RHI MAGNESITA 2020-21 Annual Report Analysis

Wed, 31 Mar

RHI MAGNESITA 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.

RHI MAGNESITA Income Statement Analysis

• Operating income during the year fell 1.2% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 2.8% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 15.3% in FY21 as against 15.5% in FY20.
• Depreciation charges increased by 13.8% and finance costs decreased by 48.1% YoY, respectively.
• Other income grew by 19.0% YoY.
• Net profit for the year grew by 0.5% YoY.
• Net profit margins during the year grew from 9.8% in FY20 to 10.0% in FY21.

RHI MAGNESITA Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	13,876	13,704	-1.2%
Other income	Rs m	104	123	19.0%
Total Revenues	Rs m	13,979	13,827	-1.1%
Gross profit	Rs m	2,152	2,091	-2.8%
Depreciation	Rs m	262	298	13.8%
Interest	Rs m	135	70	-48.1%
Profit before tax	Rs m	1,858	1,846	-0.7%
Tax	Rs m	499	480	-3.9%
Profit after tax	Rs m	1,359	1,366	0.5%
Gross profit margin	%	15.5	15.3
Effective tax rate	%	26.9	26.0
Net profit margin	%	9.8	10.0

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RHI MAGNESITA Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 7 billion as compared to Rs 6 billion in FY20, thereby witnessing an increase of 26.7%.
• Long-term debt stood at Rs 598 million as compared to Rs 576 million during FY20, a growth of 3.8%.
• Current assets rose 18% and stood at Rs 13 billion, while fixed assets rose 23% and stood at Rs 3 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 16 billion as against Rs 13 billion during FY20, thereby witnessing a growth of 19%.

RHI MAGNESITA Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	6,992	8,017	14.7
Current Liabilities	Rs m	5,627	7,130	26.7
Long-term Debt	Rs m	576	598	3.8
Total Liabilities	Rs m	13,236	15,795	19.3
Current assets	Rs m	10,789	12,783	18.5
Fixed Assets	Rs m	2,448	3,013	23.1
Total Assets	Rs m	13,236	15,795	19.3

RHI MAGNESITA Cash Flow Statement Analysis

• RHI MAGNESITA's cash flow from operating activities (CFO) during FY21 stood at Rs 2 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -788 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -537 million, an improvement of 54% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 330 million from the Rs 813 million net cash flows seen during FY20.

RHI MAGNESITA 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	1,732	1,654	-4.5%
Cash Flow from Investing Activities	Rs m	260	-788	-
Cash Flow from Financing Activities	Rs m	-1,179	-537	-
Net Cash Flow	Rs m	813	330	-59.5%

Current Valuations for RHI MAGNESITA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 11.4, an improvement from the EPS of Rs 11.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 226.7, stands at 29.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.6 times, while the price to sales ratio stands at 2.0 times.
• The company's price to cash flow (P/CF) ratio stood at 13.4 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	115.5	114.1
TTM Earnings per share	Rs	11.3	11.4
Diluted earnings per share	Rs	8.4	8.5
Price to Cash Flow	x	11.5	13.4
TTM P/E ratio	x	18.6	29.2
Price / Book Value ratio	x	3.2	2.8
Market Cap	Rs m	22,646	22,319
Dividends per share (Unadj.)	Rs	2.5	2.5

Ratio Analysis for RHI MAGNESITA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.8x during FY21, from 1.9x 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 27.2x during FY21, from 14.7x 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 17.0% during FY21, from 19.4% 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 22.2% during FY21, from 26.3% 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 11.3% 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	1.9	1.8
Debtors’ Days	Days	874	873
Interest coverage	x	14.7	27.2
Debt to equity ratio	x	0.1	0.1
Return on assets	%	11.3	9.1
Return on equity	%	19.4	17.0
Return on capital employed	%	26.3	22.2

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

RHI MAGNESITA Share Price Performance

Over the last one year, RHI MAGNESITA share price has moved up from Rs 116.0 to Rs 226.7, registering a gain of Rs 110.7 or around 95.4%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 14,350.6 (up 0.4%). Over the last one year it has moved up from 5,713.3 to 14,350.6, a gain of 8,637 points (up 151.2%).

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

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

Read: Latest Annual Report Analysis of RHI MAGNESITA