NAVNEET EDUCATION 2020-21 Annual Report Analysis

Wed, 31 Mar

NAVNEET EDUCATION 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.

NAVNEET EDUCATION Income Statement Analysis

• Operating income during the year fell 44.8% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 58.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 15.7% in FY21 as against 20.9% in FY20.
• Depreciation charges increased by 0.5% and finance costs decreased by 39.8% YoY, respectively.
• Other income declined by 39.1% YoY.
• Net profit for the year declined by 73.1% YoY.
• Net profit margins during the year declined from 13.0% in FY20 to 6.4% in FY21.

NAVNEET EDUCATION Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	15,121	8,346	-44.8%
Other income	Rs m	224	137	-39.1%
Total Revenues	Rs m	15,345	8,482	-44.7%
Gross profit	Rs m	3,154	1,309	-58.5%
Depreciation	Rs m	469	471	0.5%
Interest	Rs m	190	115	-39.8%
Profit before tax	Rs m	2,719	859	-68.4%
Tax	Rs m	746	328	-56.0%
Profit after tax	Rs m	1,973	531	-73.1%
Gross profit margin	%	20.9	15.7
Effective tax rate	%	27.4	38.2
Net profit margin	%	13.0	6.4

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NAVNEET EDUCATION Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 2 billion as compared to Rs 4 billion in FY20, thereby witnessing an decrease of -42.7%.
• Long-term debt down at Rs 3 million as compared to Rs 4 million during FY20, a fall of 21.1%.
• Current assets fell 16% and stood at Rs 7 billion, while fixed assets rose 8% and stood at Rs 5 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 12 billion as against Rs 13 billion during FY20, thereby witnessing a fall of 8%.

NAVNEET EDUCATION Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	8,628	9,305	7.8
Current Liabilities	Rs m	3,914	2,242	-42.7
Long-term Debt	Rs m	4	3	-21.1
Total Liabilities	Rs m	12,800	11,805	-7.8
Current assets	Rs m	8,575	7,239	-15.6
Fixed Assets	Rs m	4,225	4,566	8.1
Total Assets	Rs m	12,800	11,805	-7.8

NAVNEET EDUCATION Cash Flow Statement Analysis

• NAVNEET EDUCATION's cash flow from operating activities (CFO) during FY21 stood at Rs 3 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -401 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -2 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 137 million from the Rs 235 million net cash flows seen during FY20.

NAVNEET EDUCATION 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	2,855	2,679	-6.2%
Cash Flow from Investing Activities	Rs m	-612	-401	-
Cash Flow from Financing Activities	Rs m	-2,009	-2,141	-
Net Cash Flow	Rs m	235	137	-41.8%

Current Valuations for NAVNEET EDUCATION

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 2.3, an decline from the EPS of Rs 8.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 80.1, stands at 34.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.9 times, while the price to sales ratio stands at 2.2 times.
• The company's price to cash flow (P/CF) ratio stood at 17.7 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	66.1	36.5
TTM Earnings per share	Rs	8.6	2.3
Diluted earnings per share	Rs	8.7	2.3
Price to Cash Flow	x	5.7	17.7
TTM P/E ratio	x	6.0	34.1
Price / Book Value ratio	x	2.2	1.9
Market Cap	Rs m	18,836	17,749
Dividends per share (Unadj.)	Rs	3.0	1.0

Ratio Analysis for NAVNEET EDUCATION

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.2x 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 deteriorated and stood at 8.5x during FY21, from 15.3x 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 declined and down at 5.7% during FY21, from 22.9% 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 declined and down at 10.5% during FY21, from 33.7% 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 declined and down at 5.5% during FY21, from 16.9% 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	3.2
Debtors’ Days	Days	647	807
Interest coverage	x	15.3	8.5
Debt to equity ratio	x	0.0	0.0
Return on assets	%	16.9	5.5
Return on equity	%	22.9	5.7
Return on capital employed	%	33.7	10.5

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

NAVNEET EDUCATION Share Price Performance

Over the last one year, NAVNEET EDUCATION share price has moved up from Rs 62.0 to Rs 80.1, registering a gain of Rs 18.2 or around 29.3%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 11,919.9 (down 0.9%). Over the last one year it has moved up from 6,403.4 to 11,919.9, a gain of 5,517 points (up 86.1%).

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

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

Read: Latest Annual Report Analysis of NAVNEET EDUCATION