STAR CEMENT 2020-21 Annual Report Analysis

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STAR CEMENT 2020-21 Annual Report Analysis
Wed, 20 Oct

STAR CEMENT 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.

STAR CEMENT Income Statement Analysis

  • Operating income during the year fell 6.7% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 32.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 15.6% in FY21 as against 21.4% in FY20.
  • Depreciation charges decreased by 3.2% and finance costs decreased by 25.1% YoY, respectively.
  • Other income declined by 4.6% YoY.
  • Net profit for the year declined by 34.9% YoY.
  • Net profit margins during the year declined from 15.3% in FY20 to 10.7% in FY21.

STAR CEMENT Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 18,431 17,199 -6.7%
Other income Rs m 296 282 -4.6%
Total Revenues Rs m 18,727 17,482 -6.7%
Gross profit Rs m 3,942 2,680 -32.0%
Depreciation Rs m 930 900 -3.2%
Interest Rs m 93 70 -25.1%
Profit before tax Rs m 3,215 1,993 -38.0%
Tax Rs m 342 121 -64.5%
Profit after tax Rs m 2,873 1,871 -34.9%
Gross profit margin % 21.4 15.6
Effective tax rate % 10.6 6.1
Net profit margin % 15.3 10.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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STAR CEMENT Balance Sheet Analysis

  • The company's current liabilities during FY21 stood at Rs 4 billion as compared to Rs 3 billion in FY20, thereby witnessing an increase of 21.3%.
  • Long-term debt down at Rs 2 million as compared to Rs 7 million during FY20, a fall of 74.8%.
  • Current assets rose 18% and stood at Rs 13 billion, while fixed assets rose 2% and stood at Rs 11 billion in FY21.
  • Overall, the total assets and liabilities for FY21 stood at Rs 23 billion as against Rs 21 billion during FY20, thereby witnessing a growth of 10%.

STAR CEMENT Balance Sheet as on March 2021

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Networth Rs m 18,571 20,742 11.7
 
Current Liabilities Rs m 3,037 3,684 21.3
Long-term Debt Rs m 7 2 -74.8
Total Liabilities Rs m 21,217 23,361 10.1
 
Current assets Rs m 10,595 12,530 18.3
Fixed Assets Rs m 10,623 10,831 2.0
Total Assets Rs m 21,217 23,361 10.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



STAR CEMENT Cash Flow Statement Analysis

  • STAR CEMENT's cash flow from operating activities (CFO) during FY21 stood at Rs 4 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY21 stood at Rs -3 billion, an improvement of 145.7% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY21 stood at Rs -33 million, an improvement of 98% on a YoY basis.
  • Overall, net cash flows for the company during FY21 stood at Rs 159 million from the Rs 1 billion net cash flows seen during FY20.

STAR CEMENT 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 4,830 3,523 -27.0%
Cash Flow from Investing Activities Rs m -1,355 -3,330 -
Cash Flow from Financing Activities Rs m -2,013 -33 -
Net Cash Flow Rs m 1,461 159 -89.1%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for STAR CEMENT

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 4.5, an decline from the EPS of Rs 7.0 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 101.9, stands at 19.9 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 2.1 times.
  • The company's price to cash flow (P/CF) ratio stood at 15.2 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 44.7 41.7
TTM Earnings per share Rs 7.0 4.5
Diluted earnings per share Rs 7.0 4.5
Price to Cash Flow x 11.1 15.2
TTM P/E ratio x 19.9 19.9
Price / Book Value ratio x 2.1 1.8
Market Cap Rs m 42,027 42,027
Dividends per share (Unadj.) Rs 1.0 0.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for STAR CEMENT

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 3.4x during FY21, from 3.5x 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 29.5x during FY21, from 35.4x 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 9.0% during FY21, from 15.5% 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 9.9% during FY21, from 17.8% 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 8.3% during FY21, from 14.0% 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 3.5 3.4
Debtors’ Days Days 242 280
Interest coverage x 35.4 29.5
Debt to equity ratio x 0.0 0.0
Return on assets % 14.0 8.3
Return on equity % 15.5 9.0
Return on capital employed % 17.8 9.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



To see how STAR CEMENT has performed over the last 5 years, please visit here.

STAR CEMENT Share Price Performance

Over the last one year, STAR CEMENT share price has moved up from Rs 82.4 to Rs 101.9, registering a gain of Rs 19.6 or around 23.7%.

Overall, the S&P BSE SENSEX is up 52.1% over the year.

(To know more, check out historical annual results for STAR CEMENT and quarterly results for STAR CEMENT)

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