KSB 2020-21 Annual Report Analysis

Fri, 31 Dec

KSB has announced its results for the year ended December 2021. Let us have a look at the detailed performance review of the company during FY20-21.

KSB Income Statement Analysis

• Operating income during the year rose 23.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 24.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 14.0% in CY21 as against 13.9% in CY20.
• Depreciation charges increased by 4.2% and finance costs increased by 48.5% YoY, respectively.
• Other income grew by 16.1% YoY.
• Net profit for the year grew by 61.6% YoY.
• Net profit margins during the year grew from 7.3% in CY20 to 9.5% in CY21.

KSB Income Statement 2020-21

No. of Mths Year Ending		12 Dec-20*	12 Dec-21*	% Change
Net Sales	Rs m	12,081	14,973	23.9%
Other income	Rs m	290	337	16.1%
Total Revenues	Rs m	12,371	15,310	23.8%
Gross profit	Rs m	1,678	2,095	24.8%
Depreciation	Rs m	418	435	4.2%
Interest	Rs m	34	50	48.5%
Profit before tax	Rs m	1,517	1,946	28.3%
Tax	Rs m	632	516	-18.3%
Profit after tax	Rs m	885	1,430	61.6%
Gross profit margin	%	13.9	14.0
Effective tax rate	%	41.7	26.5
Net profit margin	%	7.3	9.5

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KSB Balance Sheet Analysis

• The company's current liabilities during CY21 down at Rs 5 billion as compared to Rs 6 billion in CY20, thereby witnessing an decrease of -9.7%.
• Current assets rose 3% and stood at Rs 11 billion, while fixed assets rose 8% and stood at Rs 5 billion in CY21.
• Overall, the total assets and liabilities for CY21 stood at Rs 16 billion as against Rs 15 billion during CY20, thereby witnessing a growth of 4%.

KSB Balance Sheet as on December 2021

No. of Mths Year Ending		12 Dec-20*	12 Dec-21*	% Change
Networth	Rs m	8,906	10,108	13.5
Current Liabilities	Rs m	6,033	5,448	-9.7
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	15,393	16,043	4.2
Current assets	Rs m	10,912	11,202	2.7
Fixed Assets	Rs m	4,480	4,840	8.0
Total Assets	Rs m	15,393	16,043	4.2

KSB Cash Flow Statement Analysis

• KSB's cash flow from operating activities (CFO) during CY21 stood at Rs 625 million on a YoY basis.
• Cash flow from investing activities (CFI) during CY21 stood at Rs 28 million on a YoY basis.
• Cash flow from financial activities (CFF) during CY21 stood at Rs -954 million on a YoY basis.
• Overall, net cash flows for the company during CY21 stood at Rs -305 million from the Rs 387 million net cash flows seen during CY20.

KSB Cash Flow Statement 2020-21

Particulars	No. of months	12	12	% Change
	Year Ending	Dec-20	Dec-21
Cash Flow from Operating Activities	Rs m	1,715	625	-63.6%
Cash Flow from Investing Activities	Rs m	-1,006	28	-
Cash Flow from Financing Activities	Rs m	-318	-954	-
Net Cash Flow	Rs m	387	-305	-

Current Valuations for KSB

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 41.1, an improvement from the EPS of Rs 25.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,435.0, stands at 35.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.5 times, while the price to sales ratio stands at 2.4 times.
• The company's price to cash flow (P/CF) ratio stood at 19.0 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Dec-20*	12 Dec-21*
Sales per share (Unadj.)	Rs	347.1	430.1
TTM Earnings per share	Rs	25.4	41.1
Diluted earnings per share	Rs	25.4	41.1
Price to Cash Flow	x	22.7	19.0
TTM P/E ratio	x	29.6	35.8
Price / Book Value ratio	x	2.2	3.5
Market Cap	Rs m	20,029	35,366
Dividends per share (Unadj.)	Rs	8.5	12.5

Ratio Analysis for KSB

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.1x during CY21, from 1.8x during CY20. 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 39.6x during CY21, from 45.7x during CY20. 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 14.1% during CY21, from 9.9% during CY21. 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 19.7% during CY21, from 17.4% during CY20. 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 9.2% during CY21, from 6.0% during CY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Dec-20*	12 Dec-21*
Current ratio	x	1.8	2.1
Debtors’ Days	Days	81	68
Interest coverage	x	45.7	39.6
Debt to equity ratio	x	0.0	0.0
Return on assets	%	6.0	9.2
Return on equity	%	9.9	14.1
Return on capital employed	%	17.4	19.7

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

KSB Share Price Performance

Over the last one year, KSB share price has moved up from Rs 944.8 to Rs 1,435.0, registering a gain of Rs 490.2 or around 51.9%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 26,431.6 (up 3.2%). Over the last one year it has moved up from 22,019.0 to 26,431.6, a gain of 4,413 points (up 20.0%).

Overall, the S&P BSE SENSEX is up 8.2% over the year.

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

Read: Latest Annual Report Analysis of KSB