KOVAI MEDICAL 2020-21 Annual Report Analysis

Wed, 31 Mar

KOVAI MEDICAL 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.

KOVAI MEDICAL Income Statement Analysis

• Operating income during the year fell 3.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 14.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 28.3% in FY21 as against 24.0% in FY20.
• Depreciation charges increased by 30.5% and finance costs increased by 89.8% YoY, respectively.
• Other income grew by 11.9% YoY.
• Net profit for the year declined by 17.9% YoY.
• Net profit margins during the year declined from 13.3% in FY20 to 11.3% in FY21.

KOVAI MEDICAL Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	7,117	6,904	-3.0%
Other income	Rs m	106	119	11.9%
Total Revenues	Rs m	7,223	7,022	-2.8%
Gross profit	Rs m	1,711	1,954	14.2%
Depreciation	Rs m	521	680	30.5%
Interest	Rs m	176	335	89.8%
Profit before tax	Rs m	1,119	1,057	-5.5%
Tax	Rs m	173	281	61.9%
Profit after tax	Rs m	946	777	-17.9%
Gross profit margin	%	24.0	28.3
Effective tax rate	%	15.5	26.5
Net profit margin	%	13.3	11.3

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KOVAI MEDICAL Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 1 billion as compared to Rs 1 billion in FY20, thereby witnessing an increase of 32.1%.
• Long-term debt stood at Rs 6 billion as compared to Rs 5 billion during FY20, a growth of 9.1%.
• Current assets rose 34% and stood at Rs 2 billion, while fixed assets rose 13% and stood at Rs 11 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 13 billion as against Rs 11 billion during FY20, thereby witnessing a growth of 16%.

KOVAI MEDICAL Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	4,310	5,100	18.3
Current Liabilities	Rs m	1,047	1,382	32.1
Long-term Debt	Rs m	5,046	5,507	9.1
Total Liabilities	Rs m	11,072	12,808	15.7
Current assets	Rs m	1,403	1,883	34.2
Fixed Assets	Rs m	9,669	10,925	13.0
Total Assets	Rs m	11,072	12,808	15.7

KOVAI MEDICAL Cash Flow Statement Analysis

• KOVAI MEDICAL's cash flow from operating activities (CFO) during FY21 stood at Rs 2 billion, an improvement of 22.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -2 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs 380 million on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -1 billion from the Rs -698 million net cash flows seen during FY20.

KOVAI MEDICAL 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	1,520	1,864	22.7%
Cash Flow from Investing Activities	Rs m	-2,557	-1,805	-
Cash Flow from Financing Activities	Rs m	1,128	380	-66.3%
Net Cash Flow	Rs m	-698	-1,043	-

Current Valuations for KOVAI MEDICAL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 71.0, an decline from the EPS of Rs 86.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,102.7, stands at 15.5 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 1.7 times.
• The company's price to cash flow (P/CF) ratio stood at 6.8 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	650.6	631.0
TTM Earnings per share	Rs	86.5	71.0
Diluted earnings per share	Rs	86.4	71.0
Price to Cash Flow	x	5.1	6.8
TTM P/E ratio	x	7.9	15.5
Price / Book Value ratio	x	1.7	1.9
Market Cap	Rs m	7,459	9,912
Dividends per share (Unadj.)	Rs	3.0	3.0

Ratio Analysis for KOVAI MEDICAL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x during FY21, from 1.3x 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 deteriorated and stood at 4.2x during FY21, from 7.3x 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 15.2% during FY21, from 21.9% 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 13.1% during FY21, from 13.8% 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 8.7% during FY21, from 10.1% 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	1.3	1.4
Debtors’ Days	Days	43	56
Interest coverage	x	7.3	4.2
Debt to equity ratio	x	1.2	1.1
Return on assets	%	10.1	8.7
Return on equity	%	21.9	15.2
Return on capital employed	%	13.8	13.1

To see how KOVAI MEDICAL has performed over the last 5 years, please visit here.

KOVAI MEDICAL Share Price Performance

Over the last one year, KOVAI MEDICAL share price has moved up from Rs 679.9 to Rs 1,102.7, registering a gain of Rs 422.8 or around 62.2%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 21,328.2 (up 0.4%). Over the last one year it has moved up from 12,148.6 to 21,328.2, a gain of 9,180 points (up 75.6%).

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

(To know more, check out historical annual results for KOVAI MEDICAL and quarterly results for KOVAI MEDICAL)

Read: Latest Annual Report Analysis of KOVAI MEDICAL