TIPS IND. 2020-21 Annual Report Analysis

Wed, 31 Mar

TIPS IND. 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.

TIPS IND. Income Statement Analysis

• Operating income during the year fell 0.5% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 2844.5% YoY during the fiscal. Operating profit margins witnessed a fall and down at 60.9% in FY21 as against 2.2% in FY20.
• Depreciation charges decreased by 31.2% and finance costs decreased by 92.6% YoY, respectively.
• Other income declined by 72.6% YoY.
• Net profit for the year grew by 283.4% YoY.
• Net profit margins during the year grew from 12.5% in FY20 to 48.0% in FY21.

TIPS IND. Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	910	905	-0.5%
Other income	Rs m	178	49	-72.6%
Total Revenues	Rs m	1,088	954	-12.3%
Gross profit	Rs m	-20	552	-2,844.5%
Depreciation	Rs m	12	8	-31.2%
Interest	Rs m	3	0	-92.6%
Profit before tax	Rs m	144	592	312.5%
Tax	Rs m	30	158	422.2%
Profit after tax	Rs m	113	435	283.4%
Gross profit margin	%	-2.2	60.9
Effective tax rate	%	21.0	26.6
Net profit margin	%	12.5	48.0

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TIPS IND. Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 289 million as compared to Rs 128 million in FY20, thereby witnessing an increase of 125.8%.
• Current assets rose 85% and stood at Rs 1 billion, while fixed assets rose 38% and stood at Rs 374 million in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 2 billion as against Rs 980 million during FY20, thereby witnessing a growth of 72%.

TIPS IND. Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	804	1,013	26.0
Current Liabilities	Rs m	128	289	125.8
Long-term Debt	Rs m	19	0	-100.0
Total Liabilities	Rs m	980	1,687	72.1
Current assets	Rs m	708	1,313	85.4
Fixed Assets	Rs m	272	374	37.7
Total Assets	Rs m	980	1,687	72.1

TIPS IND. Cash Flow Statement Analysis

• TIPS IND.'s cash flow from operating activities (CFO) during FY21 stood at Rs 412 million, an improvement of 35.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -115 million, an improvement of 146.9% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -246 million on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 51 million from the Rs 173 million net cash flows seen during FY20.

TIPS IND. 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	305	412	35.1%
Cash Flow from Investing Activities	Rs m	-47	-115	-
Cash Flow from Financing Activities	Rs m	-86	-246	-
Net Cash Flow	Rs m	173	51	-70.2%

Current Valuations for TIPS IND.

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 33.5, an improvement from the EPS of Rs 7.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 470.3, stands at 14.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.0 times, while the price to sales ratio stands at 6.7 times.
• The company's price to cash flow (P/CF) ratio stood at 9.0 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	63.5	69.8
TTM Earnings per share	Rs	7.9	33.5
Diluted earnings per share	Rs	8.7	33.5
Price to Cash Flow	x	10.0	9.0
TTM P/E ratio	x	11.0	14.0
Price / Book Value ratio	x	1.6	3.9
Market Cap	Rs m	1,316	3,993
Dividends per share (Unadj.)	Rs	1.5	2.0

Ratio Analysis for TIPS IND.

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 4.5x during FY21, from 5.5x 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 improved and stood at 2,821.2x during FY21, from 51.7x 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 42.9% during FY21, from 14.1% 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 58.5% 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 improved and stood at 25.8% during FY21, from 11.9% 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	5.5	4.5
Debtors’ Days	Days	728	608
Interest coverage	x	51.7	2,821.2
Debt to equity ratio	x	0.0	0.0
Return on assets	%	11.9	25.8
Return on equity	%	14.1	42.9
Return on capital employed	%	17.8	58.5

To see how TIPS IND. has performed over the last 5 years, please visit here.

TIPS IND. Share Price Performance

Over the last one year, TIPS IND. share price has moved up from Rs 96.6 to Rs 470.3, registering a gain of Rs 373.7 or around 387.1%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 11,919.9 (down 0.9%). Over the last one year it has moved up from 6,403.4 to 11,919.9, a gain of 5,517 points (up 86.1%).

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

(To know more, check out historical annual results for TIPS IND. and quarterly results for TIPS IND.)

Read: Latest Annual Report Analysis of TIPS IND.