AMBUJA CEMENT 2019-20 Annual Report Analysis

Thu, 31 Dec

AMBUJA CEMENT has announced its results for the year ended December 2020. Let us have a look at the detailed performance review of the company during FY19-20.

AMBUJA CEMENT Income Statement Analysis

• Operating income during the year fell 9.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 5.1% YoY during the fiscal. Operating profit margins witnessed a fall and down at 19.7% in CY20 as against 17.0% in CY19.
• Depreciation charges increased by 0.8% and finance costs decreased by 17.5% YoY, respectively.
• Other income declined by 22.6% YoY.
• Net profit for the year grew by 11.9% YoY.
• Net profit margins during the year grew from 10.2% in CY19 to 12.6% in CY20.

AMBUJA CEMENT Income Statement 2019-20

No. of Mths Year Ending		12 Dec-19*	12 Dec-20*	% Change
Net Sales	Rs m	271,036	245,162	-9.5%
Other income	Rs m	5,807	4,496	-22.6%
Total Revenues	Rs m	276,843	249,658	-9.8%
Gross profit	Rs m	45,970	48,296	5.1%
Depreciation	Rs m	11,525	11,618	0.8%
Interest	Rs m	1,699	1,402	-17.5%
Profit before tax	Rs m	38,553	39,772	3.2%
Tax	Rs m	10,922	8,848	-19.0%
Profit after tax	Rs m	27,632	30,924	11.9%
Gross profit margin	%	17.0	19.7
Effective tax rate	%	28.3	22.2
Net profit margin	%	10.2	12.6

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AMBUJA CEMENT Balance Sheet Analysis

• The company's current liabilities during CY20 stood at Rs 93 billion as compared to Rs 91 billion in CY19, thereby witnessing an increase of 2.1%.
• Long-term debt stood at Rs 436 million as compared to Rs 353 million during CY19, a growth of 23.6%.
• Current assets fell 11% and stood at Rs 128 billion, while fixed assets rose 4% and stood at Rs 269 billion in CY20.
• Overall, the total assets and liabilities for CY20 stood at Rs 397 billion as against Rs 402 billion during CY19, thereby witnessing a fall of 1%.

AMBUJA CEMENT Balance Sheet as on December 2020

No. of Mths Year Ending		12 Dec-19*	12 Dec-20*	% Change
Networth	Rs m	240,780	227,576	-5.5
Current Liabilities	Rs m	90,703	92,604	2.1
Long-term Debt	Rs m	353	436	23.6
Total Liabilities	Rs m	401,782	397,178	-1.1
Current assets	Rs m	143,190	128,048	-10.6
Fixed Assets	Rs m	258,592	269,130	4.1
Total Assets	Rs m	401,782	397,178	-1.1

AMBUJA CEMENT Cash Flow Statement Analysis

• AMBUJA CEMENT's cash flow from operating activities (CFO) during CY20 stood at Rs 48 billion, an improvement of 2.0% on a YoY basis.
• Cash flow from investing activities (CFI) during CY20 stood at Rs -13 billion, an improvement of 10.4% on a YoY basis.
• Cash flow from financial activities (CFF) during CY20 stood at Rs -40 billion on a YoY basis.
• Overall, net cash flows for the company during CY20 stood at Rs -4 billion from the Rs 29 billion net cash flows seen during CY19.

AMBUJA CEMENT Cash Flow Statement 2019-20

Particulars	No. of months	12	12	% Change
	Year Ending	Dec-19	Dec-20
Cash Flow from Operating Activities	Rs m	47,387	48,323	2.0%
Cash Flow from Investing Activities	Rs m	-11,929	-13,173	-
Cash Flow from Financing Activities	Rs m	-6,294	-39,562	-
Net Cash Flow	Rs m	29,188	-4,412	-

Current Valuations for AMBUJA CEMENT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 15.6, an improvement from the EPS of Rs 13.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 248.9, stands at 16.0 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 2.0 times.
• The company's price to cash flow (P/CF) ratio stood at 9.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Dec-19*	12 Dec-20*
Sales per share (Unadj.)	Rs	136.5	123.5
TTM Earnings per share	Rs	13.9	15.6
Diluted earnings per share	Rs	13.9	15.6
Price to Cash Flow	x	10.0	9.5
TTM P/E ratio	x	14.1	16.0
Price / Book Value ratio	x	1.8	1.8
Market Cap	Rs m	425,077	405,667
Dividends per share (Unadj.)	Rs	1.5	18.0

Ratio Analysis for AMBUJA CEMENT

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.4x during CY20, from 1.6x during CY19. 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 29.4x during CY20, from 23.7x during CY19. 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 13.6% during CY20, from 11.5% during CY20. 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 18.1% during CY20, from 16.7% during CY19. 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 8.1% during CY20, from 7.3% during CY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Dec-19*	12 Dec-20*
Current ratio	x	1.6	1.4
Debtors’ Days	Days	1	1
Interest coverage	x	23.7	29.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	7.3	8.1
Return on equity	%	11.5	13.6
Return on capital employed	%	16.7	18.1

To see how AMBUJA CEMENT has performed over the last 5 years, please visit here.

AMBUJA CEMENT Share Price Performance

Over the last one year, AMBUJA CEMENT share price has moved down from Rs 235.1 to Rs 155.7, registering a loss of Rs 79.4 or around 33.8%.

Overall, the S&P BSE SENSEX is down 24.2% over the year.

(To know more, check out historical annual results for AMBUJA CEMENT and quarterly results for AMBUJA CEMENT)

Read: Latest Annual Report Analysis of AMBUJA CEMENT