NALCO 2021-22 Annual Report Analysis

Tue, 6 Sep

NALCO has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

NALCO Income Statement Analysis

• Operating income during the year rose 58.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 197.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 31.8% in FY22 as against 17.0% in FY21.
• Depreciation charges increased by 38.1% and finance costs increased by 226.6% YoY, respectively.
• Other income declined by 27.1% YoY.
• Net profit for the year grew by 127.2% YoY.
• Net profit margins during the year grew from 14.5% in FY21 to 20.8% in FY22.

NALCO Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	89,558	141,808	58.3%
Other income	Rs m	4,111	2,998	-27.1%
Total Revenues	Rs m	93,669	144,806	54.6%
Gross profit	Rs m	15,183	45,148	197.4%
Depreciation	Rs m	6,058	8,366	38.1%
Interest	Rs m	71	231	226.6%
Profit before tax	Rs m	13,165	39,549	200.4%
Tax	Rs m	170	10,029	5,802.9%
Profit after tax	Rs m	12,995	29,520	127.2%
Gross profit margin	%	17.0	31.8
Effective tax rate	%	1.3	25.4
Net profit margin	%	14.5	20.8

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NALCO Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 33 billion as compared to Rs 22 billion in FY21, thereby witnessing an increase of 51.9%.
• Current assets rose 51% and stood at Rs 67 billion, while fixed assets rose 4% and stood at Rs 108 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 175 billion as against Rs 148 billion during FY21, thereby witnessing a growth of 18%.

NALCO Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	106,790	125,524	17.5
Current Liabilities	Rs m	21,744	33,031	51.9
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	148,334	174,795	17.8
Current assets	Rs m	44,309	66,890	51.0
Fixed Assets	Rs m	104,026	107,905	3.7
Total Assets	Rs m	148,334	174,795	17.8

NALCO Cash Flow Statement Analysis

• NALCO's cash flow from operating activities (CFO) during FY22 stood at Rs 40 billion, an improvement of 80.0% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -26 billion, an improvement of 86.6% on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -11 billion on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 2 billion from the Rs 2 billion net cash flows seen during FY21.

NALCO Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	21,994	39,584	80.0%
Cash Flow from Investing Activities	Rs m	-14,037	-26,192	-
Cash Flow from Financing Activities	Rs m	-6,007	-11,398	-
Net Cash Flow	Rs m	1,951	1,993	2.2%

Current Valuations for NALCO

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 16.1, an improvement from the EPS of Rs 7.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 79.9, stands at 4.6 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 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 4.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	48.8	77.2
TTM Earnings per share	Rs	7.1	16.1
Diluted earnings per share	Rs	7.1	16.1
Price to Cash Flow	x	5.2	4.5
TTM P/E ratio	x	7.6	4.6
Price / Book Value ratio	x	0.8	1.4
Market Cap	Rs m	83,383	170,623
Dividends per share (Unadj.)	Rs	3.5	6.5

Ratio Analysis for NALCO

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.0x during FY22, from 2.0x during FY21. 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 172.1x during FY22, from 186.9x during FY21. 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 23.5% during FY22, from 12.2% during FY22. 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 31.7% during FY22, from 12.4% during FY21. 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 17.0% during FY22, from 8.8% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	2.0	2.0
Debtors’ Days	Days	1	0
Interest coverage	x	186.9	172.1
Debt to equity ratio	x	0.0	0.0
Return on assets	%	8.8	17.0
Return on equity	%	12.2	23.5
Return on capital employed	%	12.4	31.7

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 99.3 to Rs 79.9, registering a loss of Rs 19.4 or around 19.5%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 19,136.6 (up 0.3%). Over the last one year it has moved down from 20,666.8 to 19,136.6, a loss of 1,530 points (down 7.4%).

Overall, the S&P BSE SENSEX is up 2.6% 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