JSW STEEL 2021-22 Annual Report Analysis

Fri, 1 Jul

JSW STEEL has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

JSW STEEL Income Statement Analysis

• Operating income during the year rose 83.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 91.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 26.1% in FY22 as against 25.0% in FY21.
• Depreciation charges increased by 28.3% and finance costs increased by 25.5% YoY, respectively.
• Other income grew by 120.0% YoY.
• Net profit for the year grew by 154.3% YoY.
• Net profit margins during the year grew from 9.9% in FY21 to 13.7% in FY22.

JSW STEEL Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	798,390	1,463,710	83.3%
Other income	Rs m	6,960	15,310	120.0%
Total Revenues	Rs m	805,350	1,479,020	83.6%
Gross profit	Rs m	199,540	382,660	91.8%
Depreciation	Rs m	46,790	60,010	28.3%
Interest	Rs m	39,570	49,680	25.5%
Profit before tax	Rs m	120,140	288,280	140.0%
Tax	Rs m	41,420	88,070	112.6%
Profit after tax	Rs m	78,720	200,210	154.3%
Gross profit margin	%	25.0	26.1
Effective tax rate	%	34.5	30.6
Net profit margin	%	9.9	13.7

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JSW STEEL Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 576 billion as compared to Rs 433 billion in FY21, thereby witnessing an increase of 32.9%.
• Long-term debt stood at Rs 579 billion as compared to Rs 497 billion during FY21, a growth of 16.5%.
• Current assets rose 82% and stood at Rs 654 billion, while fixed assets rose 18% and stood at Rs 1,311 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 1,965 billion as against Rs 1,472 billion during FY21, thereby witnessing a growth of 34%.

JSW STEEL Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	454,930	670,560	47.4
Current Liabilities	Rs m	432,990	575,510	32.9
Long-term Debt	Rs m	497,310	579,290	16.5
Total Liabilities	Rs m	1,471,630	1,964,850	33.5
Current assets	Rs m	358,520	653,740	82.3
Fixed Assets	Rs m	1,113,110	1,311,110	17.8
Total Assets	Rs m	1,471,630	1,964,850	33.5

JSW STEEL Cash Flow Statement Analysis

• JSW STEEL's cash flow from operating activities (CFO) during FY22 stood at Rs 263 billion, an improvement of 39.5% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -160 billion, an improvement of 62.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -147 billion on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -31 billion from the Rs 80 billion net cash flows seen during FY21.

JSW STEEL Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	188,310	262,700	39.5%
Cash Flow from Investing Activities	Rs m	-98,270	-159,870	-
Cash Flow from Financing Activities	Rs m	-14,440	-146,570	-
Net Cash Flow	Rs m	79,770	-31,350	-

Current Valuations for JSW STEEL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 83.4, an improvement from the EPS of Rs 32.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 563.2, stands at 6.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.0 times, while the price to sales ratio stands at 0.9 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-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	331.9	609.8
TTM Earnings per share	Rs	32.7	83.4
Diluted earnings per share	Rs	32.6	82.8
Price to Cash Flow	x	9.0	5.8
TTM P/E ratio	x	14.4	6.8
Price / Book Value ratio	x	1.6	2.2
Market Cap	Rs m	729,128	1,497,314
Dividends per share (Unadj.)	Rs	6.5	17.4

Ratio Analysis for JSW STEEL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.1x during FY22, from 0.8x during FY21. 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 6.8x during FY22, from 4.0x during FY21. 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 29.9% during FY22, from 17.3% during FY22. 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 27.0% during FY22, from 16.8% during FY21. 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 12.7% during FY22, from 8.0% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	0.8	1.1
Debtors’ Days	Days	2	2
Interest coverage	x	4.0	6.8
Debt to equity ratio	x	1.1	0.9
Return on assets	%	8.0	12.7
Return on equity	%	17.3	29.9
Return on capital employed	%	16.8	27.0

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 down from Rs 680.3 to Rs 563.2, registering a loss of Rs 117.1 or around 17.2%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 15,552.2 (down 2.2%). Over the last one year it has moved down from 18,651.5 to 15,552.2, a loss of 3,099 points (down 16.6%).

Overall, the S&P BSE SENSEX is up 0.9% 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