SAIL 2021-22 Annual Report Analysis

Mon, 12 Sep

SAIL 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.

SAIL Income Statement Analysis

• Operating income during the year rose 49.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 61.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 20.7% in FY22 as against 19.2% in FY21.
• Depreciation charges increased by 4.2% and finance costs decreased by 39.7% YoY, respectively.
• Other income declined by 0.2% YoY.
• Net profit for the year grew by 195.2% YoY.
• Net profit margins during the year grew from 6.0% in FY21 to 11.8% in FY22.

SAIL Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	691,136	1,034,768	49.7%
Other income	Rs m	8,607	8,586	-0.2%
Total Revenues	Rs m	699,743	1,043,354	49.1%
Gross profit	Rs m	132,649	214,062	61.4%
Depreciation	Rs m	41,028	42,750	4.2%
Interest	Rs m	28,172	16,979	-39.7%
Profit before tax	Rs m	72,057	162,919	126.1%
Tax	Rs m	30,575	40,484	32.4%
Profit after tax	Rs m	41,481	122,435	195.2%
Gross profit margin	%	19.2	20.7
Effective tax rate	%	42.4	24.8
Net profit margin	%	6.0	11.8

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SAIL Balance Sheet Analysis

• The company's current liabilities during FY22 down at Rs 394 billion as compared to Rs 452 billion in FY21, thereby witnessing an decrease of -13.0%.
• Long-term debt down at Rs 117 billion as compared to Rs 197 billion during FY21, a fall of 40.5%.
• Current assets fell 7% and stood at Rs 289 billion, while fixed assets rose 5% and stood at Rs 912 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 1,201 billion as against Rs 1,180 billion during FY21, thereby witnessing a growth of 2%.

SAIL Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	454,062	542,117	19.4
Current Liabilities	Rs m	452,494	393,616	-13.0
Long-term Debt	Rs m	197,260	117,423	-40.5
Total Liabilities	Rs m	1,179,976	1,201,278	1.8
Current assets	Rs m	309,190	288,914	-6.6
Fixed Assets	Rs m	870,617	912,224	4.8
Total Assets	Rs m	1,179,976	1,201,278	1.8

SAIL Cash Flow Statement Analysis

• SAIL's cash flow from operating activities (CFO) during FY22 stood at Rs 310 billion, an improvement of 32.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -40 billion, an improvement of 20.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -274 billion on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -4 billion from the Rs 3 billion net cash flows seen during FY21.

SAIL 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	234,304	309,867	32.2%
Cash Flow from Investing Activities	Rs m	-32,948	-39,758	-
Cash Flow from Financing Activities	Rs m	-198,078	-273,976	-
Net Cash Flow	Rs m	3,277	-3,867	-

Current Valuations for SAIL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 29.6, an improvement from the EPS of Rs 10.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 83.5, stands at 4.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.6 times, while the price to sales ratio stands at 0.3 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-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	167.3	250.5
TTM Earnings per share	Rs	10.0	29.6
Diluted earnings per share	Rs	10.0	29.6
Price to Cash Flow	x	3.9	2.9
TTM P/E ratio	x	8.8	4.0
Price / Book Value ratio	x	0.5	0.9
Market Cap	Rs m	212,722	476,146
Dividends per share (Unadj.)	Rs	2.8	8.8

Ratio Analysis for SAIL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.7x during FY22, from 0.7x 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 improved and stood at 10.6x during FY22, from 3.6x 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 22.6% during FY22, from 9.1% 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 improved and stood at 27.3% during FY22, from 15.4% 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 11.6% during FY22, from 5.9% 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	0.7	0.7
Debtors’ Days	Days	4	2
Interest coverage	x	3.6	10.6
Debt to equity ratio	x	0.4	0.2
Return on assets	%	5.9	11.6
Return on equity	%	9.1	22.6
Return on capital employed	%	15.4	27.3

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 122.2 to Rs 83.5, registering a loss of Rs 38.7 or around 31.7%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 19,255.2 (up 0.6%). Over the last one year it has moved down from 20,704.0 to 19,255.2, a loss of 1,449 points (down 7.0%).

Overall, the S&P BSE SENSEX is up 3.2% 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