JSW STEEL 2020-21 Annual Report Analysis

Wed, 31 Mar

JSW STEEL 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.

JSW STEEL Income Statement Analysis

• Operating income during the year rose 8.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 80.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 25.0% in FY21 as against 15.1% in FY20.
• Depreciation charges increased by 10.2% and finance costs decreased by 7.2% YoY, respectively.
• Other income grew by 27.5% YoY.
• Net profit for the year grew by 96.4% YoY.
• Net profit margins during the year grew from 5.5% in FY20 to 9.9% in FY21.

JSW STEEL Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	733,260	798,390	8.9%
Other income	Rs m	5,460	6,960	27.5%
Total Revenues	Rs m	738,720	805,350	9.0%
Gross profit	Rs m	110,680	199,540	80.3%
Depreciation	Rs m	42,460	46,790	10.2%
Interest	Rs m	42,650	39,570	-7.2%
Profit before tax	Rs m	31,030	120,140	287.2%
Tax	Rs m	-9,060	41,420	-557.2%
Profit after tax	Rs m	40,090	78,720	96.4%
Gross profit margin	%	15.1	25.0
Effective tax rate	%	-29.2	34.5
Net profit margin	%	5.5	9.9

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JSW STEEL Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 433 billion as compared to Rs 437 billion in FY20, thereby witnessing an decrease of -0.9%.
• Long-term debt stood at Rs 497 billion as compared to Rs 447 billion during FY20, a growth of 11.3%.
• Current assets fell 2% and stood at Rs 359 billion, while fixed assets rose 18% and stood at Rs 1,125 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 1,483 billion as against Rs 1,318 billion during FY20, thereby witnessing a growth of 13%.

JSW STEEL Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	364,770	466,470	27.9
Current Liabilities	Rs m	436,880	432,990	-0.9
Long-term Debt	Rs m	446,730	497,310	11.3
Total Liabilities	Rs m	1,318,200	1,483,170	12.5
Current assets	Rs m	364,780	358,520	-1.7
Fixed Assets	Rs m	953,420	1,124,650	18.0
Total Assets	Rs m	1,318,200	1,483,170	12.5

JSW STEEL Cash Flow Statement Analysis

• JSW STEEL's cash flow from operating activities (CFO) during FY21 stood at Rs 188 billion, an improvement of 47.0% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -81 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -31 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 80 billion from the Rs -16 billion net cash flows seen during FY20.

JSW STEEL 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	127,850	187,890	47.0%
Cash Flow from Investing Activities	Rs m	-195,860	-81,190	-
Cash Flow from Financing Activities	Rs m	51,890	-31,100	-
Net Cash Flow	Rs m	-16,150	79,770	-

Current Valuations for JSW STEEL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 32.8, an improvement from the EPS of Rs 16.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 467.9, stands at 14.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.4 times, while the price to sales ratio stands at 1.4 times.
• The company's price to cash flow (P/CF) ratio stood at 5.8 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	305.3	332.3
TTM Earnings per share	Rs	16.7	32.8
Diluted earnings per share	Rs	16.6	32.6
Price to Cash Flow	x	4.3	5.8
TTM P/E ratio	x	8.8	14.4
Price / Book Value ratio	x	1.5	1.6
Market Cap	Rs m	539,845	728,109
Dividends per share (Unadj.)	Rs	2.0	6.5

Ratio Analysis for JSW STEEL

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.8x during FY21, from 0.8x 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 improved and stood at 4.0x during FY21, from 1.7x 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 16.9% during FY21, from 11.0% 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 16.6% during FY21, from 9.1% 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 8.0% during FY21, from 6.3% 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	0.8	0.8
Debtors’ Days	Days	2	2
Interest coverage	x	1.7	4.0
Debt to equity ratio	x	1.2	1.1
Return on assets	%	6.3	8.0
Return on equity	%	11.0	16.9
Return on capital employed	%	9.1	16.6

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

JSW STEEL Share Price Performance

Over the last one year, JSW STEEL share price has moved up from Rs 146.5 to Rs 467.9, registering a gain of Rs 321.4 or around 219.5%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 14,350.6 (up 0.4%). Over the last one year it has moved up from 5,713.3 to 14,350.6, a gain of 8,637 points (up 151.2%).

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

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

Read: Latest Annual Report Analysis of JSW STEEL