KEC INTERNATIONAL 2020-21 Annual Report Analysis

Wed, 31 Mar

KEC INTERNATIONAL 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.

KEC INTERNATIONAL Income Statement Analysis

• Operating income during the year rose 9.6% on a year-on-year (YoY) basis.
• The company's operating profit increased by 0.8% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 9.3% in FY21 as against 10.1% in FY20.
• Depreciation charges increased by 3.6% and finance costs decreased by 10.6% YoY, respectively.
• Other income declined by 61.9% YoY.
• Net profit for the year declined by 2.3% YoY.
• Net profit margins during the year declined from 4.7% in FY20 to 4.2% in FY21.

KEC INTERNATIONAL Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	119,654	131,142	9.6%
Other income	Rs m	1,320	503	-61.9%
Total Revenues	Rs m	120,973	131,645	8.8%
Gross profit	Rs m	12,086	12,186	0.8%
Depreciation	Rs m	1,472	1,525	3.6%
Interest	Rs m	4,031	3,605	-10.6%
Profit before tax	Rs m	7,903	7,559	-4.3%
Tax	Rs m	2,248	2,032	-9.6%
Profit after tax	Rs m	5,655	5,527	-2.3%
Gross profit margin	%	10.1	9.3
Effective tax rate	%	28.4	26.9
Net profit margin	%	4.7	4.2

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KEC INTERNATIONAL Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 103 billion as compared to Rs 97 billion in FY20, thereby witnessing an increase of 5.8%.
• Long-term debt stood at Rs 2 billion as compared to Rs 2 billion during FY20, a growth of 43.3%.
• Current assets rose 8% and stood at Rs 119 billion, while fixed assets rose 15% and stood at Rs 21 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 140 billion as against Rs 129 billion during FY20, thereby witnessing a growth of 9%.

KEC INTERNATIONAL Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	27,976	33,597	20.1
Current Liabilities	Rs m	97,237	102,874	5.8
Long-term Debt	Rs m	1,527	2,187	43.3
Total Liabilities	Rs m	128,546	139,860	8.8
Current assets	Rs m	110,211	118,835	7.8
Fixed Assets	Rs m	18,334	21,025	14.7
Total Assets	Rs m	128,546	139,860	8.8

KEC INTERNATIONAL Cash Flow Statement Analysis

• KEC INTERNATIONAL's cash flow from operating activities (CFO) during FY21 stood at Rs 8 billion, an improvement of 865.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -1 billion, an improvement of 8.0% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -7 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 471 million from the Rs -226 million net cash flows seen during FY20.

KEC INTERNATIONAL 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	875	8,445	865.7%
Cash Flow from Investing Activities	Rs m	-1,179	-1,274	-
Cash Flow from Financing Activities	Rs m	25	-6,639	-
Net Cash Flow	Rs m	-226	471	-

Current Valuations for KEC INTERNATIONAL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 21.5, an decline from the EPS of Rs 22.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 410.4, stands at 19.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.1 times, while the price to sales ratio stands at 0.8 times.
• The company's price to cash flow (P/CF) ratio stood at 11.7 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	465.4	510.1
TTM Earnings per share	Rs	22.0	21.5
Diluted earnings per share	Rs	22.0	21.5
Price to Cash Flow	x	6.7	11.7
TTM P/E ratio	x	8.4	19.1
Price / Book Value ratio	x	2.4	2.5
Market Cap	Rs m	66,946	82,390
Dividends per share (Unadj.)	Rs	3.4	4.0

Ratio Analysis for KEC INTERNATIONAL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.2x during FY21, from 1.1x 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 3.1x during FY21, from 3.0x 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 declined and down at 16.5% during FY21, from 20.2% 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 declined and down at 31.2% during FY21, from 40.4% 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 declined and down at 6.5% during FY21, from 7.5% 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	1.1	1.2
Debtors’ Days	Days	17	15
Interest coverage	x	3.0	3.1
Debt to equity ratio	x	0.1	0.1
Return on assets	%	7.5	6.5
Return on equity	%	20.2	16.5
Return on capital employed	%	40.4	31.2

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

KEC INTERNATIONAL Share Price Performance

Over the last one year, KEC INTERNATIONAL share price has moved up from Rs 185.5 to Rs 410.4, registering a gain of Rs 224.9 or around 121.2%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 21,095.8 (down 0.4%). Over the last one year it has moved up from 10,979.5 to 21,095.8, a gain of 10,116 points (up 92.1%).

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

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

Read: Latest Annual Report Analysis of KEC INTERNATIONAL