NATH INDUSTRIES 2021-22 Annual Report Analysis

Tue, 14 Jun

NATH INDUSTRIES has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

NATH INDUSTRIES Income Statement Analysis

• Operating income during the year rose 44.4% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 12.6% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 6.2% in FY22 as against 10.2% in FY21.
• Depreciation charges increased by 4.9% and finance costs increased by 42.4% YoY, respectively.
• Other income grew by 8.8% YoY.
• Net profit for the year grew by 9.2% YoY.
• Net profit margins during the year declined from 5.2% in FY21 to 4.0% in FY22.

NATH INDUSTRIES Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	2,917	4,213	44.4%
Other income	Rs m	17	18	8.8%
Total Revenues	Rs m	2,934	4,232	44.2%
Gross profit	Rs m	298	260	-12.6%
Depreciation	Rs m	64	67	4.9%
Interest	Rs m	34	48	42.4%
Profit before tax	Rs m	216	163	-24.8%
Tax	Rs m	64	-4	-105.6%
Profit after tax	Rs m	152	166	9.2%
Gross profit margin	%	10.2	6.2
Effective tax rate	%	29.6	-2.2
Net profit margin	%	5.2	4.0

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NATH INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 680 million as compared to Rs 543 million in FY21, thereby witnessing an increase of 25.2%.
• Long-term debt stood at Rs 488 million as compared to Rs 369 million during FY21, a growth of 32.2%.
• Current assets rose 27% and stood at Rs 1 billion, while fixed assets rose 6% and stood at Rs 3 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 4 billion as against Rs 4 billion during FY21, thereby witnessing a growth of 12%.

NATH INDUSTRIES Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	2,295	2,444	6.5
Current Liabilities	Rs m	543	680	25.2
Long-term Debt	Rs m	369	488	32.2
Total Liabilities	Rs m	3,507	3,924	11.9
Current assets	Rs m	1,044	1,325	27.0
Fixed Assets	Rs m	2,463	2,599	5.5
Total Assets	Rs m	3,507	3,924	11.9

NATH INDUSTRIES Cash Flow Statement Analysis

• NATH INDUSTRIES's cash flow from operating activities (CFO) during FY22 stood at Rs 103 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -334 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs 212 million, an improvement of 209% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -19 million from the Rs 1 million net cash flows seen during FY21.

NATH INDUSTRIES Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	180	103	-42.9%
Cash Flow from Investing Activities	Rs m	14	-334	-
Cash Flow from Financing Activities	Rs m	-194	212	-
Net Cash Flow	Rs m	1	-19	-

Current Valuations for NATH INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 8.8, 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 65.5, stands at 7.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.5 times, while the price to sales ratio stands at 0.3 times.
• The company's price to cash flow (P/CF) ratio stood at 8.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	153.5	221.8
TTM Earnings per share	Rs	8.0	8.8
Diluted earnings per share	Rs	8.0	8.8
Price to Cash Flow	x	7.5	8.1
TTM P/E ratio	x	10.7	7.5
Price / Book Value ratio	x	0.7	0.8
Market Cap	Rs m	1,589	1,892
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for NATH INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.9x during FY22, from 1.9x during FY21. 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 4.4x during FY22, from 7.4x during FY21. 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 6.8% during FY22, from 6.6% during FY22. 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 7.2% during FY22, from 9.4% during FY21. 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 5.5% during FY22, from 5.3% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	1.9	1.9
Debtors’ Days	Days	678	550
Interest coverage	x	7.4	4.4
Debt to equity ratio	x	0.2	0.2
Return on assets	%	5.3	5.5
Return on equity	%	6.6	6.8
Return on capital employed	%	9.4	7.2

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

NATH INDUSTRIES Share Price Performance

Over the last one year, NATH INDUSTRIES share price has moved down from Rs 107.7 to Rs 65.5, registering a loss of Rs 42.2 or around 39.2%.

Overall, the S&P BSE SENSEX is up 1.0% over the year.

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