GMDC 2019-20 Annual Report Analysis

Tue, 31 Mar

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

GMDC Income Statement Analysis

• Operating income during the year fell 26.7% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 63.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 9.1% in FY20 as against 18.2% in FY19.
• Depreciation charges decreased by 4.7% and finance costs increased by 2.9% YoY, respectively.
• Other income grew by 18.1% YoY.
• Net profit for the year declined by 34.2% YoY.
• Net profit margins during the year declined from 11.7% in FY19 to 10.5% in FY20.

GMDC Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	18,797	13,773	-26.7%
Other income	Rs m	1,445	1,706	18.1%
Total Revenues	Rs m	20,241	15,480	-23.5%
Gross profit	Rs m	3,417	1,256	-63.2%
Depreciation	Rs m	961	916	-4.7%
Interest	Rs m	18	19	2.9%
Profit before tax	Rs m	3,882	2,028	-47.8%
Tax	Rs m	1,685	583	-65.4%
Profit after tax	Rs m	2,197	1,445	-34.2%
Gross profit margin	%	18.2	9.1
Effective tax rate	%	43.4	28.8
Net profit margin	%	11.7	10.5

GMDC Balance Sheet Analysis

• The company's current liabilities during FY20 stood at Rs 3 billion as compared to Rs 2 billion in FY19, thereby witnessing an increase of 20.8%.
• Current assets fell 3% and stood at Rs 15 billion, while fixed assets fell 3% and stood at Rs 36 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 51 billion as against Rs 52 billion during FY19, thereby witnessing a fall of 3%.

GMDC Balance Sheet as on March 2020

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Networth	Rs m	43,173	40,960	-5.1
Current Liabilities	Rs m	2,460	2,972	20.8
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	52,067	50,577	-2.9
Current assets	Rs m	15,039	14,655	-2.6
Fixed Assets	Rs m	37,028	35,922	-3.0
Total Assets	Rs m	52,067	50,577	-2.9

GMDC Cash Flow Statement Analysis

• GMDC's cash flow from operating activities (CFO) during FY20 stood at Rs 9 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY20 stood at Rs 836 million, an improvement of 261.0% on a YoY basis.
• Cash flow from financial activities (CFF) during FY20 stood at Rs -767 million, an improvement of 43% on a YoY basis.
• Overall, net cash flows for the company during FY20 stood at Rs 79 million from the Rs 313 million net cash flows seen during FY19.

GMDC Cash Flow Statement 2019-20

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-19	Mar-20
Cash Flow from Operating Activities	Rs m	1,424	9	-99.4%
Cash Flow from Investing Activities	Rs m	232	836	261.0%
Cash Flow from Financing Activities	Rs m	-1,343	-767	-
Net Cash Flow	Rs m	313	79	-74.9%

Current Valuations for GMDC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 4.5, an decline from the EPS of Rs 6.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 31.4, stands at 5.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.2 times, while the price to sales ratio stands at 0.7 times.
• The company's price to cash flow (P/CF) ratio stood at 7.7 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Sales per share (Unadj.)	Rs	59.1	43.3
TTM Earnings per share	Rs	6.9	4.5
Diluted earnings per share	Rs	6.9	4.5
Price to Cash Flow	x	8.2	7.7
TTM P/E ratio	x	18.7	5.7
Price / Book Value ratio	x	0.8	0.4
Market Cap	Rs m	34,344	18,094
Dividends per share (Unadj.)	Rs	2.0	2.0

Ratio Analysis for GMDC

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 4.9x during FY20, from 6.1x during FY19. 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 108.8x during FY20, from 213.4x during FY19. 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 3.5% during FY20, from 5.1% during FY20. 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 5.0% during FY20, from 9.0% during FY19. 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 2.9% during FY20, from 4.3% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Current ratio	x	6.1	4.9
Debtors’ Days	Days	286	370
Interest coverage	x	213.4	108.8
Debt to equity ratio	x	0.0	0.0
Return on assets	%	4.3	2.9
Return on equity	%	5.1	3.5
Return on capital employed	%	9.0	5.0

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

GMDC Share Price Performance

Over the last one year, GMDC share price has moved down from Rs 81.5 to Rs 31.4, registering a loss of Rs 50.1 or around 61.5%.

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

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

Read: Latest Annual Report Analysis of GMDC