L.G.BALAKRISHNAN 2020-21 Annual Report Analysis

Wed, 31 Mar

L.G.BALAKRISHNAN 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.

L.G.BALAKRISHNAN Income Statement Analysis

• Operating income during the year rose 4.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 29.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 16.5% in FY21 as against 13.3% in FY20.
• Depreciation charges increased by 5.9% and finance costs decreased by 32.9% YoY, respectively.
• Other income grew by 74.2% YoY.
• Net profit for the year grew by 47.4% YoY.
• Net profit margins during the year grew from 5.8% in FY20 to 8.3% in FY21.

L.G.BALAKRISHNAN Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	15,428	16,090	4.3%
Other income	Rs m	48	83	74.2%
Total Revenues	Rs m	15,476	16,173	4.5%
Gross profit	Rs m	2,050	2,660	29.8%
Depreciation	Rs m	787	833	5.9%
Interest	Rs m	163	109	-32.9%
Profit before tax	Rs m	1,148	1,801	56.8%
Tax	Rs m	247	473	91.3%
Profit after tax	Rs m	901	1,328	47.4%
Gross profit margin	%	13.3	16.5
Effective tax rate	%	21.5	26.2
Net profit margin	%	5.8	8.3

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L.G.BALAKRISHNAN Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 4 billion as compared to Rs 3 billion in FY20, thereby witnessing an increase of 39.5%.
• Long-term debt down at Rs 192 million as compared to Rs 806 million during FY20, a fall of 76.1%.
• Current assets rose 43% and stood at Rs 7 billion, while fixed assets rose 2% and stood at Rs 6 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 14 billion as against Rs 11 billion during FY20, thereby witnessing a growth of 20%.

L.G.BALAKRISHNAN Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	7,061	8,794	24.5
Current Liabilities	Rs m	3,006	4,194	39.5
Long-term Debt	Rs m	806	192	-76.1
Total Liabilities	Rs m	11,316	13,574	20.0
Current assets	Rs m	4,974	7,118	43.1
Fixed Assets	Rs m	6,342	6,456	1.8
Total Assets	Rs m	11,316	13,574	20.0

L.G.BALAKRISHNAN Cash Flow Statement Analysis

• L.G.BALAKRISHNAN's cash flow from operating activities (CFO) during FY21 stood at Rs 2 billion, an improvement of 11.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -1 billion, an improvement of 99.0% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -598 million, an improvement of 61% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 566 million from the Rs -52 million net cash flows seen during FY20.

L.G.BALAKRISHNAN 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	2,034	2,260	11.1%
Cash Flow from Investing Activities	Rs m	-551	-1,096	-
Cash Flow from Financing Activities	Rs m	-1,536	-598	-
Net Cash Flow	Rs m	-52	566	-

Current Valuations for L.G.BALAKRISHNAN

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 42.3, an improvement from the EPS of Rs 28.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 305.8, stands at 7.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.1 times, while the price to sales ratio stands at 0.6 times.
• The company's price to cash flow (P/CF) ratio stood at 3.7 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	491.5	512.6
TTM Earnings per share	Rs	28.7	42.3
Diluted earnings per share	Rs	28.7	42.3
Price to Cash Flow	x	3.0	3.7
TTM P/E ratio	x	6.4	7.2
Price / Book Value ratio	x	1.2	0.9
Market Cap	Rs m	8,570	8,045
Dividends per share (Unadj.)	Rs	5.0	10.0

Ratio Analysis for L.G.BALAKRISHNAN

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.7x during FY21, from 1.7x 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 17.5x during FY21, from 8.1x 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 15.1% during FY21, from 12.8% 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 21.3% during FY21, from 16.7% 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 10.6% during FY21, from 9.4% 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	1.7	1.7
Debtors’ Days	Days	413	560
Interest coverage	x	8.1	17.5
Debt to equity ratio	x	0.1	0.0
Return on assets	%	9.4	10.6
Return on equity	%	12.8	15.1
Return on capital employed	%	16.7	21.3

To see how L.G.BALAKRISHNAN has performed over the last 5 years, please visit here.

L.G.BALAKRISHNAN Share Price Performance

Over the last one year, L.G.BALAKRISHNAN share price has moved up from Rs 160.3 to Rs 305.8, registering a gain of Rs 145.5 or around 90.8%.

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

(To know more, check out historical annual results for L.G.BALAKRISHNAN and quarterly results for L.G.BALAKRISHNAN)

Read: Latest Annual Report Analysis of L.G.BALAKRISHNAN