NIPPON LIFE INDIA AMC 2020-21 Annual Report Analysis

Wed, 31 Mar

NIPPON LIFE INDIA AMC 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.

NIPPON LIFE INDIA AMC Income Statement Analysis

• Operating income during the year fell 11.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 8.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 52.5% in FY21 as against 42.6% in FY20.
• Depreciation charges increased by 0.1% and finance costs decreased by 21.9% YoY, respectively.
• Other income grew by 314.6% YoY.
• Net profit for the year grew by 63.4% YoY.
• Net profit margins during the year grew from 34.6% in FY20 to 64.0% in FY21.

NIPPON LIFE INDIA AMC Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	12,030	10,621	-11.7%
Other income	Rs m	862	3,572	314.6%
Total Revenues	Rs m	12,891	14,193	10.1%
Gross profit	Rs m	5,126	5,575	8.8%
Depreciation	Rs m	333	333	0.1%
Interest	Rs m	57	44	-21.9%
Profit before tax	Rs m	5,598	8,770	56.7%
Tax	Rs m	1,441	1,976	37.2%
Profit after tax	Rs m	4,158	6,794	63.4%
Gross profit margin	%	42.6	52.5
Effective tax rate	%	25.7	22.5
Net profit margin	%	34.6	64.0

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NIPPON LIFE INDIA AMC Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 2 billion as compared to Rs 3 billion in FY20, thereby witnessing an decrease of -5.9%.
• Current assets fell 23% and stood at Rs 5 billion, while fixed assets rose 29% and stood at Rs 29 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 34 billion as against Rs 29 billion during FY20, thereby witnessing a growth of 18%.

NIPPON LIFE INDIA AMC Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	25,296	30,091	19.0
Current Liabilities	Rs m	2,519	2,371	-5.9
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	28,802	33,922	17.8
Current assets	Rs m	6,409	4,950	-22.8
Fixed Assets	Rs m	22,393	28,973	29.4
Total Assets	Rs m	28,802	33,922	17.8

NIPPON LIFE INDIA AMC Cash Flow Statement Analysis

• NIPPON LIFE INDIA AMC's cash flow from operating activities (CFO) during FY21 stood at Rs 5 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -4 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -2 billion, an improvement of 49% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -2 billion from the Rs 2 billion net cash flows seen during FY20.

NIPPON LIFE INDIA AMC 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	6,050	4,560	-24.6%
Cash Flow from Investing Activities	Rs m	365	-4,016	-
Cash Flow from Financing Activities	Rs m	-4,680	-2,391	-
Net Cash Flow	Rs m	1,735	-1,848	-

Current Valuations for NIPPON LIFE INDIA AMC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 11.0, an improvement from the EPS of Rs 6.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 338.1, stands at 31.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 7.0 times, while the price to sales ratio stands at 19.6 times.
• The company's price to cash flow (P/CF) ratio stood at 25.3 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	19.7	17.2
TTM Earnings per share	Rs	6.8	11.0
Diluted earnings per share	Rs	6.7	10.9
Price to Cash Flow	x	34.5	25.3
TTM P/E ratio	x	37.2	31.0
Price / Book Value ratio	x	7.7	6.0
Market Cap	Rs m	194,636	180,174
Dividends per share (Unadj.)	Rs	5.0	8.0

Ratio Analysis for NIPPON LIFE INDIA AMC

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.1x during FY21, from 2.5x 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 199.0x during FY21, from 99.7x 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 22.6% during FY21, from 16.4% 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 29.3% during FY21, from 22.4% 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 20.2% during FY21, from 14.6% 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	2.5	2.1
Debtors’ Days	Days	2	2
Interest coverage	x	99.7	199.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	14.6	20.2
Return on equity	%	16.4	22.6
Return on capital employed	%	22.4	29.3

To see how NIPPON LIFE INDIA AMC has performed over the last 5 years, please visit here.

NIPPON LIFE INDIA AMC Share Price Performance

Over the last one year, NIPPON LIFE INDIA AMC share price has moved up from Rs 248.8 to Rs 338.1, registering a gain of Rs 89.3 or around 35.9%.

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

(To know more, check out historical annual results for NIPPON LIFE INDIA AMC and quarterly results for NIPPON LIFE INDIA AMC)

Read: Latest Annual Report Analysis of NIPPON LIFE INDIA AMC