SYNCOM FORMULATIONS 2020-21 Annual Report Analysis

Wed, 31 Mar

SYNCOM FORMULATIONS 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.

SYNCOM FORMULATIONS Income Statement Analysis

• Operating income during the year rose 19.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 126.9% YoY during the fiscal. Operating profit margins witnessed a fall and down at 15.5% in FY21 as against 8.1% in FY20.
• Depreciation charges decreased by 0.6% and finance costs decreased by 36.4% YoY, respectively.
• Other income grew by 36.7% YoY.
• Net profit for the year grew by 104.7% YoY.
• Net profit margins during the year grew from 6.9% in FY20 to 11.9% in FY21.

SYNCOM FORMULATIONS Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	2,055	2,448	19.1%
Other income	Rs m	52	71	36.7%
Total Revenues	Rs m	2,107	2,519	19.6%
Gross profit	Rs m	167	380	126.9%
Depreciation	Rs m	41	40	-0.6%
Interest	Rs m	6	4	-36.4%
Profit before tax	Rs m	173	407	135.4%
Tax	Rs m	30	115	279.8%
Profit after tax	Rs m	143	292	104.7%
Gross profit margin	%	8.1	15.5
Effective tax rate	%	17.6	28.3
Net profit margin	%	6.9	11.9

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SYNCOM FORMULATIONS Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 1 billion as compared to Rs 312 million in FY20, thereby witnessing an increase of 241.5%.
• Current assets rose 123% and stood at Rs 2 billion, while fixed assets rose 8% and stood at Rs 1 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 3 billion as against Rs 2 billion during FY20, thereby witnessing a growth of 64%.

SYNCOM FORMULATIONS Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	1,457	1,778	22.1
Current Liabilities	Rs m	312	1,065	241.5
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	1,839	3,014	63.9
Current assets	Rs m	894	1,996	123.3
Fixed Assets	Rs m	945	1,018	7.7
Total Assets	Rs m	1,839	3,014	63.9

SYNCOM FORMULATIONS Cash Flow Statement Analysis

• SYNCOM FORMULATIONS's cash flow from operating activities (CFO) during FY21 stood at Rs -20 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -727 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs 720 million, an improvement of 1,204% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -27 million from the Rs 9 million net cash flows seen during FY20.

SYNCOM FORMULATIONS 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	59	-20	-
Cash Flow from Investing Activities	Rs m	15	-727	-
Cash Flow from Financing Activities	Rs m	-65	720	-
Net Cash Flow	Rs m	9	-27	-

Current Valuations for SYNCOM FORMULATIONS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.4, an improvement from the EPS of Rs 0.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 3.1, stands at 9.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.5 times, while the price to sales ratio stands at 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 5.5 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	2.6	3.1
TTM Earnings per share	Rs	0.2	0.4
Diluted earnings per share	Rs	0.2	0.3
Price to Cash Flow	x	3.4	5.5
TTM P/E ratio	x	4.4	9.2
Price / Book Value ratio	x	0.4	1.0
Market Cap	Rs m	625	1,833
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for SYNCOM FORMULATIONS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.9x during FY21, from 2.9x 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 105.4x during FY21, from 29.2x 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 16.4% during FY21, from 9.8% 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 23.1% during FY21, from 12.3% 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 9.8% during FY21, from 8.1% 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	2.9	1.9
Debtors’ Days	Days	76,978,436	111,558,597
Interest coverage	x	29.2	105.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	8.1	9.8
Return on equity	%	9.8	16.4
Return on capital employed	%	12.3	23.1

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

SYNCOM FORMULATIONS Share Price Performance

Over the last one year, SYNCOM FORMULATIONS share price has moved up from Rs 0.7 to Rs 3.1, registering a gain of Rs 2.4 or around 330.6%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 21,328.2 (up 0.4%). Over the last one year it has moved up from 12,148.6 to 21,328.2, a gain of 9,180 points (up 75.6%).

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

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

Read: Latest Annual Report Analysis of SYNCOM FORMULATIONS