KALYANI STEELS 2020-21 Annual Report Analysis

Wed, 31 Mar

KALYANI STEELS 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.

KALYANI STEELS Income Statement Analysis

• Operating income during the year fell 0.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 35.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 22.2% in FY21 as against 16.2% in FY20.
• Depreciation charges increased by 3.4% and finance costs decreased by 26.2% YoY, respectively.
• Other income grew by 83.9% YoY.
• Net profit for the year grew by 41.7% YoY.
• Net profit margins during the year grew from 11.2% in FY20 to 16.0% in FY21.

KALYANI STEELS Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	11,989	11,880	-0.9%
Other income	Rs m	233	428	83.9%
Total Revenues	Rs m	12,222	12,308	0.7%
Gross profit	Rs m	1,939	2,632	35.7%
Depreciation	Rs m	427	442	3.4%
Interest	Rs m	96	71	-26.2%
Profit before tax	Rs m	1,649	2,547	54.5%
Tax	Rs m	308	647	110.3%
Profit after tax	Rs m	1,341	1,900	41.7%
Gross profit margin	%	16.2	22.2
Effective tax rate	%	18.7	25.4
Net profit margin	%	11.2	16.0

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KALYANI STEELS Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 4 billion as compared to Rs 4 billion in FY20, thereby witnessing an increase of 23.6%.
• Long-term debt stood at Rs 233 million as compared to Rs 46 million during FY20, a growth of 408.7%.
• Current assets rose 31% and stood at Rs 10 billion, while fixed assets rose 8% and stood at Rs 6 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 17 billion as against Rs 14 billion during FY20, thereby witnessing a growth of 21%.

KALYANI STEELS Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	9,631	11,533	19.8
Current Liabilities	Rs m	3,552	4,391	23.6
Long-term Debt	Rs m	46	233	408.7
Total Liabilities	Rs m	13,645	16,505	21.0
Current assets	Rs m	7,858	10,284	30.9
Fixed Assets	Rs m	5,787	6,221	7.5
Total Assets	Rs m	13,645	16,505	21.0

KALYANI STEELS Cash Flow Statement Analysis

• KALYANI STEELS's cash flow from operating activities (CFO) during FY21 stood at Rs 554 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -2 billion, an improvement of 19.5% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs 2 billion, an improvement of 301% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -34 million from the Rs -62 million net cash flows seen during FY20.

KALYANI STEELS 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	2,569	554	-78.4%
Cash Flow from Investing Activities	Rs m	-1,834	-2,191	-
Cash Flow from Financing Activities	Rs m	-797	1,603	-
Net Cash Flow	Rs m	-62	-34	-

Current Valuations for KALYANI STEELS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 43.5, an improvement from the EPS of Rs 30.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 318.7, stands at 7.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.2 times, while the price to sales ratio stands at 1.2 times.
• The company's price to cash flow (P/CF) ratio stood at 4.2 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	274.7	272.2
TTM Earnings per share	Rs	30.7	43.5
Diluted earnings per share	Rs	30.7	43.5
Price to Cash Flow	x	3.1	4.2
TTM P/E ratio	x	4.1	7.3
Price / Book Value ratio	x	0.8	0.9
Market Cap	Rs m	7,879	9,921
Dividends per share (Unadj.)	Rs	5.0	7.5

Ratio Analysis for KALYANI STEELS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.3x during FY21, from 2.2x 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 36.9x during FY21, from 18.2x 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 16.5% during FY21, from 13.9% 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 improved and stood at 22.3% during FY21, from 18.0% 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 11.9% during FY21, from 10.5% 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	2.2	2.3
Debtors’ Days	Days	72	77
Interest coverage	x	18.2	36.9
Debt to equity ratio	x	0.0	0.0
Return on assets	%	10.5	11.9
Return on equity	%	13.9	16.5
Return on capital employed	%	18.0	22.3

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

KALYANI STEELS Share Price Performance

Over the last one year, KALYANI STEELS share price has moved up from Rs 126.1 to Rs 318.7, registering a gain of Rs 192.6 or around 152.7%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 14,350.6 (up 0.4%). Over the last one year it has moved up from 5,713.3 to 14,350.6, a gain of 8,637 points (up 151.2%).

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

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

Read: Latest Annual Report Analysis of KALYANI STEELS