 17.4x 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 10.4% during FY21, from 13.8% 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 declined and down at 14.0% during FY21, from 20.3% 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 7.6% during FY21, from 9.8% 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	2.1	2.4
Debtors’ Days	Days	1,654	2,004
Interest coverage	x	17.4	39.7
Debt to equity ratio	x	0.0	0.0
Return on assets	%	9.8	7.6
Return on equity	%	13.8	10.4
Return on capital employed	%	20.3	14.0

To see how MAHINDRA EPC IRRIGATION has performed over the last 5 years, please visit here.

MAHINDRA EPC IRRIGATION Share Price Performance

Over the last one year, MAHINDRA EPC IRRIGATION share price has moved up from Rs 74.2 to Rs 143.1, registering a gain of Rs 68.9 or around 92.9%.

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 MAHINDRA EPC IRRIGATION and quarterly results for MAHINDRA EPC IRRIGATION)

Read: Latest Annual Report Analysis of MAHINDRA EPC IRRIGATION