PATEL ENGINEERING 2020-21 Annual Report Analysis

Wed, 31 Mar

PATEL ENGINEERING 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.

PATEL ENGINEERING Income Statement Analysis

• Operating income during the year fell 28.5% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 90.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 1.1% in FY21 as against 8.5% in FY20.
• Depreciation charges increased by 8.8% and finance costs increased by 50.7% YoY, respectively.
• Other income declined by 36.2% YoY.
• Net profit for the year declined by 971.9% YoY.
• Net profit margins during the year declined from 1.2% in FY20 to 14.9% in FY21.

PATEL ENGINEERING Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	25,559	18,280	-28.5%
Other income	Rs m	1,712	1,091	-36.2%
Total Revenues	Rs m	27,271	19,372	-29.0%
Gross profit	Rs m	2,160	205	-90.5%
Depreciation	Rs m	662	720	8.8%
Interest	Rs m	2,663	4,014	50.7%
Profit before tax	Rs m	547	-3,438	-728.3%
Tax	Rs m	234	-709	-402.7%
Profit after tax	Rs m	313	-2,729	-971.9%
Gross profit margin	%	8.5	1.1
Effective tax rate	%	42.8	20.6
Net profit margin	%	1.2	-14.9

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PATEL ENGINEERING Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 35 billion as compared to Rs 40 billion in FY20, thereby witnessing an decrease of -12.5%.
• Long-term debt down at Rs 8 billion as compared to Rs 9 billion during FY20, a fall of 15.2%.
• Current assets rose 3% and stood at Rs 51 billion, while fixed assets fell 15% and stood at Rs 28 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 79 billion as against Rs 82 billion during FY20, thereby witnessing a fall of 4%.

PATEL ENGINEERING Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	25,457	23,194	-8.9
Current Liabilities	Rs m	40,108	35,095	-12.5
Long-term Debt	Rs m	9,194	7,794	-15.2
Total Liabilities	Rs m	82,108	78,868	-3.9
Current assets	Rs m	49,904	51,336	2.9
Fixed Assets	Rs m	32,203	27,532	-14.5
Total Assets	Rs m	82,108	78,868	-3.9

PATEL ENGINEERING Cash Flow Statement Analysis

• PATEL ENGINEERING's cash flow from operating activities (CFO) during FY21 stood at Rs 4 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs 69 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -3 billion, an improvement of 15% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 848 million from the Rs -68 million net cash flows seen during FY20.

PATEL ENGINEERING 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	4,073	3,887	-4.6%
Cash Flow from Investing Activities	Rs m	-474	69	-
Cash Flow from Financing Activities	Rs m	-3,667	-3,108	-
Net Cash Flow	Rs m	-68	848	-

Current Valuations for PATEL ENGINEERING

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -5.9, an decline from the EPS of Rs 0.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 11.8, stands at -2.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.2 times, while the price to sales ratio stands at 0.3 times.
• The company's price to cash flow (P/CF) ratio stood at -3.0 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	62.6	39.3
TTM Earnings per share	Rs	0.8	-5.9
Diluted earnings per share	Rs	0.7	-5.7
Price to Cash Flow	x	4.4	-3.0
TTM P/E ratio	x	17.2	-2.1
Price / Book Value ratio	x	0.3	0.3
Market Cap	Rs m	7,551	6,109
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for PATEL ENGINEERING

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.5x 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 deteriorated and stood at 0.1x during FY21, from 1.2x 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 declined and down at -11.8% during FY21, from 1.2% 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 1.9% during FY21, from 9.3% 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 1.6% during FY21, from 3.6% 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	1.5
Debtors’ Days	Days	47	87
Interest coverage	x	1.2	0.1
Debt to equity ratio	x	0.4	0.3
Return on assets	%	3.6	1.6
Return on equity	%	1.2	-11.8
Return on capital employed	%	9.3	1.9

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

PATEL ENGINEERING Share Price Performance

Over the last one year, PATEL ENGINEERING share price has moved up from Rs 9.0 to Rs 11.8, registering a gain of Rs 2.8 or around 30.7%.

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 PATEL ENGINEERING and quarterly results for PATEL ENGINEERING)

Read: Latest Annual Report Analysis of PATEL ENGINEERING