NALCO 2020-21 Annual Report Analysis

Wed, 31 Mar

NALCO 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.

NALCO Income Statement Analysis

• Operating income during the year rose 5.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 211.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 17.0% in FY21 as against 5.8% in FY20.
• Depreciation charges increased by 14.3% and finance costs increased by 23.3% YoY, respectively.
• Other income grew by 49.8% YoY.
• Net profit for the year grew by 840.1% YoY.
• Net profit margins during the year grew from 1.6% in FY20 to 14.5% in FY21.

NALCO Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	84,718	89,558	5.7%
Other income	Rs m	2,739	4,103	49.8%
Total Revenues	Rs m	87,458	93,661	7.1%
Gross profit	Rs m	4,879	15,191	211.4%
Depreciation	Rs m	5,298	6,058	14.3%
Interest	Rs m	57	71	23.3%
Profit before tax	Rs m	2,262	13,165	481.9%
Tax	Rs m	880	170	-80.7%
Profit after tax	Rs m	1,382	12,995	840.1%
Gross profit margin	%	5.8	17.0
Effective tax rate	%	38.9	1.3
Net profit margin	%	1.6	14.5

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NALCO Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 20 billion as compared to Rs 27 billion in FY20, thereby witnessing an decrease of -24.6%.
• Current assets fell 6% and stood at Rs 43 billion, while fixed assets rose 4% and stood at Rs 104 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 147 billion as against Rs 145 billion during FY20, thereby witnessing a growth of 1%.

NALCO Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	99,865	106,790	6.9
Current Liabilities	Rs m	27,200	20,498	-24.6
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	145,481	147,089	1.1
Current assets	Rs m	45,578	43,063	-5.5
Fixed Assets	Rs m	99,903	104,026	4.1
Total Assets	Rs m	145,481	147,089	1.1

NALCO Cash Flow Statement Analysis

• NALCO's cash flow from operating activities (CFO) during FY21 stood at Rs 22 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -14 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -6 billion, an improvement of 11% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 2 billion from the Rs -2 billion net cash flows seen during FY20.

NALCO 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	-3,486	21,990	-
Cash Flow from Investing Activities	Rs m	8,727	-14,037	-
Cash Flow from Financing Activities	Rs m	-6,773	-6,002	-
Net Cash Flow	Rs m	-1,531	1,951	-

Current Valuations for NALCO

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 7.1, an improvement from the EPS of Rs 0.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 54.0, stands at 7.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.9 times, while the price to sales ratio stands at 1.1 times.
• The company's price to cash flow (P/CF) ratio stood at 4.4 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	45.4	48.8
TTM Earnings per share	Rs	0.7	7.1
Diluted earnings per share	Rs	0.8	7.1
Price to Cash Flow	x	8.0	4.4
TTM P/E ratio	x	38.7	7.6
Price / Book Value ratio	x	0.8	0.8
Market Cap	Rs m	76,957	83,383
Dividends per share (Unadj.)	Rs	2.8	3.5

Ratio Analysis for NALCO

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.1x 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 186.9x during FY21, from 40.4x 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 12.2% during FY21, from 1.4% 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 12.4% during FY21, from 2.3% 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 8.9% during FY21, from 1.0% 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	2.1
Debtors’ Days	Days	1	1
Interest coverage	x	40.4	186.9
Debt to equity ratio	x	0.0	0.0
Return on assets	%	1.0	8.9
Return on equity	%	1.4	12.2
Return on capital employed	%	2.3	12.4

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 up from Rs 29.2 to Rs 54.0, registering a gain of Rs 24.9 or around 85.2%.

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 NALCO and quarterly results for NALCO)

Read: Latest Annual Report Analysis of NALCO