ICRA 2019-20 Annual Report Analysis

Tue, 31 Mar

ICRA 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.

ICRA Income Statement Analysis

• Operating income during the year fell 2.1% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 15.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 29.8% in FY20 as against 34.4% in FY19.
• Depreciation charges increased by 83.0% and finance costs increased by 2626.7% YoY, respectively.
• Other income grew by 7.1% YoY.
• Net profit for the year declined by 8.2% YoY.
• Net profit margins during the year declined from 32.3% in FY19 to 30.3% in FY20.

ICRA Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	3,281	3,211	-2.1%
Other income	Rs m	448	480	7.1%
Total Revenues	Rs m	3,729	3,691	-1.0%
Gross profit	Rs m	1,129	958	-15.1%
Depreciation	Rs m	56	103	83.0%
Interest	Rs m	1	20	2,626.7%
Profit before tax	Rs m	1,520	1,315	-13.5%
Tax	Rs m	461	342	-25.7%
Profit after tax	Rs m	1,059	972	-8.2%
Gross profit margin	%	34.4	29.8
Effective tax rate	%	30.3	26.0
Net profit margin	%	32.3	30.3

ICRA Balance Sheet Analysis

• The company's current liabilities during FY20 down at Rs 1 billion as compared to Rs 1 billion in FY19, thereby witnessing an decrease of -3.0%.
• Current assets rose 28% and stood at Rs 7 billion, while fixed assets fell 41% and stood at Rs 1 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 8 billion as against Rs 8 billion during FY19, thereby witnessing a growth of 10%.

ICRA Balance Sheet as on March 2020

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Networth	Rs m	6,409	7,016	9.5
Current Liabilities	Rs m	1,186	1,150	-3.0
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	7,653	8,391	9.6
Current assets	Rs m	5,637	7,202	27.8
Fixed Assets	Rs m	2,016	1,189	-41.0
Total Assets	Rs m	7,653	8,391	9.6

ICRA Cash Flow Statement Analysis

• ICRA's cash flow from operating activities (CFO) during FY20 stood at Rs 213 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY20 stood at Rs 111 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY20 stood at Rs -407 million, an improvement of 66% on a YoY basis.
• Overall, net cash flows for the company during FY20 stood at Rs -82 million from the Rs 46 million net cash flows seen during FY19.

ICRA 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	809	213	-73.6%
Cash Flow from Investing Activities	Rs m	447	111	-75.1%
Cash Flow from Financing Activities	Rs m	-1,209	-407	-
Net Cash Flow	Rs m	46	-82	-

Current Valuations for ICRA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 100.8, an decline from the EPS of Rs 109.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,165.0, stands at 21.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.0 times, while the price to sales ratio stands at 6.5 times.
• The company's price to cash flow (P/CF) ratio stood at 23.8 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	340.0	332.7
TTM Earnings per share	Rs	109.8	100.8
Diluted earnings per share	Rs	109.8	100.8
Price to Cash Flow	x	25.1	23.8
TTM P/E ratio	x	26.8	21.5
Price / Book Value ratio	x	5.1	3.6
Market Cap	Rs m	32,669	25,549
Dividends per share (Unadj.)	Rs	30.0	27.0

Ratio Analysis for ICRA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 6.3x during FY20, from 4.8x 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 65.3x during FY20, from 2,028.2x 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 13.9% during FY20, from 16.5% 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 19.0% during FY20, from 23.7% 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 11.8% during FY20, from 13.9% 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	4.8	6.3
Debtors’ Days	Days	376	650
Interest coverage	x	2,028.2	65.3
Debt to equity ratio	x	0.0	0.0
Return on assets	%	13.9	11.8
Return on equity	%	16.5	13.9
Return on capital employed	%	23.7	19.0

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

ICRA Share Price Performance

Over the last one year, ICRA share price has moved down from Rs 2,901.3 to Rs 2,165.0, registering a loss of Rs 736.3 or around 25.4%.

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

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

Read: Latest Annual Report Analysis of ICRA