JK TYRE & IND 2020-21 Annual Report Analysis

Wed, 31 Mar

JK TYRE & IND 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.

JK TYRE & IND Income Statement Analysis

• Operating income during the year rose 4.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 52.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 14.8% in FY21 as against 10.1% in FY20.
• Depreciation charges increased by 2.3% and finance costs decreased by 15.1% YoY, respectively.
• Other income grew by 40.8% YoY.
• Net profit for the year grew by 123.8% YoY.
• Net profit margins during the year grew from 1.7% in FY20 to 3.7% in FY21.

JK TYRE & IND Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	87,227	91,022	4.4%
Other income	Rs m	306	431	40.8%
Total Revenues	Rs m	87,533	91,453	4.5%
Gross profit	Rs m	8,795	13,438	52.8%
Depreciation	Rs m	3,778	3,867	2.3%
Interest	Rs m	5,490	4,659	-15.1%
Profit before tax	Rs m	-168	5,344	-3,286.3%
Tax	Rs m	-1,658	2,009	-221.2%
Profit after tax	Rs m	1,490	3,334	123.8%
Gross profit margin	%	10.1	14.8
Effective tax rate	%	988.6	37.6
Net profit margin	%	1.7	3.7

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JK TYRE & IND Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 42 billion as compared to Rs 47 billion in FY20, thereby witnessing an decrease of -11.9%.
• Long-term debt down at Rs 29 billion as compared to Rs 32 billion during FY20, a fall of 9.2%.
• Current assets fell 3% and stood at Rs 41 billion, while fixed assets fell 2% and stood at Rs 68 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 109 billion as against Rs 112 billion during FY20, thereby witnessing a fall of 2%.

JK TYRE & IND Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	23,314	26,727	14.6
Current Liabilities	Rs m	47,339	41,687	-11.9
Long-term Debt	Rs m	31,504	28,607	-9.2
Total Liabilities	Rs m	112,132	109,404	-2.4
Current assets	Rs m	42,053	40,920	-2.7
Fixed Assets	Rs m	69,931	68,362	-2.2
Total Assets	Rs m	112,132	109,404	-2.4

JK TYRE & IND Cash Flow Statement Analysis

• JK TYRE & IND's cash flow from operating activities (CFO) during FY21 stood at Rs 16 billion, an improvement of 29.2% 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 -14 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 233 million from the Rs -439 million net cash flows seen during FY20.

JK TYRE & IND 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	12,374	15,984	29.2%
Cash Flow from Investing Activities	Rs m	-3,176	-1,379	-
Cash Flow from Financing Activities	Rs m	-9,626	-14,408	-
Net Cash Flow	Rs m	-439	233	-

Current Valuations for JK TYRE & IND

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 13.5, an improvement from the EPS of Rs 6.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 108.9, stands at 8.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.0 times, while the price to sales ratio stands at 0.3 times.
• The company's price to cash flow (P/CF) ratio stood at 3.2 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	354.3	369.7
TTM Earnings per share	Rs	6.1	13.5
Diluted earnings per share	Rs	6.1	13.5
Price to Cash Flow	x	1.9	3.2
TTM P/E ratio	x	6.7	8.0
Price / Book Value ratio	x	0.7	0.9
Market Cap	Rs m	15,759	22,869
Dividends per share (Unadj.)	Rs	0.7	2.0

Ratio Analysis for JK TYRE & IND

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.0x during FY21, from 0.9x 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 2.1x during FY21, from 1.0x 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 12.5% during FY21, from 6.4% 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 18.1% during FY21, from 9.7% 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 7.3% during FY21, from 6.2% 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	0.9	1.0
Debtors’ Days	Days	8	6
Interest coverage	x	1.0	2.1
Debt to equity ratio	x	1.4	1.1
Return on assets	%	6.2	7.3
Return on equity	%	6.4	12.5
Return on capital employed	%	9.7	18.1

To see how JK TYRE & IND has performed over the last 5 years, please visit here.

JK TYRE & IND Share Price Performance

Over the last one year, JK TYRE & IND share price has moved up from Rs 40.8 to Rs 108.9, registering a gain of Rs 68.1 or around 166.8%.

Overall, the S&P BSE SENSEX is up 74.1% over the year.

(To know more, check out historical annual results for JK TYRE & IND and quarterly results for JK TYRE & IND)

Read: Latest Annual Report Analysis of JK TYRE & IND