GREAVES COTTON 2020-21 Annual Report Analysis

Wed, 31 Mar

GREAVES COTTON 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.

GREAVES COTTON Income Statement Analysis

• Operating income during the year fell 21.5% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 72.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 3.0% in FY21 as against 8.6% in FY20.
• Depreciation charges decreased by 0.8% and finance costs increased by 36.7% YoY, respectively.
• Other income declined by 88.2% YoY.
• Net profit for the year declined by 114.8% YoY.
• Net profit margins during the year declined from 6.7% in FY20 to 1.3% in FY21.

GREAVES COTTON Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	19,110	15,004	-21.5%
Other income	Rs m	709	84	-88.2%
Total Revenues	Rs m	19,818	15,088	-23.9%
Gross profit	Rs m	1,641	452	-72.5%
Depreciation	Rs m	609	604	-0.8%
Interest	Rs m	51	69	36.7%
Profit before tax	Rs m	1,690	-138	-108.2%
Tax	Rs m	417	50	-88.0%
Profit after tax	Rs m	1,273	-188	-114.8%
Gross profit margin	%	8.6	3.0
Effective tax rate	%	24.7	-36.2
Net profit margin	%	6.7	-1.3

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GREAVES COTTON Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 5 billion as compared to Rs 4 billion in FY20, thereby witnessing an increase of 15.7%.
• Current assets rose 1% and stood at Rs 7 billion, while fixed assets rose 4% and stood at Rs 5 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 13 billion as against Rs 12 billion during FY20, thereby witnessing a growth of 2%.

GREAVES COTTON Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	7,984	7,806	-2.2
Current Liabilities	Rs m	4,002	4,630	15.7
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	12,390	12,671	2.3
Current assets	Rs m	7,140	7,232	1.3
Fixed Assets	Rs m	5,250	5,438	3.6
Total Assets	Rs m	12,390	12,671	2.3

GREAVES COTTON Cash Flow Statement Analysis

• GREAVES COTTON's cash flow from operating activities (CFO) during FY21 stood at Rs 1 billion, an improvement of 44.4% 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 -200 million, an improvement of 92% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 193 million from the Rs 1 billion net cash flows seen during FY20.

GREAVES COTTON 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	1,016	1,468	44.4%
Cash Flow from Investing Activities	Rs m	2,550	-1,078	-
Cash Flow from Financing Activities	Rs m	-2,410	-200	-
Net Cash Flow	Rs m	1,157	193	-83.3%

Current Valuations for GREAVES COTTON

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -0.8, an decline from the EPS of Rs 5.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 127.8, stands at -157.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.8 times, while the price to sales ratio stands at 2.0 times.
• The company's price to cash flow (P/CF) ratio stood at 62.2 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	82.7	64.9
TTM Earnings per share	Rs	5.5	-0.8
Diluted earnings per share	Rs	5.5	-0.8
Price to Cash Flow	x	8.6	62.2
TTM P/E ratio	x	12.7	-157.6
Price / Book Value ratio	x	3.3	3.3
Market Cap	Rs m	25,999	25,895
Dividends per share (Unadj.)	Rs	0.0	0.2

Ratio Analysis for GREAVES COTTON

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.6x during FY21, from 1.8x 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 deteriorated and stood at -1.0x during FY21, from 34.3x 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 declined and down at -2.4% during FY21, from 15.9% 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 -0.9% during FY21, from 21.8% 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 -0.9% during FY21, from 10.7% 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	1.8	1.6
Debtors’ Days	Days	5	5
Interest coverage	x	34.3	-1.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	10.7	-0.9
Return on equity	%	15.9	-2.4
Return on capital employed	%	21.8	-0.9

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

GREAVES COTTON Share Price Performance

Over the last one year, GREAVES COTTON share price has moved up from Rs 69.7 to Rs 127.8, registering a gain of Rs 58.2 or around 83.5%.

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 GREAVES COTTON and quarterly results for GREAVES COTTON)

Read: Latest Annual Report Analysis of GREAVES COTTON