TRENT 2020-21 Annual Report Analysis

Wed, 31 Mar

TRENT 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.

TRENT Income Statement Analysis

• Operating income during the year fell 26.0% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 67.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 7.8% in FY21 as against 17.5% in FY20.
• Depreciation charges increased by 4.1% and finance costs decreased by 1.0% YoY, respectively.
• Other income grew by 34.9% YoY.
• Net profit for the year declined by 180.5% YoY.
• Net profit margins during the year declined from 4.3% in FY20 to 4.7% in FY21.

TRENT Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	31,825	23,544	-26.0%
Other income	Rs m	1,494	2,016	34.9%
Total Revenues	Rs m	33,320	25,560	-23.3%
Gross profit	Rs m	5,566	1,830	-67.1%
Depreciation	Rs m	2,472	2,573	4.1%
Interest	Rs m	2,634	2,608	-1.0%
Profit before tax	Rs m	1,954	-1,335	-168.3%
Tax	Rs m	590	-237	-140.1%
Profit after tax	Rs m	1,364	-1,098	-180.5%
Gross profit margin	%	17.5	7.8
Effective tax rate	%	30.2	17.8
Net profit margin	%	4.3	-4.7

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TRENT Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 8 billion as compared to Rs 5 billion in FY20, thereby witnessing an increase of 54.2%.
• Current assets fell 18% and stood at Rs 14 billion, while fixed assets rose 14% and stood at Rs 42 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 56 billion as against Rs 54 billion during FY20, thereby witnessing a growth of 4%.

TRENT Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	23,878	23,130	-3.1
Current Liabilities	Rs m	4,873	7,514	54.2
Long-term Debt	Rs m	2,997	0	-100.0
Total Liabilities	Rs m	53,963	56,092	3.9
Current assets	Rs m	17,035	14,034	-17.6
Fixed Assets	Rs m	36,928	42,059	13.9
Total Assets	Rs m	53,963	56,092	3.9

TRENT Cash Flow Statement Analysis

• TRENT's cash flow from operating activities (CFO) during FY21 stood at Rs 3 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs 157 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -3 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 196 million from the Rs 45 million net cash flows seen during FY20.

TRENT 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	3,612	2,850	-21.1%
Cash Flow from Investing Activities	Rs m	-8,156	157	-
Cash Flow from Financing Activities	Rs m	4,519	-2,831	-
Net Cash Flow	Rs m	45	196	332.4%

Current Valuations for TRENT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -3.1, an decline from the EPS of Rs 3.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 751.5, stands at -243.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 11.5 times, while the price to sales ratio stands at 11.3 times.
• The company's price to cash flow (P/CF) ratio stood at 162.3 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	89.5	66.2
TTM Earnings per share	Rs	3.8	-3.1
Diluted earnings per share	Rs	3.8	-3.1
Price to Cash Flow	x	44.4	162.3
TTM P/E ratio	x	124.9	-243.4
Price / Book Value ratio	x	8.5	10.3
Market Cap	Rs m	202,575	239,376
Dividends per share (Unadj.)	Rs	1.0	0.6

Ratio Analysis for TRENT

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.9x during FY21, from 3.5x 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 deteriorated and stood at 0.5x during FY21, from 1.7x 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 declined and down at -4.7% during FY21, from 5.7% 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 5.5% during FY21, from 17.1% 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 2.7% during FY21, from 7.4% 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	3.5	1.9
Debtors’ Days	Days	0	0
Interest coverage	x	1.7	0.5
Debt to equity ratio	x	0.1	0.0
Return on assets	%	7.4	2.7
Return on equity	%	5.7	-4.7
Return on capital employed	%	17.1	5.5

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 479.2 to Rs 751.5, registering a gain of Rs 272.3 or around 56.8%.

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

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

Read: Latest Annual Report Analysis of TRENT