ESAB INDIA 2020-21 Annual Report Analysis

Wed, 31 Mar

ESAB INDIA 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.

ESAB INDIA Income Statement Analysis

• Operating income during the year fell 2.4% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 14.8% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 12.2% in FY21 as against 13.9% in FY20.
• Depreciation charges decreased by 6.9% and finance costs increased by 105.9% YoY, respectively.
• Other income declined by 17.2% YoY.
• Net profit for the year declined by 17.0% YoY.
• Net profit margins during the year declined from 10.2% in FY20 to 8.7% in FY21.

ESAB INDIA Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	6,980	6,812	-2.4%
Other income	Rs m	135	112	-17.2%
Total Revenues	Rs m	7,115	6,923	-2.7%
Gross profit	Rs m	972	828	-14.8%
Depreciation	Rs m	126	117	-6.9%
Interest	Rs m	9	18	105.9%
Profit before tax	Rs m	972	805	-17.2%
Tax	Rs m	258	212	-17.8%
Profit after tax	Rs m	714	593	-17.0%
Gross profit margin	%	13.9	12.2
Effective tax rate	%	26.6	26.4
Net profit margin	%	10.2	8.7

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ESAB INDIA Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 1 billion as compared to Rs 1 billion in FY20, thereby witnessing an increase of 7.6%.
• Current assets fell 19% and stood at Rs 3 billion, while fixed assets fell 2% and stood at Rs 956 million in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 4 billion as against Rs 5 billion during FY20, thereby witnessing a fall of 15%.

ESAB INDIA Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	3,378	2,592	-23.3
Current Liabilities	Rs m	1,134	1,221	7.6
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	4,568	3,867	-15.3
Current assets	Rs m	3,592	2,912	-18.9
Fixed Assets	Rs m	976	956	-2.1
Total Assets	Rs m	4,568	3,867	-15.3

ESAB INDIA Cash Flow Statement Analysis

• ESAB INDIA's cash flow from operating activities (CFO) during FY21 stood at Rs 724 million, an improvement of 26.6% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs 836 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -2 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -1 million from the Rs -244 million net cash flows seen during FY20.

ESAB INDIA 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	572	724	26.6%
Cash Flow from Investing Activities	Rs m	-1,201	836	-
Cash Flow from Financing Activities	Rs m	385	-1,561	-
Net Cash Flow	Rs m	-244	-1	-

Current Valuations for ESAB INDIA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 38.5, an decline from the EPS of Rs 46.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,794.5, stands at 46.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 10.7 times, while the price to sales ratio stands at 4.1 times.
• The company's price to cash flow (P/CF) ratio stood at 32.8 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	453.5	442.6
TTM Earnings per share	Rs	46.4	38.5
Diluted earnings per share	Rs	46.4	38.5
Price to Cash Flow	x	19.7	32.8
TTM P/E ratio	x	23.2	46.6
Price / Book Value ratio	x	5.8	9.0
Market Cap	Rs m	19,604	23,298
Dividends per share (Unadj.)	Rs	70.0	44.0

Ratio Analysis for ESAB INDIA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.4x during FY21, from 3.2x 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 47.0x during FY21, from 115.4x 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 improved and stood at 22.9% during FY21, from 21.1% 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 31.7% during FY21, from 29.0% 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 declined and down at 15.8% during FY21, from 15.8% 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	3.2	2.4
Debtors’ Days	Days	442	530
Interest coverage	x	115.4	47.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	15.8	15.8
Return on equity	%	21.1	22.9
Return on capital employed	%	29.0	31.7

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

ESAB INDIA Share Price Performance

Over the last one year, ESAB INDIA share price has moved up from Rs 1,074.7 to Rs 1,794.5, registering a gain of Rs 719.8 or around 67.0%.

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 ESAB INDIA and quarterly results for ESAB INDIA)

Read: Latest Annual Report Analysis of ESAB INDIA