ISGEC HEAVY ENG. 2020-21 Annual Report Analysis

Wed, 31 Mar

ISGEC HEAVY ENG. 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.

ISGEC HEAVY ENG. Income Statement Analysis

• Operating income during the year fell 7.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 35.9% YoY during the fiscal. Operating profit margins witnessed a fall and down at 8.6% in FY21 as against 5.9% in FY20.
• Depreciation charges decreased by 0.3% and finance costs increased by 5.7% YoY, respectively.
• Other income grew by 64.8% YoY.
• Net profit for the year grew by 69.7% YoY.
• Net profit margins during the year grew from 2.5% in FY20 to 4.7% in FY21.

ISGEC HEAVY ENG. Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	58,821	54,256	-7.8%
Other income	Rs m	321	529	64.8%
Total Revenues	Rs m	59,142	54,784	-7.4%
Gross profit	Rs m	3,443	4,679	35.9%
Depreciation	Rs m	1,012	1,009	-0.3%
Interest	Rs m	608	643	5.7%
Profit before tax	Rs m	2,143	3,556	65.9%
Tax	Rs m	653	1,027	57.3%
Profit after tax	Rs m	1,490	2,529	69.7%
Gross profit margin	%	5.9	8.6
Effective tax rate	%	30.5	28.9
Net profit margin	%	2.5	4.7

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ISGEC HEAVY ENG. Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 36 billion as compared to Rs 35 billion in FY20, thereby witnessing an increase of 1.6%.
• Long-term debt stood at Rs 5 billion as compared to Rs 4 billion during FY20, a growth of 20.1%.
• Current assets rose 5% and stood at Rs 46 billion, while fixed assets rose 12% and stood at Rs 19 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 65 billion as against Rs 61 billion during FY20, thereby witnessing a growth of 7%.

ISGEC HEAVY ENG. Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	17,846	20,215	13.3
Current Liabilities	Rs m	35,497	36,064	1.6
Long-term Debt	Rs m	3,859	4,635	20.1
Total Liabilities	Rs m	60,803	65,196	7.2
Current assets	Rs m	43,895	46,212	5.3
Fixed Assets	Rs m	16,908	18,984	12.3
Total Assets	Rs m	60,803	65,196	7.2

ISGEC HEAVY ENG. Cash Flow Statement Analysis

• ISGEC HEAVY ENG.'s cash flow from operating activities (CFO) during FY21 stood at Rs 2 billion, an improvement of 120.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -2 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -892 million on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -252 million from the Rs 713 million net cash flows seen during FY20.

ISGEC HEAVY ENG. 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	1,035	2,278	120.1%
Cash Flow from Investing Activities	Rs m	-3,470	-1,860	-
Cash Flow from Financing Activities	Rs m	2,954	-892	-
Net Cash Flow	Rs m	713	-252	-

Current Valuations for ISGEC HEAVY ENG.

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 34.4, an improvement from the EPS of Rs 20.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 500.0, stands at 14.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.8 times, while the price to sales ratio stands at 0.7 times.
• The company's price to cash flow (P/CF) ratio stood at 7.7 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	800.0	737.9
TTM Earnings per share	Rs	20.3	34.4
Diluted earnings per share	Rs	20.3	34.4
Price to Cash Flow	x	7.5	7.7
TTM P/E ratio	x	12.2	14.5
Price / Book Value ratio	x	1.7	1.3
Market Cap	Rs m	30,296	27,171
Dividends per share (Unadj.)	Rs	2.0	3.0

Ratio Analysis for ISGEC HEAVY ENG.

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.3x during FY21, from 1.2x 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 6.5x during FY21, from 4.5x 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 12.5% during FY21, from 8.4% 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 16.9% during FY21, from 12.7% 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 4.9% during FY21, from 3.5% 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	1.2	1.3
Debtors’ Days	Days	1,113	1,443
Interest coverage	x	4.5	6.5
Debt to equity ratio	x	0.2	0.2
Return on assets	%	3.5	4.9
Return on equity	%	8.4	12.5
Return on capital employed	%	12.7	16.9

To see how ISGEC HEAVY ENG. has performed over the last 5 years, please visit here.

ISGEC HEAVY ENG. Share Price Performance

Over the last one year, ISGEC HEAVY ENG. share price has moved up from Rs 255.4 to Rs 500.0, registering a gain of Rs 244.7 or around 95.8%.

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 ISGEC HEAVY ENG. and quarterly results for ISGEC HEAVY ENG.)

Read: Latest Annual Report Analysis of ISGEC HEAVY ENG.