JSW STEEL 2020-21 Annual Report Analysis

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JSW STEEL 2020-21 Annual Report Analysis
Mon, 26 Jul

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 5.4% in FY20 to 9.8% 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 % 5.4 9.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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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
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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 704.0, stands at 12.2 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.6 times, while the price to sales ratio stands at 0.9 times.
  • The company's price to cash flow (P/CF) ratio stood at 13.6 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 20.5 13.6
TTM P/E ratio x 12.1 12.2
Price / Book Value ratio x 1.5 1.6
Market Cap Rs m 1,690,805 1,701,723
Dividends per share (Unadj.) Rs 2.0 6.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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 204.9 to Rs 704.0, registering a gain of Rs 499.1 or around 243.6%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 19,503.5 (up 0.6%). Over the last one year it has moved up from 7,567.5 to 19,503.5, a gain of 11,936 points (up 157.7%).

Overall, the S&P BSE SENSEX is up 39.6% over the year.

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

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Related Views on News

JSW STEEL Announces Quarterly Results (1QFY22); Net Profit Up 1154.3% (Quarterly Result Update)

Jul 26, 2021 | Updated on Jul 26, 2021

For the quarter ended June 2021, JSW STEEL has posted a net profit of Rs 56 bn (up 1154.3% YoY). Sales on the other hand came in at Rs 289 bn (up 145.3% YoY). Read on for a complete analysis of JSW STEEL's quarterly results.

JSW STEEL Announces Quarterly Results (4QFY20); Net Profit Down 85.8% (Quarterly Result Update)

May 27, 2020 | Updated on May 27, 2020

For the quarter ended March 2020, JSW STEEL has posted a net profit of Rs 2 bn (down 85.8% YoY). Sales on the other hand came in at Rs 179 bn (down 20.0% YoY). Read on for a complete analysis of JSW STEEL's quarterly results.

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