PRAJ IND.LTD 2020-21 Annual Report Analysis

Wed, 31 Mar

PRAJ IND.LTD 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.

PRAJ IND.LTD Income Statement Analysis

• Operating income during the year rose 18.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 43.9% YoY during the fiscal. Operating profit margins witnessed a fall and down at 8.6% in FY21 as against 7.1% in FY20.
• Depreciation charges increased by 1.3% and finance costs decreased by 7.7% YoY, respectively.
• Other income declined by 14.3% YoY.
• Net profit for the year grew by 15.1% YoY.
• Net profit margins during the year declined from 6.4% in FY20 to 6.2% in FY21.

PRAJ IND.LTD Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	11,062	13,126	18.7%
Other income	Rs m	300	257	-14.3%
Total Revenues	Rs m	11,362	13,383	17.8%
Gross profit	Rs m	781	1,123	43.9%
Depreciation	Rs m	218	221	1.3%
Interest	Rs m	31	29	-7.7%
Profit before tax	Rs m	831	1,131	36.0%
Tax	Rs m	127	320	152.4%
Profit after tax	Rs m	704	811	15.1%
Gross profit margin	%	7.1	8.6
Effective tax rate	%	15.3	28.3
Net profit margin	%	6.4	6.2

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PRAJ IND.LTD Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 8 billion as compared to Rs 4 billion in FY20, thereby witnessing an increase of 86.7%.
• Current assets rose 58% and stood at Rs 12 billion, while fixed assets fell 4% and stood at Rs 3 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 16 billion as against Rs 11 billion during FY20, thereby witnessing a growth of 38%.

PRAJ IND.LTD Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	7,173	8,000	11.5
Current Liabilities	Rs m	4,094	7,643	86.7
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	11,436	15,834	38.5
Current assets	Rs m	7,799	12,354	58.4
Fixed Assets	Rs m	3,637	3,480	-4.3
Total Assets	Rs m	11,436	15,834	38.5

PRAJ IND.LTD Cash Flow Statement Analysis

• PRAJ IND.LTD's cash flow from operating activities (CFO) during FY21 stood at Rs 2 billion, an improvement of 1,434.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -2 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -63 million, an improvement of 94% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 553 million from the Rs -177 million net cash flows seen during FY20.

PRAJ IND.LTD 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	147	2,251	1,434.2%
Cash Flow from Investing Activities	Rs m	621	-1,643	-
Cash Flow from Financing Activities	Rs m	-980	-63	-
Net Cash Flow	Rs m	-177	553	-

Current Valuations for PRAJ IND.LTD

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 4.4, an improvement from the EPS of Rs 3.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 194.7, stands at 44.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.5 times, while the price to sales ratio stands at 2.7 times.
• The company's price to cash flow (P/CF) ratio stood at 22.5 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	60.4	71.6
TTM Earnings per share	Rs	3.8	4.4
Diluted earnings per share	Rs	3.8	4.4
Price to Cash Flow	x	11.0	22.5
TTM P/E ratio	x	14.4	44.1
Price / Book Value ratio	x	2.6	2.9
Market Cap	Rs m	18,421	23,233
Dividends per share (Unadj.)	Rs	2.7	2.2

Ratio Analysis for PRAJ IND.LTD

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.6x 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 40.6x during FY21, from 27.9x 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 improved and stood at 10.1% during FY21, from 9.8% 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 improved and stood at 14.5% during FY21, from 12.0% 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 5.3% during FY21, from 6.4% 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	1.6
Debtors’ Days	Days	109	126
Interest coverage	x	27.9	40.6
Debt to equity ratio	x	0.0	0.0
Return on assets	%	6.4	5.3
Return on equity	%	9.8	10.1
Return on capital employed	%	12.0	14.5

To see how PRAJ IND.LTD has performed over the last 5 years, please visit here.

PRAJ IND.LTD Share Price Performance

Over the last one year, PRAJ IND.LTD share price has moved up from Rs 55.1 to Rs 194.7, registering a gain of Rs 139.6 or around 253.6%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 21,095.8 (down 0.4%). Over the last one year it has moved up from 10,979.5 to 21,095.8, a gain of 10,116 points (up 92.1%).

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

(To know more, check out historical annual results for PRAJ IND.LTD and quarterly results for PRAJ IND.LTD)

Read: Latest Annual Report Analysis of PRAJ IND.LTD