RAMCO INDUSTRIES 2020-21 Annual Report Analysis

Wed, 31 Mar

RAMCO INDUSTRIES 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.

RAMCO INDUSTRIES Income Statement Analysis

• Operating income during the year rose 24.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 78.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 15.9% in FY21 as against 11.1% in FY20.
• Depreciation charges increased by 5.4% and finance costs decreased by 34.9% YoY, respectively.
• Other income declined by 40.1% YoY.
• Net profit for the year grew by 68.2% YoY.
• Net profit margins during the year grew from 7.1% in FY20 to 9.6% in FY21.

RAMCO INDUSTRIES Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	9,741	12,093	24.2%
Other income	Rs m	409	245	-40.1%
Total Revenues	Rs m	10,149	12,339	21.6%
Gross profit	Rs m	1,081	1,928	78.3%
Depreciation	Rs m	309	326	5.4%
Interest	Rs m	147	96	-34.9%
Profit before tax	Rs m	1,033	1,751	69.4%
Tax	Rs m	344	592	71.9%
Profit after tax	Rs m	689	1,159	68.2%
Gross profit margin	%	11.1	15.9
Effective tax rate	%	33.3	33.8
Net profit margin	%	7.1	9.6

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RAMCO INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 4 billion as compared to Rs 5 billion in FY20, thereby witnessing an decrease of -1.5%.
• Long-term debt down at Rs 236 million as compared to Rs 257 million during FY20, a fall of 8.5%.
• Current assets rose 9% and stood at Rs 7 billion, while fixed assets rose 8% and stood at Rs 33 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 40 billion as against Rs 37 billion during FY20, thereby witnessing a growth of 8%.

RAMCO INDUSTRIES Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	32,094	34,840	8.6
Current Liabilities	Rs m	4,515	4,447	-1.5
Long-term Debt	Rs m	257	236	-8.5
Total Liabilities	Rs m	37,132	40,007	7.7
Current assets	Rs m	6,106	6,639	8.7
Fixed Assets	Rs m	31,027	33,368	7.5
Total Assets	Rs m	37,132	40,007	7.7

RAMCO INDUSTRIES Cash Flow Statement Analysis

• RAMCO INDUSTRIES's cash flow from operating activities (CFO) during FY21 stood at Rs 2 billion, an improvement of 426.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -728 million, an improvement of 15.9% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -1 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 138 million from the Rs 1 million net cash flows seen during FY20.

RAMCO INDUSTRIES 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	361	1,901	426.1%
Cash Flow from Investing Activities	Rs m	-628	-728	-
Cash Flow from Financing Activities	Rs m	267	-1,036	-
Net Cash Flow	Rs m	1	138	12,560.6%

Current Valuations for RAMCO INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 13.4, an improvement from the EPS of Rs 8.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 256.7, stands at 19.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.6 times, while the price to sales ratio stands at 1.8 times.
• The company's price to cash flow (P/CF) ratio stood at 11.0 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	112.4	139.6
TTM Earnings per share	Rs	8.0	13.4
Diluted earnings per share	Rs	8.0	13.4
Price to Cash Flow	x	9.7	11.0
TTM P/E ratio	x	14.1	19.2
Price / Book Value ratio	x	0.4	0.5
Market Cap	Rs m	14,306	16,397
Dividends per share (Unadj.)	Rs	0.5	1.0

Ratio Analysis for RAMCO INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.5x during FY21, from 1.4x 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 19.3x during FY21, from 8.0x 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 3.3% during FY21, from 2.1% 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 5.3% during FY21, from 3.6% 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 improved and stood at 3.1% during FY21, from 2.3% 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	1.4	1.5
Debtors’ Days	Days	315	284
Interest coverage	x	8.0	19.3
Debt to equity ratio	x	0.0	0.0
Return on assets	%	2.3	3.1
Return on equity	%	2.1	3.3
Return on capital employed	%	3.6	5.3

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

RAMCO INDUSTRIES Share Price Performance

Over the last one year, RAMCO INDUSTRIES share price has moved up from Rs 112.0 to Rs 256.7, registering a gain of Rs 144.7 or around 129.2%.

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

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

Read: Latest Annual Report Analysis of RAMCO INDUSTRIES