RAIN INDUSTRIES 2019-20 Annual Report Analysis

Thu, 31 Dec

RAIN INDUSTRIES has announced its results for the year ended December 2020. Let us have a look at the detailed performance review of the company during FY19-20.

RAIN INDUSTRIES Income Statement Analysis

• Operating income during the year fell 15.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 13.9% YoY during the fiscal. Operating profit margins witnessed a fall and down at 16.0% in CY20 as against 11.9% in CY19.
• Depreciation charges increased by 33.3% and finance costs increased by 8.4% YoY, respectively.
• Other income grew by 177.8% YoY.
• Net profit for the year grew by 27.1% YoY.
• Net profit margins during the year grew from 3.7% in CY19 to 5.6% in CY20.

RAIN INDUSTRIES Income Statement 2019-20

No. of Mths Year Ending		12 Dec-19*	12 Dec-20*	% Change
Net Sales	Rs m	123,607	104,647	-15.3%
Other income	Rs m	1,639	4,553	177.8%
Total Revenues	Rs m	125,246	109,200	-12.8%
Gross profit	Rs m	14,733	16,774	13.9%
Depreciation	Rs m	5,940	7,917	33.3%
Interest	Rs m	4,524	4,905	8.4%
Profit before tax	Rs m	5,907	8,504	44.0%
Tax	Rs m	1,283	2,628	104.8%
Profit after tax	Rs m	4,625	5,877	27.1%
Gross profit margin	%	11.9	16.0
Effective tax rate	%	21.7	30.9
Net profit margin	%	3.7	5.6

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RAIN INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during CY20 stood at Rs 26 billion as compared to Rs 22 billion in CY19, thereby witnessing an increase of 17.0%.
• Long-term debt stood at Rs 80 billion as compared to Rs 74 billion during CY19, a growth of 8.8%.
• Current assets rose 14% and stood at Rs 50 billion, while fixed assets rose 11% and stood at Rs 124 billion in CY20.
• Overall, the total assets and liabilities for CY20 stood at Rs 174 billion as against Rs 156 billion during CY19, thereby witnessing a growth of 12%.

RAIN INDUSTRIES Balance Sheet as on December 2020

No. of Mths Year Ending		12 Dec-19*	12 Dec-20*	% Change
Networth	Rs m	49,599	55,335	11.6
Current Liabilities	Rs m	21,981	25,712	17.0
Long-term Debt	Rs m	73,556	80,012	8.8
Total Liabilities	Rs m	156,131	174,266	11.6
Current assets	Rs m	43,799	49,817	13.7
Fixed Assets	Rs m	112,332	124,448	10.8
Total Assets	Rs m	156,131	174,266	11.6

RAIN INDUSTRIES Cash Flow Statement Analysis

• RAIN INDUSTRIES's cash flow from operating activities (CFO) during CY20 stood at Rs 18 billion on a YoY basis.
• Cash flow from investing activities (CFI) during CY20 stood at Rs -8 billion on a YoY basis.
• Cash flow from financial activities (CFF) during CY20 stood at Rs -6 billion, an improvement of 8% on a YoY basis.
• Overall, net cash flows for the company during CY20 stood at Rs 4 billion from the Rs 3 billion net cash flows seen during CY19.

RAIN INDUSTRIES Cash Flow Statement 2019-20

Particulars	No. of months	12	12	% Change
	Year Ending	Dec-19	Dec-20
Cash Flow from Operating Activities	Rs m	22,400	18,225	-18.6%
Cash Flow from Investing Activities	Rs m	-11,792	-7,708	-
Cash Flow from Financing Activities	Rs m	-6,528	-5,999	-
Net Cash Flow	Rs m	3,217	4,247	32.0%

Current Valuations for RAIN INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 17.5, an improvement from the EPS of Rs 13.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 126.5, stands at 7.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.8 times, while the price to sales ratio stands at 0.4 times.
• The company's price to cash flow (P/CF) ratio stood at 2.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Dec-19*	12 Dec-20*
Sales per share (Unadj.)	Rs	367.5	311.1
TTM Earnings per share	Rs	13.7	17.5
Diluted earnings per share	Rs	13.7	17.5
Price to Cash Flow	x	3.1	2.3
TTM P/E ratio	x	7.2	7.2
Price / Book Value ratio	x	0.8	0.6
Market Cap	Rs m	37,847	31,465
Dividends per share (Unadj.)	Rs	1.0	1.0

Ratio Analysis for RAIN INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.9x during CY20, from 2.0x during CY19. 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 2.7x during CY20, from 2.3x during CY19. 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 10.6% during CY20, from 9.3% during CY20. 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 9.9% during CY20, from 8.5% during CY19. 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 improved and stood at 6.2% during CY20, from 5.9% during CY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Dec-19*	12 Dec-20*
Current ratio	x	2.0	1.9
Debtors’ Days	Days	33	38
Interest coverage	x	2.3	2.7
Debt to equity ratio	x	1.5	1.4
Return on assets	%	5.9	6.2
Return on equity	%	9.3	10.6
Return on capital employed	%	8.5	9.9

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

RAIN INDUSTRIES Share Price Performance

Over the last one year, RAIN INDUSTRIES share price has moved down from Rs 102.5 to Rs 55.9, registering a loss of Rs 46.6 or around 45.5%.

Overall, the S&P BSE SENSEX is down 24.2% over the year.

(To know more, check out historical annual results for RAIN INDUSTRIES and quarterly results for RAIN INDUSTRIES)

Read: Latest Annual Report Analysis of RAIN INDUSTRIES