RCF 2020-21 Annual Report Analysis

Wed, 31 Mar

RCF 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.

RCF Income Statement Analysis

• Operating income during the year fell 14.6% on a year-on-year (YoY) basis.
• The company's operating profit increased by 62.5% YoY during the fiscal. Operating profit margins witnessed a fall and down at 8.5% in FY21 as against 4.5% in FY20.
• Depreciation charges increased by 2.1% and finance costs decreased by 24.2% YoY, respectively.
• Other income declined by 7.1% YoY.
• Net profit for the year grew by 79.3% YoY.
• Net profit margins during the year grew from 2.1% in FY20 to 4.5% in FY21.

RCF Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	96,980	82,812	-14.6%
Other income	Rs m	1,789	1,663	-7.1%
Total Revenues	Rs m	98,768	84,474	-14.5%
Gross profit	Rs m	4,343	7,060	62.5%
Depreciation	Rs m	1,710	1,746	2.1%
Interest	Rs m	2,393	1,814	-24.2%
Profit before tax	Rs m	2,029	5,162	154.4%
Tax	Rs m	-52	1,431	-2,840.6%
Profit after tax	Rs m	2,082	3,731	79.3%
Gross profit margin	%	4.5	8.5
Effective tax rate	%	-2.6	27.7
Net profit margin	%	2.1	4.5

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RCF Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 26 billion as compared to Rs 58 billion in FY20, thereby witnessing an decrease of -56.1%.
• Long-term debt stood at Rs 10 billion as compared to Rs 6 billion during FY20, a growth of 73.6%.
• Current assets fell 42% and stood at Rs 42 billion, while fixed assets rose 12% and stood at Rs 34 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 76 billion as against Rs 103 billion during FY20, thereby witnessing a fall of 26%.

RCF Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	31,790	33,334	4.9
Current Liabilities	Rs m	58,239	25,589	-56.1
Long-term Debt	Rs m	6,009	10,430	73.6
Total Liabilities	Rs m	102,842	76,211	-25.9
Current assets	Rs m	72,404	42,150	-41.8
Fixed Assets	Rs m	30,437	34,061	11.9
Total Assets	Rs m	102,842	76,211	-25.9

RCF Cash Flow Statement Analysis

• RCF's cash flow from operating activities (CFO) during FY21 stood at Rs 52 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -6 billion, an improvement of 16.8% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -31 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 15 billion from the Rs -11 million net cash flows seen during FY20.

RCF 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	-5,225	52,206	-
Cash Flow from Investing Activities	Rs m	-5,306	-6,195	-
Cash Flow from Financing Activities	Rs m	10,519	-31,312	-
Net Cash Flow	Rs m	-11	14,699	-

Current Valuations for RCF

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 6.8, 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 77.5, stands at 11.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.3 times, while the price to sales ratio stands at 0.5 times.
• The company's price to cash flow (P/CF) ratio stood at 6.4 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	175.8	150.1
TTM Earnings per share	Rs	3.8	6.8
Diluted earnings per share	Rs	3.8	6.8
Price to Cash Flow	x	4.1	6.4
TTM P/E ratio	x	7.5	11.5
Price / Book Value ratio	x	0.8	1.0
Market Cap	Rs m	24,633	34,949
Dividends per share (Unadj.)	Rs	2.8	3.0

Ratio Analysis for RCF

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.6x during FY21, from 1.2x 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 3.8x during FY21, from 1.8x 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 11.2% during FY21, from 6.5% 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 15.9% during FY21, from 11.7% 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 7.3% during FY21, from 4.4% 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	1.2	1.6
Debtors’ Days	Days	17	6
Interest coverage	x	1.8	3.8
Debt to equity ratio	x	0.2	0.3
Return on assets	%	4.4	7.3
Return on equity	%	6.5	11.2
Return on capital employed	%	11.7	15.9

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

RCF Share Price Performance

Over the last one year, RCF share price has moved up from Rs 28.4 to Rs 77.5, registering a gain of Rs 49.2 or around 173.4%.

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

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

Read: Latest Annual Report Analysis of RCF