NCC 2020-21 Annual Report Analysis

Wed, 31 Mar

NCC 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.

NCC Income Statement Analysis

• Operating income during the year fell 10.7% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 12.6% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 11.4% in FY21 as against 11.7% in FY20.
• Depreciation charges decreased by 9.0% and finance costs decreased by 13.4% YoY, respectively.
• Other income grew by 2.6% YoY.
• Net profit for the year declined by 13.2% YoY.
• Net profit margins during the year declined from 3.6% in FY20 to 3.5% in FY21.

NCC Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	89,011	79,494	-10.7%
Other income	Rs m	1,130	1,159	2.6%
Total Revenues	Rs m	90,141	80,653	-10.5%
Gross profit	Rs m	10,376	9,065	-12.6%
Depreciation	Rs m	1,992	1,813	-9.0%
Interest	Rs m	5,539	4,799	-13.4%
Profit before tax	Rs m	3,975	3,612	-9.1%
Tax	Rs m	728	795	9.2%
Profit after tax	Rs m	3,247	2,818	-13.2%
Gross profit margin	%	11.7	11.4
Effective tax rate	%	18.3	22.0
Net profit margin	%	3.6	3.5

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NCC Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 78 billion as compared to Rs 82 billion in FY20, thereby witnessing an decrease of -4.1%.
• Long-term debt down at Rs 2 billion as compared to Rs 2 billion during FY20, a fall of 29.3%.
• Current assets fell 1% and stood at Rs 108 billion, while fixed assets fell 1% and stood at Rs 27 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 135 billion as against Rs 136 billion during FY20, thereby witnessing a fall of 1%.

NCC Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	49,065	51,448	4.9
Current Liabilities	Rs m	81,609	78,242	-4.1
Long-term Debt	Rs m	2,398	1,696	-29.3
Total Liabilities	Rs m	135,971	134,823	-0.8
Current assets	Rs m	108,646	107,691	-0.9
Fixed Assets	Rs m	27,325	27,131	-0.7
Total Assets	Rs m	135,971	134,823	-0.8

NCC Cash Flow Statement Analysis

• NCC's cash flow from operating activities (CFO) during FY21 stood at Rs 8 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -2 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -6 billion, an improvement of 47% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 772 million from the Rs -1 billion net cash flows seen during FY20.

NCC 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	9,314	8,243	-11.5%
Cash Flow from Investing Activities	Rs m	106	-1,890	-
Cash Flow from Financing Activities	Rs m	-10,469	-5,581	-
Net Cash Flow	Rs m	-1,050	772	-

Current Valuations for NCC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 4.6, an decline from the EPS of Rs 5.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 79.0, stands at 17.1 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 0.6 times.
• The company's price to cash flow (P/CF) ratio stood at 7.7 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	146.0	130.4
TTM Earnings per share	Rs	5.3	4.6
Diluted earnings per share	Rs	5.3	4.6
Price to Cash Flow	x	2.2	7.7
TTM P/E ratio	x	3.5	17.1
Price / Book Value ratio	x	0.8	0.7
Market Cap	Rs m	41,180	35,447
Dividends per share (Unadj.)	Rs	0.2	0.8

Ratio Analysis for NCC

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x during FY21, from 1.3x 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 1.8x during FY21, from 1.7x 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 5.5% during FY21, from 6.6% 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 15.8% during FY21, from 18.5% 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 declined and down at 5.6% during FY21, from 6.5% 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	1.3	1.4
Debtors’ Days	Days	11	13
Interest coverage	x	1.7	1.8
Debt to equity ratio	x	0.0	0.0
Return on assets	%	6.5	5.6
Return on equity	%	6.6	5.5
Return on capital employed	%	18.5	15.8

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

NCC Share Price Performance

Over the last one year, NCC share price has moved up from Rs 18.8 to Rs 79.0, registering a gain of Rs 60.2 or around 320.2%.

Meanwhile, the S&P BSE REALTY Index is trading at Rs 2,670.3 (up 1.9%). Over the last one year it has moved up from 1,353.7 to 2,670.3, a gain of 1,317 points (up 97.3%).

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

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

Read: Latest Annual Report Analysis of NCC