HINDUSTAN ZINC 2020-21 Annual Report Analysis

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HINDUSTAN ZINC 2020-21 Annual Report Analysis
Mon, 6 Sep

HINDUSTAN ZINC 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.

HINDUSTAN ZINC Income Statement Analysis

  • Operating income during the year rose 21.9% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 31.9% YoY during the fiscal. Operating profit margins witnessed a fall and down at 51.6% in FY21 as against 47.7% in FY20.
  • Depreciation charges increased by 11.1% and finance costs increased by 244.6% YoY, respectively.
  • Other income declined by 5.9% YoY.
  • Net profit for the year grew by 17.3% YoY.
  • Net profit margins during the year declined from 33.2% in FY20 to 32.6% in FY21.

HINDUSTAN ZINC Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 185,610 226,290 21.9%
Other income Rs m 19,340 18,190 -5.9%
Total Revenues Rs m 204,950 244,480 19.3%
Gross profit Rs m 88,470 116,720 31.9%
Depreciation Rs m 22,790 25,310 11.1%
Interest Rs m 1,120 3,860 244.6%
Profit before tax Rs m 83,900 105,740 26.0%
Tax Rs m 15,850 25,940 63.7%
Profit after tax Rs m 68,050 79,800 17.3%
Gross profit margin % 47.7 51.6
Effective tax rate % 18.9 24.5
Net profit margin % 33.2 32.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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HINDUSTAN ZINC Balance Sheet Analysis

  • The company's current liabilities during FY21 stood at Rs 79 billion as compared to Rs 54 billion in FY20, thereby witnessing an increase of 45.5%.
  • Long-term debt stood at Rs 43 billion as compared to Rs 0 million during FY20, a fall of 0.0%.
  • Current assets fell 1% and stood at Rs 246 billion, while fixed assets fell 1% and stood at Rs 201 billion in FY21.
  • Overall, the total assets and liabilities for FY21 stood at Rs 447 billion as against Rs 452 billion during FY20, thereby witnessing a fall of 1%.

HINDUSTAN ZINC Balance Sheet as on March 2021

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Networth Rs m 403,100 323,130 -19.8
 
Current Liabilities Rs m 54,130 78,760 45.5
Long-term Debt Rs m 0 43,120 0.0
Total Liabilities Rs m 451,530 446,690 -1.1
 
Current assets Rs m 248,130 245,680 -1.0
Fixed Assets Rs m 203,400 201,010 -1.2
Total Assets Rs m 451,530 446,690 -1.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



HINDUSTAN ZINC Cash Flow Statement Analysis

  • HINDUSTAN ZINC's cash flow from operating activities (CFO) during FY21 stood at Rs 106 billion, an improvement of 59.6% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY21 stood at Rs -24 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY21 stood at Rs -97 billion on a YoY basis.
  • Overall, net cash flows for the company during FY21 stood at Rs -16 billion from the Rs 19 billion net cash flows seen during FY20.

HINDUSTAN ZINC 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 66,210 105,670 59.6%
Cash Flow from Investing Activities Rs m -26,480 -24,350 -
Cash Flow from Financing Activities Rs m -20,980 -96,970 -
Net Cash Flow Rs m 18,750 -15,650 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for HINDUSTAN ZINC

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 18.9, an improvement from the EPS of Rs 16.1 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 327.7, stands at 16.1 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 3.2 times, while the price to sales ratio stands at 4.5 times.
  • The company's price to cash flow (P/CF) ratio stood at 13.2 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 43.9 53.6
TTM Earnings per share Rs 16.1 18.9
Diluted earnings per share Rs 16.1 18.9
Price to Cash Flow x 15.2 13.2
TTM P/E ratio x 16.1 16.1
Price / Book Value ratio x 2.2 3.2
Market Cap Rs m 1,384,637 1,384,637
Dividends per share (Unadj.) Rs 16.5 21.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for HINDUSTAN ZINC

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 3.1x during FY21, from 4.6x 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 28.4x during FY21, from 75.9x 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 24.7% during FY21, from 16.9% 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 improved and stood at 29.9% during FY21, from 21.1% 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 18.7% during FY21, from 15.3% 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 4.6 3.1
Debtors’ Days Days 1 1
Interest coverage x 75.9 28.4
Debt to equity ratio x 0.0 0.1
Return on assets % 15.3 18.7
Return on equity % 16.9 24.7
Return on capital employed % 21.1 29.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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

HINDUSTAN ZINC Share Price Performance

Over the last one year, HINDUSTAN ZINC share price has moved up from Rs 221.8 to Rs 327.7, registering a gain of Rs 105.9 or around 47.7%.

Overall, the S&P BSE SENSEX is up 49.2% over the year.

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

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Related Views on News

HINDUSTAN ZINC Announces Quarterly Results (1QFY22); Net Profit Up 45.9% (Quarterly Result Update)

Jul 26, 2021 | Updated on Jul 26, 2021

For the quarter ended June 2021, HINDUSTAN ZINC has posted a net profit of Rs 20 bn (up 45.9% YoY). Sales on the other hand came in at Rs 65 bn (up 63.7% YoY). Read on for a complete analysis of HINDUSTAN ZINC's quarterly results.

HINDUSTAN ZINC Announces Quarterly Results (3QFY21); Net Profit Up 35.8% (Quarterly Result Update)

Jan 21, 2021 | Updated on Jan 21, 2021

For the quarter ended December 2020, HINDUSTAN ZINC has posted a net profit of Rs 22 bn (up 35.8% YoY). Sales on the other hand came in at Rs 60 bn (up 29.1% YoY). Read on for a complete analysis of HINDUSTAN ZINC's quarterly results.

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