NCC 2021-22 Annual Report Analysis

Thu, 4 Aug

NCC 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.

NCC Income Statement Analysis

• Operating income during the year rose 40.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 35.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 11.0% in FY22 as against 11.4% in FY21.
• Depreciation charges increased by 3.0% and finance costs decreased by 0.4% YoY, respectively.
• Other income declined by 39.0% YoY.
• Net profit for the year grew by 74.8% YoY.
• Net profit margins during the year grew from 3.5% in FY21 to 4.4% in FY22.

NCC Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	79,494	111,380	40.1%
Other income	Rs m	1,159	707	-39.0%
Total Revenues	Rs m	80,653	112,087	39.0%
Gross profit	Rs m	9,065	12,274	35.4%
Depreciation	Rs m	1,813	1,867	3.0%
Interest	Rs m	4,799	4,781	-0.4%
Profit before tax	Rs m	3,612	6,333	75.3%
Tax	Rs m	795	1,407	77.0%
Profit after tax	Rs m	2,818	4,926	74.8%
Gross profit margin	%	11.4	11.0
Effective tax rate	%	22.0	22.2
Net profit margin	%	3.5	4.4

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NCC Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 84 billion as compared to Rs 78 billion in FY21, thereby witnessing an increase of 6.8%.
• Long-term debt down at Rs 1 billion as compared to Rs 2 billion during FY21, a fall of 29.1%.
• Current assets rose 6% and stood at Rs 115 billion, while fixed assets rose 8% and stood at Rs 29 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 144 billion as against Rs 135 billion during FY21, thereby witnessing a growth of 7%.

NCC Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	51,448	55,762	8.4
Current Liabilities	Rs m	78,242	83,581	6.8
Long-term Debt	Rs m	1,696	1,202	-29.1
Total Liabilities	Rs m	134,823	143,937	6.8
Current assets	Rs m	107,691	114,526	6.3
Fixed Assets	Rs m	27,131	29,411	8.4
Total Assets	Rs m	134,823	143,937	6.8

NCC Cash Flow Statement Analysis

• NCC's cash flow from operating activities (CFO) during FY22 stood at Rs 14 billion, an improvement of 68.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -660 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -13 billion on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 749 million from the Rs 772 million net cash flows seen during FY21.

NCC 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	8,418	14,156	68.1%
Cash Flow from Investing Activities	Rs m	-2,066	-660	-
Cash Flow from Financing Activities	Rs m	-5,581	-12,746	-
Net Cash Flow	Rs m	772	749	-3.0%

Current Valuations for NCC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 8.1, an improvement from the EPS of Rs 4.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 61.6, stands at 7.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.7 times, while the price to sales ratio stands at 0.3 times.
• The company's price to cash flow (P/CF) ratio stood at 6.9 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	130.4	182.6
TTM Earnings per share	Rs	4.6	8.1
Diluted earnings per share	Rs	4.5	7.8
Price to Cash Flow	x	10.7	6.9
TTM P/E ratio	x	17.6	7.8
Price / Book Value ratio	x	0.7	0.8
Market Cap	Rs m	35,447	47,034
Dividends per share (Unadj.)	Rs	0.8	2.0

Ratio Analysis for NCC

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.4x during FY22, from 1.4x 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 improved and stood at 2.3x during FY22, from 1.8x 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 8.8% during FY22, from 5.5% 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 19.5% during FY22, from 15.8% 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 6.7% during FY22, from 5.6% 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	1.4	1.4
Debtors’ Days	Days	13	8
Interest coverage	x	1.8	2.3
Debt to equity ratio	x	0.0	0.0
Return on assets	%	5.6	6.7
Return on equity	%	5.5	8.8
Return on capital employed	%	15.8	19.5

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 down from Rs 87.0 to Rs 61.6, registering a loss of Rs 25.5 or around 29.3%.

Meanwhile, the S&P BSE REALTY Index is trading at Rs 3,473.4 (down 1.2%). Over the last one year it has moved up from 3,286.8 to 3,473.4, a gain of 187 points (up 5.7%).

Overall, the S&P BSE SENSEX is up 10.0% 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