FORBES & CO.. 2020-21 Annual Report Analysis

Wed, 31 Mar

FORBES & CO.. 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.

FORBES & CO.. Income Statement Analysis

• Operating income during the year rose 4.6% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 115.1% YoY during the fiscal. Operating profit margins witnessed a fall and down at 2.1% in FY21 as against 14.2% in FY20.
• Depreciation charges decreased by 0.9% and finance costs decreased by 14.3% YoY, respectively.
• Other income declined by 66.7% YoY.
• Net profit for the year declined by 63.7% YoY.
• Net profit margins during the year grew from 12.6% in FY20 to 4.4% in FY21.

FORBES & CO.. Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	27,308	28,568	4.6%
Other income	Rs m	2,414	805	-66.7%
Total Revenues	Rs m	29,721	29,373	-1.2%
Gross profit	Rs m	-3,890	588	-115.1%
Depreciation	Rs m	981	972	-0.9%
Interest	Rs m	1,014	868	-14.3%
Profit before tax	Rs m	-3,471	-448	-87.1%
Tax	Rs m	-25	801	-3,318.3%
Profit after tax	Rs m	-3,446	-1,249	-63.7%
Gross profit margin	%	-14.2	2.1
Effective tax rate	%	0.7	-178.9
Net profit margin	%	-12.6	-4.4

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FORBES & CO.. Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 17 billion as compared to Rs 22 billion in FY20, thereby witnessing an decrease of -21.3%.
• Long-term debt down at Rs 2 billion as compared to Rs 3 billion during FY20, a fall of 28.8%.
• Current assets fell 21% and stood at Rs 11 billion, while fixed assets fell 28% and stood at Rs 10 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 20 billion as against Rs 27 billion during FY20, thereby witnessing a fall of 25%.

FORBES & CO.. Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	-881	-1,410	60.0
Current Liabilities	Rs m	21,826	17,176	-21.3
Long-term Debt	Rs m	3,438	2,446	-28.8
Total Liabilities	Rs m	26,700	20,090	-24.8
Current assets	Rs m	13,441	10,576	-21.3
Fixed Assets	Rs m	13,259	9,514	-28.2
Total Assets	Rs m	26,700	20,090	-24.8

FORBES & CO.. Cash Flow Statement Analysis

• FORBES & CO..'s cash flow from operating activities (CFO) during FY21 stood at Rs 4 billion, an improvement of 59.5% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs 771 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 491 million from the Rs -360 million net cash flows seen during FY20.

FORBES & CO.. 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	2,294	3,659	59.5%
Cash Flow from Investing Activities	Rs m	-1,431	771	-
Cash Flow from Financing Activities	Rs m	-1,223	-3,817	-
Net Cash Flow	Rs m	-360	491	-

Current Valuations for FORBES & CO..

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -96.9, an improvement from the EPS of Rs -267.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,724.6, stands at -19.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at -15.8 times, while the price to sales ratio stands at 0.8 times.
• The company's price to cash flow (P/CF) ratio stood at -64.8 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	2,116.9	2,214.6
TTM Earnings per share	Rs	-267.1	-96.9
Diluted earnings per share	Rs	-267.2	-96.9
Price to Cash Flow	x	-4.0	-64.8
TTM P/E ratio	x	-2.9	-19.1
Price / Book Value ratio	x	-23.4	-12.7
Market Cap	Rs m	20,586	17,941
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for FORBES & CO..

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.6x during FY21, from 0.6x 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 0.5x during FY21, from -2.4x 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 88.6% during FY21, from 390.9% 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 40.6% during FY21, from -96.1% 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 -1.9% during FY21, from -9.1% 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	0.6	0.6
Debtors’ Days	Days	544	408
Interest coverage	x	-2.4	0.5
Debt to equity ratio	x	-3.9	-1.7
Return on assets	%	-9.1	-1.9
Return on equity	%	390.9	88.6
Return on capital employed	%	-96.1	40.6

To see how FORBES & CO.. has performed over the last 5 years, please visit here.

FORBES & CO.. Share Price Performance

Over the last one year, FORBES & CO.. share price has moved up from Rs 769.1 to Rs 1,724.6, registering a gain of Rs 955.5 or around 124.2%.

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 FORBES & CO.. and quarterly results for FORBES & CO..)

Read: Latest Annual Report Analysis of FORBES & CO..