SHANTHI GEARS 2020-21 Annual Report Analysis

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SHANTHI GEARS 2020-21 Annual Report Analysis
Mon, 15 Nov

SHANTHI GEARS 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.

SHANTHI GEARS Income Statement Analysis

  • Operating income during the year fell 11.0% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 24.9% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 12.1% in FY21 as against 14.3% in FY20.
  • Depreciation charges increased by 5.6% and finance costs increased by 26.3% YoY, respectively.
  • Other income grew by 38.9% YoY.
  • Net profit for the year declined by 19.9% YoY.
  • Net profit margins during the year declined from 10.1% in FY20 to 9.0% in FY21.

SHANTHI GEARS Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 2,423 2,155 -11.0%
Other income Rs m 66 91 38.9%
Total Revenues Rs m 2,488 2,246 -9.7%
Gross profit Rs m 347 261 -24.9%
Depreciation Rs m 84 89 5.6%
Interest Rs m 2 2 26.3%
Profit before tax Rs m 327 261 -20.3%
Tax Rs m 75 59 -21.3%
Profit after tax Rs m 252 202 -19.9%
Gross profit margin % 14.3 12.1
Effective tax rate % 22.9 22.6
Net profit margin % 10.1 9.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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SHANTHI GEARS Balance Sheet Analysis

  • The company's current liabilities during FY21 stood at Rs 858 million as compared to Rs 529 million in FY20, thereby witnessing an increase of 62.3%.
  • Current assets rose 22% and stood at Rs 2 billion, while fixed assets rose 6% and stood at Rs 1 billion in FY21.
  • Overall, the total assets and liabilities for FY21 stood at Rs 3 billion as against Rs 3 billion during FY20, thereby witnessing a growth of 16%.

SHANTHI GEARS Balance Sheet as on March 2021

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Networth Rs m 2,286 2,371 3.7
 
Current Liabilities Rs m 529 858 62.3
Long-term Debt Rs m 0 0 0.0
Total Liabilities Rs m 2,789 3,230 15.8
 
Current assets Rs m 1,753 2,136 21.8
Fixed Assets Rs m 1,036 1,094 5.6
Total Assets Rs m 2,789 3,230 15.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



SHANTHI GEARS Cash Flow Statement Analysis

  • SHANTHI GEARS's cash flow from operating activities (CFO) during FY21 stood at Rs 328 million on a YoY basis.
  • Cash flow from investing activities (CFI) during FY21 stood at Rs -204 million on a YoY basis.
  • Cash flow from financial activities (CFF) during FY21 stood at Rs -115 million, an improvement of 88% on a YoY basis.
  • Overall, net cash flows for the company during FY21 stood at Rs 9 million from the Rs -180 million net cash flows seen during FY20.

SHANTHI GEARS 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 556 328 -41.0%
Cash Flow from Investing Activities Rs m 242 -204 -
Cash Flow from Financing Activities Rs m -977 -115 -
Net Cash Flow Rs m -180 9 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for SHANTHI GEARS

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 2.6, an decline from the EPS of Rs 3.3 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 159.1, stands at 36.3 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 3.4 times, while the price to sales ratio stands at 3.7 times.
  • The company's price to cash flow (P/CF) ratio stood at 42.0 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 31.6 28.1
TTM Earnings per share Rs 3.3 2.6
Diluted earnings per share Rs 3.3 2.6
Price to Cash Flow x 36.3 42.0
TTM P/E ratio x 36.3 36.3
Price / Book Value ratio x 3.2 3.4
Market Cap Rs m 12,202 12,202
Dividends per share (Unadj.) Rs 2.0 1.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for SHANTHI GEARS

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 2.5x during FY21, from 3.3x 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 deteriorated and stood at 109.6x during FY21, from 173.1x 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 declined and down at 8.5% during FY21, from 11.0% 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 declined and down at 11.1% during FY21, from 14.4% 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 declined and down at 6.3% during FY21, from 9.1% 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 3.3 2.5
Debtors’ Days Days 6 8
Interest coverage x 173.1 109.6
Debt to equity ratio x 0.0 0.0
Return on assets % 9.1 6.3
Return on equity % 11.0 8.5
Return on capital employed % 14.4 11.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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