GHCL 2020-21 Annual Report Analysis

Wed, 31 Mar

GHCL 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.

GHCL Income Statement Analysis

• Operating income during the year fell 12.3% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 12.6% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 21.9% in FY21 as against 22.0% in FY20.
• Depreciation charges increased by 1.7% and finance costs decreased by 23.9% YoY, respectively.
• Other income grew by 53.6% YoY.
• Net profit for the year declined by 17.8% YoY.
• Net profit margins during the year declined from 12.0% in FY20 to 11.2% in FY21.

GHCL Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	33,051	29,001	-12.3%
Other income	Rs m	176	270	53.6%
Total Revenues	Rs m	33,227	29,271	-11.9%
Gross profit	Rs m	7,280	6,361	-12.6%
Depreciation	Rs m	1,312	1,334	1.7%
Interest	Rs m	1,198	912	-23.9%
Profit before tax	Rs m	4,946	4,386	-11.3%
Tax	Rs m	980	1,125	14.8%
Profit after tax	Rs m	3,966	3,261	-17.8%
Gross profit margin	%	22.0	21.9
Effective tax rate	%	19.8	25.6
Net profit margin	%	12.0	11.2

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GHCL Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 8 billion as compared to Rs 11 billion in FY20, thereby witnessing an decrease of -29.8%.
• Long-term debt down at Rs 6 billion as compared to Rs 8 billion during FY20, a fall of 30.2%.
• Current assets fell 14% and stood at Rs 12 billion, while fixed assets fell 1% and stood at Rs 29 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 41 billion as against Rs 43 billion during FY20, thereby witnessing a fall of 5%.

GHCL Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	21,391	24,728	15.6
Current Liabilities	Rs m	10,819	7,596	-29.8
Long-term Debt	Rs m	8,079	5,638	-30.2
Total Liabilities	Rs m	43,129	40,849	-5.3
Current assets	Rs m	14,269	12,220	-14.4
Fixed Assets	Rs m	28,861	28,629	-0.8
Total Assets	Rs m	43,129	40,849	-5.3

GHCL Cash Flow Statement Analysis

• GHCL's cash flow from operating activities (CFO) during FY21 stood at Rs 6 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -1 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -6 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -568 million from the Rs 796 million net cash flows seen during FY20.

GHCL 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	6,244	6,210	-0.5%
Cash Flow from Investing Activities	Rs m	-2,055	-1,088	-
Cash Flow from Financing Activities	Rs m	-3,393	-5,690	-
Net Cash Flow	Rs m	796	-568	-

Current Valuations for GHCL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 34.3, an decline from the EPS of Rs 41.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 230.3, stands at 7.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.9 times, while the price to sales ratio stands at 0.8 times.
• The company's price to cash flow (P/CF) ratio stood at 3.6 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	347.9	305.2
TTM Earnings per share	Rs	41.7	34.3
Diluted earnings per share	Rs	41.6	34.2
Price to Cash Flow	x	1.6	3.6
TTM P/E ratio	x	2.1	7.2
Price / Book Value ratio	x	0.8	0.7
Market Cap	Rs m	16,437	16,473
Dividends per share (Unadj.)	Rs	3.0	5.5

Ratio Analysis for GHCL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.6x during FY21, from 1.3x 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 5.8x during FY21, from 5.1x 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 13.2% during FY21, from 18.5% 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 17.4% during FY21, from 20.8% 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 10.2% during FY21, from 12.0% 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	1.3	1.6
Debtors’ Days	Days	3	3
Interest coverage	x	5.1	5.8
Debt to equity ratio	x	0.4	0.2
Return on assets	%	12.0	10.2
Return on equity	%	18.5	13.2
Return on capital employed	%	20.8	17.4

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

GHCL Share Price Performance

Over the last one year, GHCL share price has moved up from Rs 88.8 to Rs 230.3, registering a gain of Rs 141.5 or around 159.4%.

Overall, the S&P BSE SENSEX is up 74.1% over the year.

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

Read: Latest Annual Report Analysis of GHCL