SAIL 2019-20 Annual Report Analysis

Tue, 31 Mar

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

SAIL Income Statement Analysis

• Operating income during the year fell 7.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 0.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 15.3% in FY20 as against 14.0% in FY19.
• Depreciation charges increased by 10.9% and finance costs increased by 10.5% YoY, respectively.
• Other income grew by 83.2% YoY.
• Net profit for the year declined by 9.4% YoY.
• Net profit margins during the year declined from 3.2% in FY19 to 3.1% in FY20.

SAIL Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	669,736	616,642	-7.9%
Other income	Rs m	4,945	9,058	83.2%
Total Revenues	Rs m	674,681	625,700	-7.3%
Gross profit	Rs m	93,721	94,440	0.8%
Depreciation	Rs m	33,853	37,557	10.9%
Interest	Rs m	31,549	34,868	10.5%
Profit before tax	Rs m	33,264	31,073	-6.6%
Tax	Rs m	12,005	11,809	-1.6%
Profit after tax	Rs m	21,258	19,264	-9.4%
Gross profit margin	%	14.0	15.3
Effective tax rate	%	36.1	38.0
Net profit margin	%	3.2	3.1

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SAIL Balance Sheet Analysis

• The company's current liabilities during FY20 stood at Rs 450 billion as compared to Rs 416 billion in FY19, thereby witnessing an increase of 8.2%.
• Long-term debt stood at Rs 346 billion as compared to Rs 308 billion during FY19, a growth of 12.2%.
• Current assets rose 27% and stood at Rs 412 billion, while fixed assets rose 1% and stood at Rs 838 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 1,250 billion as against Rs 1,151 billion during FY19, thereby witnessing a growth of 9%.

SAIL Balance Sheet as on March 2020

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Networth	Rs m	396,462	415,102	4.7
Current Liabilities	Rs m	416,172	450,360	8.2
Long-term Debt	Rs m	308,027	345,600	12.2
Total Liabilities	Rs m	1,150,855	1,249,766	8.6
Current assets	Rs m	323,931	411,966	27.2
Fixed Assets	Rs m	826,925	837,800	1.3
Total Assets	Rs m	1,150,855	1,249,766	8.6

SAIL Cash Flow Statement Analysis

• SAIL's cash flow from operating activities (CFO) during FY20 stood at Rs -6 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY20 stood at Rs -43 billion, an improvement of 15.3% on a YoY basis.
• Cash flow from financial activities (CFF) during FY20 stood at Rs 50 billion, an improvement of 241% on a YoY basis.
• Overall, net cash flows for the company during FY20 stood at Rs 1 billion from the Rs -284 million net cash flows seen during FY19.

SAIL Cash Flow Statement 2019-20

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-19	Mar-20
Cash Flow from Operating Activities	Rs m	72,152	-6,177	-
Cash Flow from Investing Activities	Rs m	-36,945	-42,605	-
Cash Flow from Financing Activities	Rs m	-35,491	50,032	-
Net Cash Flow	Rs m	-284	1,250	-

Current Valuations for SAIL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 4.7, an decline from the EPS of Rs 5.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 23.1, stands at 4.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.2 times, while the price to sales ratio stands at 0.2 times.
• The company's price to cash flow (P/CF) ratio stood at 2.9 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Sales per share (Unadj.)	Rs	162.1	149.3
TTM Earnings per share	Rs	5.1	4.7
Diluted earnings per share	Rs	5.1	4.7
Price to Cash Flow	x	4.0	2.9
TTM P/E ratio	x	10.2	4.9
Price / Book Value ratio	x	0.7	0.4
Market Cap	Rs m	279,224	165,841
Dividends per share (Unadj.)	Rs	0.5	0.0

Ratio Analysis for SAIL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.9x during FY20, from 0.8x during FY19. 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 1.9x during FY20, from 2.1x during FY19. 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 declined and down at 4.6% during FY20, from 5.4% during FY20. 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 8.7% during FY20, from 9.2% during FY19. 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 declined and down at 4.3% during FY20, from 4.6% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Current ratio	x	0.8	0.9
Debtors’ Days	Days	2	5
Interest coverage	x	2.1	1.9
Debt to equity ratio	x	0.8	0.8
Return on assets	%	4.6	4.3
Return on equity	%	5.4	4.6
Return on capital employed	%	9.2	8.7

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

SAIL Share Price Performance

Over the last one year, SAIL share price has moved down from Rs 53.7 to Rs 23.1, registering a loss of Rs 30.7 or around 57.1%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 5,713.3 (up 5.4%). Over the last one year it has moved down from 11,355.1 to 5,713.3, a loss of 5,642 points (down 49.7%).

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

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

Read: Latest Annual Report Analysis of SAIL