NAHAR SPINNING M 2020-21 Annual Report Analysis

Wed, 31 Mar

NAHAR SPINNING M 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.

NAHAR SPINNING M Income Statement Analysis

• Operating income during the year rose 1.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 212.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 9.4% in FY21 as against 3.0% in FY20.
• Depreciation charges increased by 0.5% and finance costs increased by 3.6% YoY, respectively.
• Other income declined by 4.3% YoY.
• Net profit for the year declined by 178.1% YoY.
• Net profit margins during the year grew from 2.5% in FY20 to 2.0% in FY21.

NAHAR SPINNING M Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	20,827	21,119	1.4%
Other income	Rs m	73	70	-4.3%
Total Revenues	Rs m	20,900	21,188	1.4%
Gross profit	Rs m	633	1,980	212.8%
Depreciation	Rs m	816	820	0.5%
Interest	Rs m	670	694	3.6%
Profit before tax	Rs m	-781	535	-168.6%
Tax	Rs m	-250	121	-148.5%
Profit after tax	Rs m	-531	414	-178.1%
Gross profit margin	%	3.0	9.4
Effective tax rate	%	32.0	22.6
Net profit margin	%	-2.5	2.0

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NAHAR SPINNING M Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 11 billion as compared to Rs 9 billion in FY20, thereby witnessing an increase of 18.9%.
• Long-term debt stood at Rs 2 billion as compared to Rs 2 billion during FY20, a growth of 13.4%.
• Current assets rose 25% and stood at Rs 14 billion, while fixed assets rose 2% and stood at Rs 8 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 22 billion as against Rs 19 billion during FY20, thereby witnessing a growth of 15%.

NAHAR SPINNING M Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	8,191	8,979	9.6
Current Liabilities	Rs m	9,440	11,226	18.9
Long-term Debt	Rs m	1,686	1,911	13.4
Total Liabilities	Rs m	19,380	22,346	15.3
Current assets	Rs m	11,082	13,880	25.2
Fixed Assets	Rs m	8,298	8,466	2.0
Total Assets	Rs m	19,380	22,346	15.3

NAHAR SPINNING M Cash Flow Statement Analysis

• NAHAR SPINNING M's cash flow from operating activities (CFO) during FY21 stood at Rs -853 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -532 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs 1 billion, an improvement of 596% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -28 million from the Rs 26 million net cash flows seen during FY20.

NAHAR SPINNING M 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	612	-853	-
Cash Flow from Investing Activities	Rs m	-781	-532	-
Cash Flow from Financing Activities	Rs m	195	1,357	595.9%
Net Cash Flow	Rs m	26	-28	-

Current Valuations for NAHAR SPINNING M

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 11.5, an improvement from the EPS of Rs -14.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 103.9, stands at 9.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.4 times, while the price to sales ratio stands at 0.2 times.
• The company's price to cash flow (P/CF) ratio stood at 2.1 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	577.4	585.5
TTM Earnings per share	Rs	-14.7	11.5
Diluted earnings per share	Rs	-14.7	11.5
Price to Cash Flow	x	3.3	2.1
TTM P/E ratio	x	-1.8	9.0
Price / Book Value ratio	x	0.3	0.3
Market Cap	Rs m	2,126	2,647
Dividends per share (Unadj.)	Rs	0.0	1.5

Ratio Analysis for NAHAR SPINNING M

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.2x during FY21, from 1.2x 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 improved and stood at 1.8x during FY21, from -0.2x 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 4.6% during FY21, from -6.5% 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 improved and stood at 11.3% during FY21, from -1.1% 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 5.0% during FY21, from 0.7% 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	1.2	1.2
Debtors’ Days	Days	476	535
Interest coverage	x	-0.2	1.8
Debt to equity ratio	x	0.2	0.2
Return on assets	%	0.7	5.0
Return on equity	%	-6.5	4.6
Return on capital employed	%	-1.1	11.3

To see how NAHAR SPINNING M has performed over the last 5 years, please visit here.

NAHAR SPINNING M Share Price Performance

Over the last one year, NAHAR SPINNING M share price has moved up from Rs 26.0 to Rs 103.9, registering a gain of Rs 77.9 or around 299.6%.

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

(To know more, check out historical annual results for NAHAR SPINNING M and quarterly results for NAHAR SPINNING M)

Read: Latest Annual Report Analysis of NAHAR SPINNING M