SAIL 2019-20 Annual Report Analysis

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SAIL 2019-20 Annual Report Analysis
Thu, 10 Dec

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 4.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 16.6% in FY20 as against 14.6% 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 9.7% YoY.
  • Net profit margins during the year declined from 3.5% in FY19 to 3.4% 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 97,615 102,157 4.7%
Depreciation Rs m 33,853 37,557 10.9%
Interest Rs m 31,549 34,868 10.5%
Profit before tax Rs m 37,158 38,790 4.4%
Tax Rs m 12,005 11,809 -1.6%
Profit after tax Rs m 23,487 21,207 -9.7%
Gross profit margin % 14.6 16.6
Effective tax rate % 32.3 30.4
Net profit margin % 3.5 3.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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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 8.0%.
  • 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 411 billion, while fixed assets rose 1% and stood at Rs 809 billion in FY20.
  • Overall, the total assets and liabilities for FY20 stood at Rs 1,269 billion as against Rs 1,180 billion during FY19, thereby witnessing a growth of 8%.

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 416,172 449,648 8.0
Long-term Debt Rs m 308,027 345,600 12.2
Total Liabilities Rs m 1,179,523 1,269,276 7.6
 
Current assets Rs m 323,816 410,983 26.9
Fixed Assets Rs m 802,277 808,949 0.8
Total Assets Rs m 1,179,523 1,269,276 7.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for SAIL

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 5.1, an decline from the EPS of Rs 5.7 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 54.7, stands at 11.2 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 0.4 times, while the price to sales ratio stands at 0.3 times.
  • The company's price to cash flow (P/CF) ratio stood at 4.0 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 5.7 5.1
Diluted earnings per share Rs 5.7 5.1
Price to Cash Flow x 4.1 4.0
TTM P/E ratio x 11.2 11.2
Price / Book Value ratio x 0.7 0.4
Market Cap Rs m 225,733 225,733
Dividends per share (Unadj.) Rs 0.5 0.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 2.1x during FY20, from 2.2x 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 5.1% during FY20, from 5.9% 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 8.9% during FY20, from 9.5% 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 4.4% during FY20, from 4.7% 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 25 52
Interest coverage x 2.2 2.1
Debt to equity ratio x 0.8 0.8
Return on assets % 4.7 4.4
Return on equity % 5.9 5.1
Return on capital employed % 9.5 8.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 up from Rs 38.3 to Rs 54.7, registering a gain of Rs 16.4 or around 42.9%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 10,936.8 (down 0.5%). Over the last one year it has moved up from 9,366.0 to 10,936.8, a gain of 1,571 points (up 16.8%).

Overall, the S&P BSE SENSEX is up 13.1% over the year.

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

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