TIMKEN INDIA 2020-21 Annual Report Analysis

Wed, 31 Mar

TIMKEN INDIA 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.

TIMKEN INDIA Income Statement Analysis

• Operating income during the year fell 12.8% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 30.6% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 17.9% in FY21 as against 22.4% in FY20.
• Depreciation charges decreased by 2.6% and finance costs decreased by 47.6% YoY, respectively.
• Other income declined by 16.2% YoY.
• Net profit for the year declined by 41.8% YoY.
• Net profit margins during the year declined from 15.2% in FY20 to 10.2% in FY21.

TIMKEN INDIA Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	16,169	14,105	-12.8%
Other income	Rs m	234	196	-16.2%
Total Revenues	Rs m	16,403	14,301	-12.8%
Gross profit	Rs m	3,626	2,518	-30.6%
Depreciation	Rs m	769	749	-2.6%
Interest	Rs m	28	14	-47.6%
Profit before tax	Rs m	3,064	1,951	-36.3%
Tax	Rs m	603	519	-13.9%
Profit after tax	Rs m	2,461	1,432	-41.8%
Gross profit margin	%	22.4	17.9
Effective tax rate	%	19.7	26.6
Net profit margin	%	15.2	10.2

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TIMKEN INDIA Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 7 billion as compared to Rs 6 billion in FY20, thereby witnessing an increase of 30.7%.
• Current assets fell 6% and stood at Rs 12 billion, while fixed assets rose 1% and stood at Rs 9 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 22 billion as against Rs 23 billion during FY20, thereby witnessing a fall of 3%.

TIMKEN INDIA Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	15,767	13,435	-14.8
Current Liabilities	Rs m	5,636	7,363	30.7
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	22,554	21,876	-3.0
Current assets	Rs m	13,191	12,441	-5.7
Fixed Assets	Rs m	9,363	9,435	0.8
Total Assets	Rs m	22,554	21,876	-3.0

TIMKEN INDIA Cash Flow Statement Analysis

• TIMKEN INDIA's cash flow from operating activities (CFO) during FY21 stood at Rs 2 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -687 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -4 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -3 billion from the Rs 2 billion net cash flows seen during FY20.

TIMKEN INDIA 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	3,482	1,887	-45.8%
Cash Flow from Investing Activities	Rs m	-1,019	-687	-
Cash Flow from Financing Activities	Rs m	-135	-3,787	-
Net Cash Flow	Rs m	2,302	-2,574	-

Current Valuations for TIMKEN INDIA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 19.0, an decline from the EPS of Rs 32.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,294.8, stands at 68.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 7.2 times, while the price to sales ratio stands at 6.9 times.
• The company's price to cash flow (P/CF) ratio stood at 37.8 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	215.0	187.5
TTM Earnings per share	Rs	32.7	19.0
Diluted earnings per share	Rs	32.7	19.0
Price to Cash Flow	x	17.7	37.8
TTM P/E ratio	x	23.2	68.0
Price / Book Value ratio	x	3.9	6.1
Market Cap	Rs m	61,111	82,378
Dividends per share (Unadj.)	Rs	50.0	1.5

Ratio Analysis for TIMKEN INDIA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.7x during FY21, from 2.3x 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 136.4x during FY21, from 112.4x 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 10.7% during FY21, from 15.6% 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 14.6% during FY21, from 19.6% 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 declined and down at 6.6% during FY21, from 11.0% 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	2.3	1.7
Debtors’ Days	Days	66	96
Interest coverage	x	112.4	136.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	11.0	6.6
Return on equity	%	15.6	10.7
Return on capital employed	%	19.6	14.6

To see how TIMKEN INDIA has performed over the last 5 years, please visit here.

TIMKEN INDIA Share Price Performance

Over the last one year, TIMKEN INDIA share price has moved up from Rs 760.4 to Rs 1,294.8, registering a gain of Rs 534.4 or around 70.3%.

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

(To know more, check out historical annual results for TIMKEN INDIA and quarterly results for TIMKEN INDIA)

Read: Latest Annual Report Analysis of TIMKEN INDIA