PIRAMAL ENTERPRISES 2020-21 Annual Report Analysis

Wed, 31 Mar

PIRAMAL ENTERPRISES 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.

PIRAMAL ENTERPRISES Income Statement Analysis

• Operating income during the year fell 11.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 9.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 58.7% in FY21 as against 47.6% in FY20.
• Depreciation charges increased by 7.8% and finance costs decreased by 20.9% YoY, respectively.
• Other income declined by 30.2% YoY.
• Net profit for the year declined by 329.4% YoY.
• Net profit margins during the year grew from 3.2% in FY20 to 8.4% in FY21.

PIRAMAL ENTERPRISES Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	144,231	128,094	-11.2%
Other income	Rs m	5,211	3,636	-30.2%
Total Revenues	Rs m	149,442	131,730	-11.9%
Gross profit	Rs m	68,631	75,231	9.6%
Depreciation	Rs m	5,203	5,609	7.8%
Interest	Rs m	53,206	42,085	-20.9%
Profit before tax	Rs m	15,433	31,173	102.0%
Tax	Rs m	20,117	20,429	1.6%
Profit after tax	Rs m	-4,684	10,744	-329.4%
Gross profit margin	%	47.6	58.7
Effective tax rate	%	130.4	65.5
Net profit margin	%	-3.2	8.4

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PIRAMAL ENTERPRISES Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 133 billion as compared to Rs 237 billion in FY20, thereby witnessing an decrease of -43.6%.
• Long-term debt stood at Rs 281 billion as compared to Rs 203 billion during FY20, a growth of 38.4%.
• Current assets rose 23% and stood at Rs 199 billion, while fixed assets rose 0% and stood at Rs 628 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 826 billion as against Rs 787 billion during FY20, thereby witnessing a growth of 5%.

PIRAMAL ENTERPRISES Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	305,716	340,180	11.3
Current Liabilities	Rs m	236,730	133,473	-43.6
Long-term Debt	Rs m	203,063	280,968	38.4
Total Liabilities	Rs m	786,990	826,493	5.0
Current assets	Rs m	161,131	198,674	23.3
Fixed Assets	Rs m	625,859	627,818	0.3
Total Assets	Rs m	786,990	826,493	5.0

PIRAMAL ENTERPRISES Cash Flow Statement Analysis

• PIRAMAL ENTERPRISES's cash flow from operating activities (CFO) during FY21 stood at Rs 37 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -28 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs 21 billion, an improvement of 116% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 30 billion from the Rs 20 billion net cash flows seen during FY20.

PIRAMAL ENTERPRISES 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	75,163	36,645	-51.2%
Cash Flow from Investing Activities	Rs m	74,687	-27,723	-
Cash Flow from Financing Activities	Rs m	-130,186	20,716	-
Net Cash Flow	Rs m	19,883	29,701	49.4%

Current Valuations for PIRAMAL ENTERPRISES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 47.6, an improvement from the EPS of Rs -20.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,752.0, stands at 38.9 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 3.1 times.
• The company's price to cash flow (P/CF) ratio stood at 19.4 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	639.5	567.9
TTM Earnings per share	Rs	-20.8	47.6
Diluted earnings per share	Rs	-19.6	45.0
Price to Cash Flow	x	431.9	19.4
TTM P/E ratio	x	-20.0	38.9
Price / Book Value ratio	x	1.3	0.9
Market Cap	Rs m	383,861	317,310
Dividends per share (Unadj.)	Rs	14.0	33.0

Ratio Analysis for PIRAMAL ENTERPRISES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.5x during FY21, from 0.7x 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 1.7x during FY21, from 1.3x 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 improved and stood at 3.2% during FY21, from -1.5% 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 11.8% during FY21, from 13.5% 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 6.4% during FY21, from 6.2% 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	0.7	1.5
Debtors’ Days	Days	3	4
Interest coverage	x	1.3	1.7
Debt to equity ratio	x	0.7	0.8
Return on assets	%	6.2	6.4
Return on equity	%	-1.5	3.2
Return on capital employed	%	13.5	11.8

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

PIRAMAL ENTERPRISES Share Price Performance

Over the last one year, PIRAMAL ENTERPRISES share price has moved up from Rs 938.8 to Rs 1,752.0, registering a gain of Rs 813.2 or around 86.6%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 21,328.2 (up 0.4%). Over the last one year it has moved up from 12,148.6 to 21,328.2, a gain of 9,180 points (up 75.6%).

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

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

Read: Latest Annual Report Analysis of PIRAMAL ENTERPRISES