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TRENT 2019-20 Annual Report Analysis
Tue, 31 Mar

TRENT has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

TRENT Income Statement Analysis

  • Operating income during the year rose 33.1% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 130.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 17.5% in FY20 as against 10.1% in FY19.
  • Depreciation charges increased by 378.5% and finance costs increased by 420.1% YoY, respectively.
  • Other income grew by 266.0% YoY.
  • Net profit for the year grew by 28.1% YoY.
  • Net profit margins during the year declined from 4.5% in FY19 to 4.3% in FY20.

TRENT Income Statement 2019-20

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Net Sales Rs m 23,910 31,825 33.1%
Other income Rs m 408 1,494 266.0%
Total Revenues Rs m 24,318 33,320 37.0%
Gross profit Rs m 2,416 5,566 130.4%
Depreciation Rs m 517 2,472 378.5%
Interest Rs m 506 2,634 420.1%
Profit before tax Rs m 1,801 1,954 8.5%
Tax Rs m 736 590 -19.8%
Profit after tax Rs m 1,065 1,364 28.1%
Gross profit margin % 10.1 17.5
Effective tax rate % 40.9 30.2
Net profit margin % 4.5 4.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



New Research: 2 stocks to buy as Nifty50 heads towards 40,000

TRENT Balance Sheet Analysis

  • The company's current liabilities during FY20 down at Rs 5 billion as compared to Rs 6 billion in FY19, thereby witnessing an decrease of -15.1%.
  • Long-term debt stood at Rs 3 billion as compared to Rs 3 billion during FY19, a growth of 0.1%.
  • Current assets rose 94% and stood at Rs 17 billion, while fixed assets rose 120% and stood at Rs 37 billion in FY20.
  • Overall, the total assets and liabilities for FY20 stood at Rs 54 billion as against Rs 26 billion during FY19, thereby witnessing a growth of 111%.

TRENT Balance Sheet as on March 2020

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Networth Rs m 16,465 23,878 45.0
 
Current Liabilities Rs m 5,740 4,873 -15.1
Long-term Debt Rs m 2,996 2,997 0.1
Total Liabilities Rs m 25,588 53,963 110.9
 
Current assets Rs m 8,783 17,035 93.9
Fixed Assets Rs m 16,804 36,928 119.8
Total Assets Rs m 25,588 53,963 110.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



TRENT Cash Flow Statement Analysis

  • TRENT's cash flow from operating activities (CFO) during FY20 stood at Rs 4 billion, an improvement of 1,621.4% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY20 stood at Rs -8 billion, an improvement of 2,101.9% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY20 stood at Rs 5 billion, an improvement of 1,106% on a YoY basis.
  • Overall, net cash flows for the company during FY20 stood at Rs 45 million from the Rs 214 million net cash flows seen during FY19.

TRENT Cash Flow Statement 2019-20

Particulars No. of months 12 12 % Change
Year Ending Mar-19 Mar-20
Cash Flow from Operating Activities Rs m 210 3,612 1,621.4%
Cash Flow from Investing Activities Rs m -370 -8,156 -
Cash Flow from Financing Activities Rs m 375 4,519 1,106.1%
Net Cash Flow Rs m 214 45 -78.8%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for TRENT

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 3.8, an improvement from the EPS of Rs 3.2 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 479.2, stands at 124.9 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 7.1 times, while the price to sales ratio stands at 5.4 times.
  • The company's price to cash flow (P/CF) ratio stood at 52.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Sales per share (Unadj.) Rs 71.9 89.5
TTM Earnings per share Rs 3.2 3.8
Diluted earnings per share Rs 3.0 3.8
Price to Cash Flow x 80.9 52.8
TTM P/E ratio x 100.3 124.9
Price / Book Value ratio x 6.9 8.5
Market Cap Rs m 113,802 202,575
Dividends per share (Unadj.) Rs 1.3 1.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for TRENT

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 3.5x during FY20, from 1.5x during FY19. 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 1.7x during FY20, from 4.6x during FY19. 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 5.7% during FY20, from 6.5% during FY20. 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 17.1% during FY20, from 11.9% during FY19. 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 7.4% during FY20, from 6.1% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Current ratio x 1.5 3.5
Debtors’ Days Days 0 0
Interest coverage x 4.6 1.7
Debt to equity ratio x 0.2 0.1
Return on assets % 6.1 7.4
Return on equity % 6.5 5.7
Return on capital employed % 11.9 17.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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

TRENT Share Price Performance

Over the last one year, TRENT share price has moved up from Rs 359.9 to Rs 479.2, registering a gain of Rs 119.4 or around 33.2%.

Overall, the S&P BSE SENSEX is down 24.2% over the year.

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

Annual Report FAQs

What is the current share price of TRENT?

TRENT currently trades at Rs 3,948.5 per share. You can check out the latest share price performance of TRENT here...

What was the revenue of TRENT in FY20? How does it compare to earlier years?

The revenues of TRENT stood at Rs 33,320 m in FY20, which was up 37.0% compared to Rs 24,318 m reported in FY19.

TRENT's revenue has grown from Rs 17,400 m in FY16 to Rs 33,320 m in FY20.

Over the past 5 years, the revenue of TRENT has grown at a CAGR of 17.6%.

What was the net profit of TRENT in FY20? How does it compare to earlier years?

The net profit of TRENT stood at Rs 1,364 m in FY20, which was up 28.1% compared to Rs 1,065 m reported in FY19.

This compares to a net profit of Rs 1,097 m in FY18 and a net profit of Rs 939 m in FY17.

Over the past 5 years, TRENT net profit has grown at a CAGR of 30.5%.

What does the cash flow statement of TRENT reveal?

The cash flow statement is the financial statement that presents the cash inflows and outflows of a company during a given period of time.

This statement is one of the most useful tools for judging a company's liquidity position. The ratios and parameters in this statement helps test a company's financial health.

The cash flow statement of TRENT reveals:

  • Cash flow from operations increased in FY20 and stood at Rs 3,612 m as compared to Rs 210 m in FY19.
  • Cash flow from investments decreased in FY20 and stood at Rs -8,156 m as compared to Rs -370 m in FY19.
  • Cash flow from financial activity increased in FY20 and stood at Rs 4,519 m as compared to Rs 375 m in FY19.

Here's the cash flow statement of TRENT for the past 5 years.

(Rs m)FY16FY17FY18FY19FY20
From Operations1,0941,0247692103,612
From Investments-983-437-40-370-8,156
From Financial Activity-133-514-7433754,519
Net Cashflow-2374-1521445

What does the Key Ratio analysis of TRENT reveal?

Be it the company's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.

The ratio/financial analysis of TRENT reveals:

  • Operating profit margins witnessed a fall and down at 17.5% in FY20 as against 10.1% in FY19.
  • Net profit margins declined from 4.5% in FY19 to 4.3% in FY20.
  • Debt to Equity ratio for FY20 stood at 0.1 as compared to 0.2 in FY19.

Here's the ratio/financial analysis of TRENT for the past 5 years.

 FY16FY17FY18FY19FY20
Operating Profit Margin (%)6.86.810.910.117.5
Net Profit Margin (%)2.84.95.64.54.3
Debt to Equity Ratio (x)0.10.10.10.20.1

Read: Latest Annual Report Analysis of TRENT

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