STEEL STRIPS WHEELS 2020-21 Annual Report Analysis

Wed, 31 Mar

STEEL STRIPS WHEELS 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.

STEEL STRIPS WHEELS Income Statement Analysis

• Operating income during the year rose 11.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 19.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 11.6% in FY21 as against 11.0% in FY20.
• Depreciation charges increased by 0.5% and finance costs decreased by 5.3% YoY, respectively.
• Other income declined by 26.2% YoY.
• Net profit for the year grew by 110.0% YoY.
• Net profit margins during the year grew from 1.5% in FY20 to 2.8% in FY21.

STEEL STRIPS WHEELS Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	15,633	17,494	11.9%
Other income	Rs m	221	163	-26.2%
Total Revenues	Rs m	15,855	17,657	11.4%
Gross profit	Rs m	1,712	2,038	19.0%
Depreciation	Rs m	719	723	0.5%
Interest	Rs m	887	839	-5.3%
Profit before tax	Rs m	327	638	95.2%
Tax	Rs m	93	146	57.6%
Profit after tax	Rs m	234	493	110.0%
Gross profit margin	%	11.0	11.6
Effective tax rate	%	28.3	22.8
Net profit margin	%	1.5	2.8

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STEEL STRIPS WHEELS Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 10 billion as compared to Rs 8 billion in FY20, thereby witnessing an increase of 25.5%.
• Long-term debt down at Rs 4 billion as compared to Rs 4 billion during FY20, a fall of 14.0%.
• Current assets rose 24% and stood at Rs 10 billion, while fixed assets rose 1% and stood at Rs 14 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 24 billion as against Rs 22 billion during FY20, thereby witnessing a growth of 9%.

STEEL STRIPS WHEELS Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	6,959	7,473	7.4
Current Liabilities	Rs m	7,904	9,923	25.5
Long-term Debt	Rs m	4,418	3,798	-14.0
Total Liabilities	Rs m	21,791	23,767	9.1
Current assets	Rs m	7,663	9,508	24.1
Fixed Assets	Rs m	14,128	14,259	0.9
Total Assets	Rs m	21,791	23,767	9.1

STEEL STRIPS WHEELS Cash Flow Statement Analysis

• STEEL STRIPS WHEELS's cash flow from operating activities (CFO) during FY21 stood at Rs 2 billion, an improvement of 62.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -371 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -2 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -385 million from the Rs -293 million net cash flows seen during FY20.

STEEL STRIPS WHEELS 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	1,039	1,691	62.8%
Cash Flow from Investing Activities	Rs m	-693	-371	-
Cash Flow from Financing Activities	Rs m	-639	-1,706	-
Net Cash Flow	Rs m	-293	-385	-

Current Valuations for STEEL STRIPS WHEELS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 31.6, an improvement from the EPS of Rs 15.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 701.0, stands at 44.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.9 times, while the price to sales ratio stands at 0.6 times.
• The company's price to cash flow (P/CF) ratio stood at 7.0 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	1,002.8	1,120.7
TTM Earnings per share	Rs	15.0	31.6
Diluted earnings per share	Rs	7.5	15.8
Price to Cash Flow	x	11.6	7.0
TTM P/E ratio	x	47.0	44.4
Price / Book Value ratio	x	1.4	1.1
Market Cap	Rs m	9,447	8,534
Dividends per share (Unadj.)	Rs	0.0	1.0

Ratio Analysis for STEEL STRIPS WHEELS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.0x during FY21, from 1.0x 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 1.8x during FY21, from 1.4x 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 improved and stood at 6.6% during FY21, from 3.4% 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 13.1% during FY21, from 10.7% 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 5.6% during FY21, from 5.1% 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	1.0	1.0
Debtors’ Days	Days	490	536
Interest coverage	x	1.4	1.8
Debt to equity ratio	x	0.6	0.5
Return on assets	%	5.1	5.6
Return on equity	%	3.4	6.6
Return on capital employed	%	10.7	13.1

To see how STEEL STRIPS WHEELS has performed over the last 5 years, please visit here.

STEEL STRIPS WHEELS Share Price Performance

Over the last one year, STEEL STRIPS WHEELS share price has moved up from Rs 353.4 to Rs 701.0, registering a gain of Rs 347.6 or around 98.4%.

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

(To know more, check out historical annual results for STEEL STRIPS WHEELS and quarterly results for STEEL STRIPS WHEELS)

Read: Latest Annual Report Analysis of STEEL STRIPS WHEELS