SOLAR INDUSTRIES 2020-21 Annual Report Analysis

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SOLAR INDUSTRIES 2020-21 Annual Report Analysis
Tue, 19 Oct

SOLAR INDUSTRIES 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.

SOLAR INDUSTRIES Income Statement Analysis

  • Operating income during the year rose 12.4% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 18.5% YoY during the fiscal. Operating profit margins witnessed a fall and down at 20.5% in FY21 as against 19.4% in FY20.
  • Depreciation charges increased by 10.6% and finance costs decreased by 17.5% YoY, respectively.
  • Other income declined by 47.8% YoY.
  • Net profit for the year grew by 3.4% YoY.
  • Net profit margins during the year declined from 12.2% in FY20 to 11.4% in FY21.

SOLAR INDUSTRIES Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 22,373 25,156 12.4%
Other income Rs m 411 214 -47.8%
Total Revenues Rs m 22,784 25,371 11.4%
Gross profit Rs m 4,343 5,146 18.5%
Depreciation Rs m 845 935 10.6%
Interest Rs m 550 454 -17.5%
Profit before tax Rs m 3,358 3,971 18.3%
Tax Rs m 571 1,090 90.8%
Profit after tax Rs m 2,787 2,881 3.4%
Gross profit margin % 19.4 20.5
Effective tax rate % 17.0 27.5
Net profit margin % 12.2 11.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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SOLAR INDUSTRIES Balance Sheet Analysis

  • The company's current liabilities during FY21 stood at Rs 8 billion as compared to Rs 7 billion in FY20, thereby witnessing an increase of 11.9%.
  • Long-term debt stood at Rs 4 billion as compared to Rs 3 billion during FY20, a growth of 71.4%.
  • Current assets rose 25% and stood at Rs 12 billion, while fixed assets rose 16% and stood at Rs 17 billion in FY21.
  • Overall, the total assets and liabilities for FY21 stood at Rs 30 billion as against Rs 25 billion during FY20, thereby witnessing a growth of 19%.

SOLAR INDUSTRIES Balance Sheet as on March 2021

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Networth Rs m 13,801 15,794 14.4
 
Current Liabilities Rs m 7,322 8,194 11.9
Long-term Debt Rs m 2,528 4,332 71.4
Total Liabilities Rs m 24,808 29,594 19.3
 
Current assets Rs m 9,835 12,257 24.6
Fixed Assets Rs m 14,973 17,338 15.8
Total Assets Rs m 24,808 29,594 19.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



SOLAR INDUSTRIES Cash Flow Statement Analysis

  • SOLAR INDUSTRIES's cash flow from operating activities (CFO) during FY21 stood at Rs 4 billion, an improvement of 9.8% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY21 stood at Rs -3 billion, an improvement of 18.1% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY21 stood at Rs -261 million, an improvement of 22% on a YoY basis.
  • Overall, net cash flows for the company during FY21 stood at Rs 774 million from the Rs 316 million net cash flows seen during FY20.

SOLAR INDUSTRIES 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 3,248 3,567 9.8%
Cash Flow from Investing Activities Rs m -2,122 -2,507 -
Cash Flow from Financing Activities Rs m -336 -261 -
Net Cash Flow Rs m 316 774 145.2%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for SOLAR INDUSTRIES

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 31.8, an improvement from the EPS of Rs 30.8 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 2,740.6, stands at 71.9 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 6.5 times, while the price to sales ratio stands at 4.1 times.
  • The company's price to cash flow (P/CF) ratio stood at 65.0 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 247.2 278.0
TTM Earnings per share Rs 30.8 31.8
Diluted earnings per share Rs 30.8 31.8
Price to Cash Flow x 68.3 65.0
TTM P/E ratio x 71.9 71.9
Price / Book Value ratio x 7.0 6.5
Market Cap Rs m 247,993 247,993
Dividends per share (Unadj.) Rs 6.0 6.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for SOLAR INDUSTRIES

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 1.5x during FY21, from 1.3x 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 improved and stood at 9.7x during FY21, from 7.1x 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 18.2% during FY21, from 20.2% 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 22.0% during FY21, from 23.9% 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 11.3% during FY21, from 13.5% 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 1.3 1.5
Debtors’ Days Days 6 7
Interest coverage x 7.1 9.7
Debt to equity ratio x 0.2 0.3
Return on assets % 13.5 11.3
Return on equity % 20.2 18.2
Return on capital employed % 23.9 22.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



To see how SOLAR INDUSTRIES has performed over the last 5 years, please visit here.

SOLAR INDUSTRIES Share Price Performance

Over the last one year, SOLAR INDUSTRIES share price has moved up from Rs 1,022.7 to Rs 2,740.6, registering a gain of Rs 1,717.9 or around 168.0%.

Overall, the S&P BSE SENSEX is up 51.9% over the year.

(To know more, check out historical annual results for SOLAR INDUSTRIES and quarterly results for SOLAR INDUSTRIES)

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Related Views on News

SOLAR INDUSTRIES Announces Quarterly Results (1QFY22); Net Profit Up 129.4% (Quarterly Result Update)

Jul 31, 2021 | Updated on Jul 31, 2021

For the quarter ended June 2021, SOLAR INDUSTRIES has posted a net profit of Rs 1 bn (up 129.4% YoY). Sales on the other hand came in at Rs 8 bn (up 68.0% YoY). Read on for a complete analysis of SOLAR INDUSTRIES's quarterly results.

SOLAR INDUSTRIES Announces Quarterly Results (3QFY21); Net Profit Up 25.2% (Quarterly Result Update)

Feb 1, 2021 | Updated on Feb 1, 2021

For the quarter ended December 2020, SOLAR INDUSTRIES has posted a net profit of Rs 814 m (up 25.2% YoY). Sales on the other hand came in at Rs 6 bn (up 15.1% YoY). Read on for a complete analysis of SOLAR INDUSTRIES's quarterly results.

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