GRINDWELL NORTON 2020-21 Annual Report Analysis

Wed, 31 Mar

GRINDWELL NORTON 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.

GRINDWELL NORTON Income Statement Analysis

• Operating income during the year rose 3.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 19.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 19.2% in FY21 as against 16.7% in FY20.
• Depreciation charges decreased by 5.9% and finance costs decreased by 23.5% YoY, respectively.
• Other income grew by 47.9% YoY.
• Net profit for the year grew by 29.3% YoY.
• Net profit margins during the year grew from 11.6% in FY20 to 14.5% in FY21.

GRINDWELL NORTON Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	15,796	16,379	3.7%
Other income	Rs m	404	598	47.9%
Total Revenues	Rs m	16,200	16,978	4.8%
Gross profit	Rs m	2,644	3,151	19.2%
Depreciation	Rs m	578	544	-5.9%
Interest	Rs m	45	34	-23.5%
Profit before tax	Rs m	2,426	3,172	30.7%
Tax	Rs m	587	795	35.3%
Profit after tax	Rs m	1,839	2,377	29.3%
Gross profit margin	%	16.7	19.2
Effective tax rate	%	24.2	25.1
Net profit margin	%	11.6	14.5

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GRINDWELL NORTON Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 4 billion as compared to Rs 3 billion in FY20, thereby witnessing an increase of 27.2%.
• Current assets rose 26% and stood at Rs 12 billion, while fixed assets rose 2% and stood at Rs 6 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 19 billion as against Rs 16 billion during FY20, thereby witnessing a growth of 17%.

GRINDWELL NORTON Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	11,803	13,560	14.9
Current Liabilities	Rs m	3,423	4,355	27.2
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	15,917	18,621	17.0
Current assets	Rs m	9,889	12,469	26.1
Fixed Assets	Rs m	6,029	6,152	2.0
Total Assets	Rs m	15,917	18,621	17.0

GRINDWELL NORTON Cash Flow Statement Analysis

• GRINDWELL NORTON's cash flow from operating activities (CFO) during FY21 stood at Rs 3 billion, an improvement of 4.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -2 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -950 million, an improvement of 0% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 67 million from the Rs -2 billion net cash flows seen during FY20.

GRINDWELL NORTON 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	3,176	3,313	4.3%
Cash Flow from Investing Activities	Rs m	-4,421	-2,296	-
Cash Flow from Financing Activities	Rs m	-951	-950	-
Net Cash Flow	Rs m	-2,195	67	-

Current Valuations for GRINDWELL NORTON

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 21.5, an improvement from the EPS of Rs 16.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 952.4, stands at 44.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 7.8 times, while the price to sales ratio stands at 6.4 times.
• The company's price to cash flow (P/CF) ratio stood at 26.9 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	142.7	147.9
TTM Earnings per share	Rs	16.6	21.5
Diluted earnings per share	Rs	16.6	21.5
Price to Cash Flow	x	21.0	26.9
TTM P/E ratio	x	27.7	44.3
Price / Book Value ratio	x	5.0	5.8
Market Cap	Rs m	59,136	78,689
Dividends per share (Unadj.)	Rs	7.5	9.5

Ratio Analysis for GRINDWELL NORTON

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.9x during FY21, from 2.9x 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 93.8x during FY21, from 55.3x 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 improved and stood at 17.5% during FY21, from 15.6% 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 23.6% during FY21, from 20.9% 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 13.0% during FY21, from 11.8% 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	2.9	2.9
Debtors’ Days	Days	474	450
Interest coverage	x	55.3	93.8
Debt to equity ratio	x	0.0	0.0
Return on assets	%	11.8	13.0
Return on equity	%	15.6	17.5
Return on capital employed	%	20.9	23.6

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

GRINDWELL NORTON Share Price Performance

Over the last one year, GRINDWELL NORTON share price has moved up from Rs 459.4 to Rs 952.4, registering a gain of Rs 493.0 or around 107.3%.

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 GRINDWELL NORTON and quarterly results for GRINDWELL NORTON)

Read: Latest Annual Report Analysis of GRINDWELL NORTON