SHANTHI GEARS 2020-21 Annual Report Analysis

Wed, 31 Mar

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 10.4% in FY20 to 9.4% 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	%	10.4	9.4

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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

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	-

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 127.0, stands at 48.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.1 times, while the price to sales ratio stands at 4.5 times.
• The company's price to cash flow (P/CF) ratio stood at 27.5 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	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	15.2	27.5
TTM P/E ratio	x	20.3	48.3
Price / Book Value ratio	x	3.2	3.4
Market Cap	Rs m	7,370	7,998
Dividends per share (Unadj.)	Rs	2.0	1.5

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

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

SHANTHI GEARS Share Price Performance

Over the last one year, SHANTHI GEARS share price has moved up from Rs 66.6 to Rs 127.0, registering a gain of Rs 60.5 or around 90.8%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 21,095.8 (down 0.4%). Over the last one year it has moved up from 10,979.5 to 21,095.8, a gain of 10,116 points (up 92.1%).

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

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

Read: Latest Annual Report Analysis of SHANTHI GEARS