FUTURE ENTERPRISES 2020-21 Annual Report Analysis

Wed, 31 Mar

FUTURE ENTERPRISES 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.

FUTURE ENTERPRISES Income Statement Analysis

• Operating income during the year fell 73.8% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 86.8% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 11.5% in FY21 as against 22.8% in FY20.
• Depreciation charges decreased by 24.5% and finance costs increased by 13.6% YoY, respectively.
• Other income grew by 150.1% YoY.
• Net profit for the year grew by 224.7% YoY.
• Net profit margins during the year declined from 6.9% in FY20 to 85.7% in FY21.

FUTURE ENTERPRISES Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	55,409	14,504	-73.8%
Other income	Rs m	674	1,685	150.1%
Total Revenues	Rs m	56,083	16,190	-71.1%
Gross profit	Rs m	12,653	1,675	-86.8%
Depreciation	Rs m	10,337	7,809	-24.5%
Interest	Rs m	7,190	8,167	13.6%
Profit before tax	Rs m	-4,201	-12,616	200.3%
Tax	Rs m	-370	-179	-51.6%
Profit after tax	Rs m	-3,831	-12,437	224.7%
Gross profit margin	%	22.8	11.5
Effective tax rate	%	8.8	1.4
Net profit margin	%	-6.9	-85.7

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FUTURE ENTERPRISES Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 47 billion as compared to Rs 60 billion in FY20, thereby witnessing an decrease of -22.6%.
• Long-term debt down at Rs 39 billion as compared to Rs 51 billion during FY20, a fall of 22.6%.
• Current assets rose 10% and stood at Rs 52 billion, while fixed assets fell 39% and stood at Rs 67 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 119 billion as against Rs 157 billion during FY20, thereby witnessing a fall of 24%.

FUTURE ENTERPRISES Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	37,444	26,161	-30.1
Current Liabilities	Rs m	60,194	46,600	-22.6
Long-term Debt	Rs m	50,827	39,325	-22.6
Total Liabilities	Rs m	156,658	118,556	-24.3
Current assets	Rs m	47,013	51,573	9.7
Fixed Assets	Rs m	109,645	66,983	-38.9
Total Assets	Rs m	156,658	118,556	-24.3

FUTURE ENTERPRISES Cash Flow Statement Analysis

• FUTURE ENTERPRISES's cash flow from operating activities (CFO) during FY21 stood at Rs -30 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs 36 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -6 billion, an improvement of 32% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 268 million from the Rs -1 billion net cash flows seen during FY20.

FUTURE ENTERPRISES 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	24,577	-30,059	-
Cash Flow from Investing Activities	Rs m	-17,754	35,877	-
Cash Flow from Financing Activities	Rs m	-8,163	-5,549	-
Net Cash Flow	Rs m	-1,340	268	-

Current Valuations for FUTURE ENTERPRISES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -25.2, an decline from the EPS of Rs -7.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 8.0, stands at -0.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.1 times, while the price to sales ratio stands at 0.3 times.
• The company's price to cash flow (P/CF) ratio stood at -1.6 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	112.1	29.3
TTM Earnings per share	Rs	-7.7	-25.2
Diluted earnings per share	Rs	-8.4	-27.3
Price to Cash Flow	x	0.6	-1.6
TTM P/E ratio	x	-1.0	-0.3
Price / Book Value ratio	x	0.3	0.3
Market Cap	Rs m	11,851	7,365
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for FUTURE ENTERPRISES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.1x during FY21, from 0.8x 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 -0.5x during FY21, from 0.4x 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 -47.5% during FY21, from -10.2% 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 -6.8% during FY21, from 3.4% 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 -3.6% during FY21, from 2.1% 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	0.8	1.1
Debtors’ Days	Days	15	70
Interest coverage	x	0.4	-0.5
Debt to equity ratio	x	1.4	1.5
Return on assets	%	2.1	-3.6
Return on equity	%	-10.2	-47.5
Return on capital employed	%	3.4	-6.8

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

FUTURE ENTERPRISES Share Price Performance

Over the last one year, FUTURE ENTERPRISES share price has moved down from Rs 8.7 to Rs 8.0, registering a loss of Rs 0.7 or around 8.0%.

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

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