POKARNA 2020-21 Annual Report Analysis

Wed, 31 Mar

POKARNA 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.

POKARNA Income Statement Analysis

• Operating income during the year fell 25.1% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 37.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 28.0% in FY21 as against 33.4% in FY20.
• Depreciation charges decreased by 7.9% and finance costs decreased by 4.6% YoY, respectively.
• Other income grew by 10.4% YoY.
• Net profit for the year declined by 60.0% YoY.
• Net profit margins during the year declined from 18.0% in FY20 to 9.6% in FY21.

POKARNA Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	3,939	2,950	-25.1%
Other income	Rs m	55	61	10.4%
Total Revenues	Rs m	3,994	3,011	-24.6%
Gross profit	Rs m	1,317	827	-37.2%
Depreciation	Rs m	232	214	-7.9%
Interest	Rs m	232	221	-4.6%
Profit before tax	Rs m	908	452	-50.2%
Tax	Rs m	201	169	-15.7%
Profit after tax	Rs m	707	283	-60.0%
Gross profit margin	%	33.4	28.0
Effective tax rate	%	22.1	37.4
Net profit margin	%	18.0	9.6

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POKARNA Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 2 billion as compared to Rs 2 billion in FY20, thereby witnessing an increase of 25.8%.
• Long-term debt stood at Rs 2 billion as compared to Rs 2 billion during FY20, a growth of 1.2%.
• Current assets rose 13% and stood at Rs 2 billion, while fixed assets rose 7% and stood at Rs 8 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 10 billion as against Rs 9 billion during FY20, thereby witnessing a growth of 8%.

POKARNA Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	3,387	3,656	7.9
Current Liabilities	Rs m	1,650	2,076	25.8
Long-term Debt	Rs m	2,237	2,262	1.2
Total Liabilities	Rs m	9,269	10,034	8.3
Current assets	Rs m	1,855	2,088	12.6
Fixed Assets	Rs m	7,414	7,946	7.2
Total Assets	Rs m	9,269	10,034	8.3

POKARNA Cash Flow Statement Analysis

• POKARNA's cash flow from operating activities (CFO) during FY21 stood at Rs 983 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -860 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -125 million on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 14 million from the Rs -71 million net cash flows seen during FY20.

POKARNA 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	3,793	983	-74.1%
Cash Flow from Investing Activities	Rs m	-3,905	-860	-
Cash Flow from Financing Activities	Rs m	-7	-125	-
Net Cash Flow	Rs m	-71	14	-

Current Valuations for POKARNA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 9.1, an decline from the EPS of Rs 22.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 263.3, stands at 28.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.2 times, while the price to sales ratio stands at 2.8 times.
• The company's price to cash flow (P/CF) ratio stood at 10.1 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	127.1	95.2
TTM Earnings per share	Rs	22.8	9.1
Diluted earnings per share	Rs	22.8	9.1
Price to Cash Flow	x	1.6	10.1
TTM P/E ratio	x	2.2	28.9
Price / Book Value ratio	x	1.1	1.4
Market Cap	Rs m	3,810	5,002
Dividends per share (Unadj.)	Rs	0.6	0.6

Ratio Analysis for POKARNA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.0x during FY21, from 1.1x 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 3.0x during FY21, from 4.9x 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 7.7% during FY21, from 20.9% 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 11.4% during FY21, from 20.3% 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 5.0% during FY21, from 10.1% 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	1.1	1.0
Debtors’ Days	Days	313	537
Interest coverage	x	4.9	3.0
Debt to equity ratio	x	0.7	0.6
Return on assets	%	10.1	5.0
Return on equity	%	20.9	7.7
Return on capital employed	%	20.3	11.4

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

POKARNA Share Price Performance

Over the last one year, POKARNA share price has moved up from Rs 49.3 to Rs 263.3, registering a gain of Rs 214.0 or around 434.5%.

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 POKARNA and quarterly results for POKARNA)

Read: Latest Annual Report Analysis of POKARNA