NEOGEN CHEMICALS 2020-21 Annual Report Analysis

Wed, 31 Mar

NEOGEN CHEMICALS 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.

NEOGEN CHEMICALS Income Statement Analysis

• Operating income during the year rose 2.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 10.9% YoY during the fiscal. Operating profit margins witnessed a fall and down at 23.7% in FY21 as against 21.9% in FY20.
• Depreciation charges increased by 31.7% and finance costs increased by 15.5% YoY, respectively.
• Other income grew by 39.4% YoY.
• Net profit for the year grew by 8.4% YoY.
• Net profit margins during the year grew from 10.8% in FY20 to 11.4% in FY21.

NEOGEN CHEMICALS Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	2,646	2,720	2.8%
Other income	Rs m	1	1	39.4%
Total Revenues	Rs m	2,647	2,721	2.8%
Gross profit	Rs m	581	644	10.9%
Depreciation	Rs m	52	69	31.7%
Interest	Rs m	119	138	15.5%
Profit before tax	Rs m	410	438	6.9%
Tax	Rs m	124	129	3.6%
Profit after tax	Rs m	285	309	8.4%
Gross profit margin	%	21.9	23.7
Effective tax rate	%	30.4	29.4
Net profit margin	%	10.8	11.4

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NEOGEN CHEMICALS Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 2 billion as compared to Rs 1 billion in FY20, thereby witnessing an increase of 16.0%.
• Long-term debt stood at Rs 1 billion as compared to Rs 304 million during FY20, a growth of 282.5%.
• Current assets rose 4% and stood at Rs 2 billion, while fixed assets rose 103% and stood at Rs 3 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 5 billion as against Rs 4 billion during FY20, thereby witnessing a growth of 39%.

NEOGEN CHEMICALS Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	1,562	1,830	17.1
Current Liabilities	Rs m	1,499	1,739	16.0
Long-term Debt	Rs m	304	1,161	282.5
Total Liabilities	Rs m	3,549	4,920	38.6
Current assets	Rs m	2,311	2,402	3.9
Fixed Assets	Rs m	1,238	2,518	103.4
Total Assets	Rs m	3,549	4,920	38.6

NEOGEN CHEMICALS Cash Flow Statement Analysis

• NEOGEN CHEMICALS's cash flow from operating activities (CFO) during FY21 stood at Rs 836 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -1 billion, an improvement of 370.0% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs 507 million on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -3 million from the Rs -5 million net cash flows seen during FY20.

NEOGEN CHEMICALS 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	-345	836	-
Cash Flow from Investing Activities	Rs m	-286	-1,346	-
Cash Flow from Financing Activities	Rs m	626	507	-19.0%
Net Cash Flow	Rs m	-5	-3	-

Current Valuations for NEOGEN CHEMICALS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 13.3, an improvement from the EPS of Rs 12.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 864.3, stands at 68.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 11.8 times, while the price to sales ratio stands at 7.4 times.
• The company's price to cash flow (P/CF) ratio stood at 39.1 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	113.4	116.6
TTM Earnings per share	Rs	12.2	13.3
Diluted earnings per share	Rs	11.4	12.4
Price to Cash Flow	x	25.9	39.1
TTM P/E ratio	x	30.7	68.9
Price / Book Value ratio	x	5.9	8.1
Market Cap	Rs m	9,280	14,795
Dividends per share (Unadj.)	Rs	2.0	2.3

Ratio Analysis for NEOGEN CHEMICALS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.4x during FY21, from 1.5x 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 4.2x during FY21, from 4.4x 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 declined and down at 16.9% during FY21, from 18.3% 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 19.3% during FY21, from 28.4% 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 9.1% during FY21, from 11.4% 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	1.5	1.4
Debtors’ Days	Days	1,038	1,054
Interest coverage	x	4.4	4.2
Debt to equity ratio	x	0.2	0.6
Return on assets	%	11.4	9.1
Return on equity	%	18.3	16.9
Return on capital employed	%	28.4	19.3

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

NEOGEN CHEMICALS Share Price Performance

Over the last one year, NEOGEN CHEMICALS share price has moved up from Rs 351.1 to Rs 864.3, registering a gain of Rs 513.2 or around 146.2%.

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

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

Read: Latest Annual Report Analysis of NEOGEN CHEMICALS