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SWARAJ ENGINES 2020-21 Annual Report Analysis

Wed, 31 Mar

SWARAJ ENGINES 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.

SWARAJ ENGINES Income Statement Analysis

• Operating income during the year rose 27.6% on a year-on-year (YoY) basis.
• The company's operating profit increased by 35.1% YoY during the fiscal. Operating profit margins witnessed a fall and down at 13.7% in FY21 as against 13.0% in FY20.
• Depreciation charges decreased by 1.8% and finance costs decreased by 78.6% YoY, respectively.
• Other income declined by 32.8% YoY.
• Net profit for the year grew by 30.3% YoY.
• Net profit margins during the year grew from 9.2% in FY20 to 9.4% in FY21.

SWARAJ ENGINES Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	7,733	9,866	27.6%
Other income	Rs m	128	86	-32.8%
Total Revenues	Rs m	7,861	9,952	26.6%
Gross profit	Rs m	1,004	1,356	35.1%
Depreciation	Rs m	201	198	-1.8%
Interest	Rs m	0	0	-78.6%
Profit before tax	Rs m	931	1,245	33.7%
Tax	Rs m	220	319	45.0%
Profit after tax	Rs m	710	925	30.3%
Gross profit margin	%	13.0	13.7
Effective tax rate	%	23.7	25.7
Net profit margin	%	9.2	9.4

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SWARAJ ENGINES Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 2 billion as compared to Rs 1 billion in FY20, thereby witnessing an increase of 55.6%.
• Current assets rose 48% and stood at Rs 4 billion, while fixed assets fell 12% and stood at Rs 990 million in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 5 billion as against Rs 4 billion during FY20, thereby witnessing a growth of 29%.

SWARAJ ENGINES Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	2,352	2,800	19.0
Current Liabilities	Rs m	1,103	1,715	55.6
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	3,550	4,584	29.1
Current assets	Rs m	2,428	3,594	48.0
Fixed Assets	Rs m	1,122	990	-11.8
Total Assets	Rs m	3,550	4,584	29.1

SWARAJ ENGINES Cash Flow Statement Analysis

• SWARAJ ENGINES's cash flow from operating activities (CFO) during FY21 stood at Rs 280 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs 563 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -487 million, an improvement of 33% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 355 million from the Rs -5 million net cash flows seen during FY20.

SWARAJ ENGINES 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	996	280	-71.9%
Cash Flow from Investing Activities	Rs m	-269	563	-
Cash Flow from Financing Activities	Rs m	-731	-487	-
Net Cash Flow	Rs m	-5	355	-

Current Valuations for SWARAJ ENGINES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 76.2, an improvement from the EPS of Rs 58.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,312.2, stands at 17.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.7 times, while the price to sales ratio stands at 1.6 times.
• The company's price to cash flow (P/CF) ratio stood at 14.0 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	637.5	812.7
TTM Earnings per share	Rs	58.6	76.2
Diluted earnings per share	Rs	58.5	76.2
Price to Cash Flow	x	12.0	14.0
TTM P/E ratio	x	15.4	17.2
Price / Book Value ratio	x	5.8	5.6
Market Cap	Rs m	13,726	15,726
Dividends per share (Unadj.)	Rs	40.0	69.0

Ratio Analysis for SWARAJ ENGINES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.1x during FY21, from 2.2x 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 41,495.0x during FY21, from 6,649.1x 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 improved and stood at 33.1% during FY21, from 30.2% 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 improved and stood at 44.5% during FY21, from 39.6% 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 20.2% during FY21, from 20.0% 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	2.2	2.1
Debtors’ Days	Days	20	419
Interest coverage	x	6,649.1	41,495.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	20.0	20.2
Return on equity	%	30.2	33.1
Return on capital employed	%	39.6	44.5

To see how SWARAJ ENGINES has performed over the last 5 years, please visit here.

SWARAJ ENGINES Share Price Performance

Over the last one year, SWARAJ ENGINES share price has moved up from Rs 900.0 to Rs 1,312.2, registering a gain of Rs 412.2 or around 45.8%.

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 SWARAJ ENGINES and quarterly results for SWARAJ ENGINES)

Read: Latest Annual Report Analysis of SWARAJ ENGINES