NALCO 2019-20 Annual Report Analysis

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NALCO 2019-20 Annual Report Analysis
Tue, 8 Dec

NALCO has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

NALCO Income Statement Analysis

  • Operating income during the year fell 26.3% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 83.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 5.8% in FY20 as against 25.2% in FY19.
  • Depreciation charges increased by 11.3% and finance costs increased by 141.2% YoY, respectively.
  • Other income declined by 16.4% YoY.
  • Net profit for the year declined by 92.1% YoY.
  • Net profit margins during the year declined from 14.7% in FY19 to 1.6% in FY20.

NALCO Income Statement 2019-20

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Net Sales Rs m 114,993 84,718 -26.3%
Other income Rs m 3,259 2,726 -16.4%
Total Revenues Rs m 118,252 87,444 -26.1%
Gross profit Rs m 28,925 4,892 -83.1%
Depreciation Rs m 4,761 5,298 11.3%
Interest Rs m 24 57 141.2%
Profit before tax Rs m 27,399 2,262 -91.7%
Tax Rs m 10,075 880 -91.3%
Profit after tax Rs m 17,337 1,362 -92.1%
Gross profit margin % 25.2 5.8
Effective tax rate % 36.8 38.9
Net profit margin % 14.7 1.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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NALCO Balance Sheet Analysis

  • The company's current liabilities during FY20 down at Rs 27 billion as compared to Rs 29 billion in FY19, thereby witnessing an decrease of -6.4%.
  • Current assets fell 19% and stood at Rs 46 billion, while fixed assets rose 9% and stood at Rs 89 billion in FY20.
  • Overall, the total assets and liabilities for FY20 stood at Rs 145 billion as against Rs 151 billion during FY19, thereby witnessing a fall of 4%.

NALCO Balance Sheet as on March 2020

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Networth Rs m 104,849 99,865 -4.8
 
Current Liabilities Rs m 29,051 27,200 -6.4
Long-term Debt Rs m 0 0 0.0
Total Liabilities Rs m 151,474 145,481 -4.0
 
Current assets Rs m 56,007 45,578 -18.6
Fixed Assets Rs m 81,685 89,115 9.1
Total Assets Rs m 151,474 145,481 -4.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



NALCO Cash Flow Statement Analysis

  • NALCO's cash flow from operating activities (CFO) during FY20 stood at Rs -3 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY20 stood at Rs 9 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY20 stood at Rs -7 billion, an improvement of 61% on a YoY basis.
  • Overall, net cash flows for the company during FY20 stood at Rs -2 billion from the Rs 1 billion net cash flows seen during FY19.

NALCO Cash Flow Statement 2019-20

Particulars No. of months 12 12 % Change
Year Ending Mar-19 Mar-20
Cash Flow from Operating Activities Rs m 24,089 -3,486 -
Cash Flow from Investing Activities Rs m -5,319 8,727 -
Cash Flow from Financing Activities Rs m -17,308 -6,773 -
Net Cash Flow Rs m 1,463 -1,531 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for NALCO

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.7, an decline from the EPS of Rs 9.3 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 42.3, stands at 78.8 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 0.8 times, while the price to sales ratio stands at 0.9 times.
  • The company's price to cash flow (P/CF) ratio stood at 16.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Sales per share (Unadj.) Rs 61.6 45.4
TTM Earnings per share Rs 9.3 0.7
Diluted earnings per share Rs 6.7 0.5
Price to Cash Flow x 3.6 16.3
TTM P/E ratio x 57.0 78.8
Price / Book Value ratio x 1.2 0.8
Market Cap Rs m 78,822 108,888
Dividends per share (Unadj.) Rs 5.8 1.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for NALCO

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 1.7x during FY20, from 1.9x during FY19. 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 40.4x during FY20, from 1,152.2x during FY19. 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 1.4% during FY20, from 16.5% during FY20. 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 2.3% during FY20, from 26.2% during FY19. 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 1.0% during FY20, from 11.5% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Current ratio x 1.9 1.7
Debtors’ Days Days 8 6
Interest coverage x 1,152.2 40.4
Debt to equity ratio x 0.0 0.0
Return on assets % 11.5 1.0
Return on equity % 16.5 1.4
Return on capital employed % 26.2 2.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

NALCO Share Price Performance

Over the last one year, NALCO share price has moved down from Rs 43.2 to Rs 42.3, registering a loss of Rs 1.0 or around 2.2%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 10,960.5 (down 0.8%). Over the last one year it has moved up from 9,435.7 to 10,960.5, a gain of 1,525 points (up 16.2%).

Overall, the S&P BSE SENSEX is up 11.9% over the year.

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

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Related Views on News

NALCO Announces Quarterly Results (3QFY20); Net Profit Down 111.3% (Quarterly Result Update)

Feb 11, 2020 | Updated on Feb 11, 2020

For the quarter ended December 2019, NALCO has posted a net profit of Rs 340 m (down 111.3% YoY). Sales on the other hand came in at Rs 21 bn (down 23.2% YoY). Read on for a complete analysis of NALCO's quarterly results.

NALCO 2018-19 Annual Report Analysis (Annual Result Update)

Sep 9, 2019 | Updated on Sep 9, 2019

Here's an analysis of the annual report of NALCO for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of NALCO. Also includes updates on the valuation of NALCO.

NALCO Announces Quarterly Results (1QFY20); Net Profit Down 85.8% (Quarterly Result Update)

Aug 14, 2019 | Updated on Aug 14, 2019

For the quarter ended June 2019, NALCO has posted a net profit of Rs 978 m (down 85.8% YoY). Sales on the other hand came in at Rs 21 bn (down 29.9% YoY). Read on for a complete analysis of NALCO's quarterly results.

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