NMDC 2021-22 Annual Report Analysis

Sat, 20 Aug

NMDC 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.

NMDC Income Statement Analysis

• Operating income during the year rose 68.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 43.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 48.6% in FY22 as against 57.2% in FY21.
• Depreciation charges increased by 25.9% and finance costs increased by 132.4% YoY, respectively.
• Other income grew by 104.4% YoY.
• Net profit for the year grew by 50.3% YoY.
• Net profit margins during the year declined from 40.6% in FY21 to 36.3% in FY22.

NMDC Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	153,701	258,817	68.4%
Other income	Rs m	3,516	7,185	104.4%
Total Revenues	Rs m	157,217	266,003	69.2%
Gross profit	Rs m	87,893	125,825	43.2%
Depreciation	Rs m	2,285	2,877	25.9%
Interest	Rs m	168	391	132.4%
Profit before tax	Rs m	88,955	129,742	45.9%
Tax	Rs m	26,485	35,823	35.3%
Profit after tax	Rs m	62,471	93,920	50.3%
Gross profit margin	%	57.2	48.6
Effective tax rate	%	29.8	27.6
Net profit margin	%	40.6	36.3

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NMDC Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 148 billion as compared to Rs 96 billion in FY21, thereby witnessing an increase of 54.7%.
• Long-term debt stood at Rs 17 billion as compared to Rs 5 billion during FY21, a growth of 218.5%.
• Current assets rose 60% and stood at Rs 237 billion, while fixed assets rose 10% and stood at Rs 285 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 522 billion as against Rs 407 billion during FY21, thereby witnessing a growth of 28%.

NMDC Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	298,841	349,869	17.1
Current Liabilities	Rs m	95,925	148,379	54.7
Long-term Debt	Rs m	5,238	16,682	218.5
Total Liabilities	Rs m	407,087	522,241	28.3
Current assets	Rs m	147,874	237,143	60.4
Fixed Assets	Rs m	259,213	285,098	10.0
Total Assets	Rs m	407,087	522,241	28.3

NMDC Cash Flow Statement Analysis

• NMDC's cash flow from operating activities (CFO) during FY22 stood at Rs 76 billion, an improvement of 5.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -51 billion, an improvement of 17.4% on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -29 billion on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -3 billion from the Rs 4 billion net cash flows seen during FY21.

NMDC 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	72,661	76,394	5.1%
Cash Flow from Investing Activities	Rs m	-43,163	-50,658	-
Cash Flow from Financing Activities	Rs m	-25,913	-29,163	-
Net Cash Flow	Rs m	3,585	-3,427	-

Current Valuations for NMDC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 32.0, an improvement from the EPS of Rs 21.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 116.0, stands at 4.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.0 times, while the price to sales ratio stands at 1.3 times.
• The company's price to cash flow (P/CF) ratio stood at 5.2 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	52.4	88.3
TTM Earnings per share	Rs	21.3	32.0
Diluted earnings per share	Rs	21.3	32.0
Price to Cash Flow	x	6.1	5.2
TTM P/E ratio	x	6.3	4.4
Price / Book Value ratio	x	1.0	1.4
Market Cap	Rs m	307,421	499,595
Dividends per share (Unadj.)	Rs	7.8	14.7

Ratio Analysis for NMDC

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.6x during FY22, from 1.5x 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 deteriorated and stood at 333.2x during FY22, from 530.2x 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 26.8% during FY22, from 20.9% 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 35.5% during FY22, from 29.3% 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 18.1% during FY22, from 15.4% 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	1.5	1.6
Debtors’ Days	Days	5	4
Interest coverage	x	530.2	333.2
Debt to equity ratio	x	0.0	0.0
Return on assets	%	15.4	18.1
Return on equity	%	20.9	26.8
Return on capital employed	%	29.3	35.5

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

NMDC Share Price Performance

Over the last one year, NMDC share price has moved down from Rs 151.1 to Rs 116.0, registering a loss of Rs 35.1 or around 23.2%.

Overall, the S&P BSE SENSEX is up 7.2% over the year.

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

Read: Latest Annual Report Analysis of NMDC