GHCL 2020-21 Annual Report Analysis

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GHCL 2020-21 Annual Report Analysis
Tue, 26 Oct

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 11.9% in FY20 to 11.1% 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 % 11.9 11.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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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
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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 428.1, stands at 9.8 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 0.7 times, while the price to sales ratio stands at 0.6 times.
  • The company's price to cash flow (P/CF) ratio stood at 8.9 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 41.7 34.3
Price to Cash Flow x 7.7 8.9
TTM P/E ratio x 9.8 9.8
Price / Book Value ratio x 0.8 0.7
Market Cap Rs m 40,670 40,670
Dividends per share (Unadj.) Rs 3.0 5.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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 163.0 to Rs 428.1, registering a gain of Rs 265.1 or around 162.7%.

Overall, the S&P BSE SENSEX is up 51.0% over the year.

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

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Related Views on News

GHCL Announces Quarterly Results (4QFY20); Net Profit Down 32.6% (Quarterly Result Update)

May 21, 2020 | Updated on May 21, 2020

For the quarter ended March 2020, GHCL has posted a net profit of Rs 799 m (down 32.6% YoY). Sales on the other hand came in at Rs 7 bn (down 19.5% YoY). Read on for a complete analysis of GHCL's quarterly results.

GHCL Announces Quarterly Results (3QFY20); Net Profit Down 1.4% (Quarterly Result Update)

Jan 27, 2020 | Updated on Jan 27, 2020

For the quarter ended December 2019, GHCL has posted a net profit of Rs 1 bn (down 1.4% YoY). Sales on the other hand came in at Rs 8 bn (down 4.1% YoY). Read on for a complete analysis of GHCL's quarterly results.

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