SWARAJ ENGINES 2021-22 Annual Report Analysis

Fri, 1 Jul

SWARAJ ENGINES has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

SWARAJ ENGINES Income Statement Analysis

• Operating income during the year rose 15.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 14.6% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 13.7% in FY22 as against 13.7% in FY21.
• Depreciation charges decreased by 8.4% and finance costs increased by 2433.3% YoY, respectively.
• Other income grew by 12.0% YoY.
• Net profit for the year grew by 18.3% YoY.
• Net profit margins during the year grew from 9.4% in FY21 to 9.6% in FY22.

SWARAJ ENGINES Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	9,866	11,382	15.4%
Other income	Rs m	86	97	12.0%
Total Revenues	Rs m	9,952	11,478	15.3%
Gross profit	Rs m	1,356	1,554	14.6%
Depreciation	Rs m	198	181	-8.4%
Interest	Rs m	0	1	2,433.3%
Profit before tax	Rs m	1,245	1,469	18.0%
Tax	Rs m	319	374	17.1%
Profit after tax	Rs m	925	1,095	18.3%
Gross profit margin	%	13.7	13.7
Effective tax rate	%	25.7	25.5
Net profit margin	%	9.4	9.6

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SWARAJ ENGINES Balance Sheet Analysis

• The company's current liabilities during FY22 down at Rs 2 billion as compared to Rs 2 billion in FY21, thereby witnessing an decrease of -12.5%.
• Current assets fell 9% and stood at Rs 3 billion, while fixed assets rose 35% and stood at Rs 1 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 5 billion as against Rs 5 billion during FY21, thereby witnessing a growth of 1%.

SWARAJ ENGINES Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	2,800	3,055	9.1
Current Liabilities	Rs m	1,715	1,501	-12.5
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	4,584	4,614	0.7
Current assets	Rs m	3,594	3,280	-8.7
Fixed Assets	Rs m	990	1,334	34.8
Total Assets	Rs m	4,584	4,614	0.7

SWARAJ ENGINES Cash Flow Statement Analysis

• SWARAJ ENGINES's cash flow from operating activities (CFO) during FY22 stood at Rs 1 billion, an improvement of 269.4% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -514 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -840 million on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -320 million from the Rs 355 million net cash flows seen during FY21.

SWARAJ ENGINES Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	280	1,034	269.4%
Cash Flow from Investing Activities	Rs m	563	-514	-
Cash Flow from Financing Activities	Rs m	-487	-840	-
Net Cash Flow	Rs m	355	-320	-

Current Valuations for SWARAJ ENGINES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 90.2, an improvement from the EPS of Rs 76.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,474.7, stands at 16.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.9 times, while the price to sales ratio stands at 1.6 times.
• The company's price to cash flow (P/CF) ratio stood at 15.6 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	812.7	937.5
TTM Earnings per share	Rs	76.2	90.2
Diluted earnings per share	Rs	76.2	90.1
Price to Cash Flow	x	14.2	15.6
TTM P/E ratio	x	17.2	16.4
Price / Book Value ratio	x	5.6	6.5
Market Cap	Rs m	15,726	19,897
Dividends per share (Unadj.)	Rs	69.0	80.0

Ratio Analysis for SWARAJ ENGINES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.2x during FY22, from 2.1x during FY21. 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 1,933.4x during FY22, from 41,495.0x during FY21. 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 35.8% during FY22, from 33.1% during FY22. 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 48.1% during FY22, from 44.5% during FY21. 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 23.7% during FY22, from 20.2% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	2.1	2.2
Debtors’ Days	Days	419	332
Interest coverage	x	41,495.0	1,933.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	20.2	23.7
Return on equity	%	33.1	35.8
Return on capital employed	%	44.5	48.1

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 down from Rs 1,852.7 to Rs 1,474.7, registering a loss of Rs 378.0 or around 20.4%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 25,877.7 (down 0.6%). Over the last one year it has moved up from 22,858.3 to 25,877.7, a gain of 3,019 points (up 13.2%).

Overall, the S&P BSE SENSEX is up 0.1% 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