UNITED DRILLING TOOLS 2020-21 Annual Report Analysis

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UNITED DRILLING TOOLS 2020-21 Annual Report Analysis
Tue, 2 Nov

UNITED DRILLING TOOLS 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.

UNITED DRILLING TOOLS Income Statement Analysis

  • Operating income during the year rose 27.8% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 26.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 27.3% in FY21 as against 47.5% in FY20.
  • Depreciation charges decreased by 0.8% and finance costs increased by 72.9% YoY, respectively.
  • Other income grew by 25.0% YoY.
  • Net profit for the year declined by 27.7% YoY.
  • Net profit margins during the year declined from 39.4% in FY20 to 22.3% in FY21.

UNITED DRILLING TOOLS Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 1,118 1,429 27.8%
Other income Rs m 29 36 25.0%
Total Revenues Rs m 1,147 1,465 27.8%
Gross profit Rs m 530 390 -26.4%
Depreciation Rs m 27 27 -0.8%
Interest Rs m 5 9 72.9%
Profit before tax Rs m 528 391 -25.8%
Tax Rs m 75 64 -14.5%
Profit after tax Rs m 452 327 -27.7%
Gross profit margin % 47.5 27.3
Effective tax rate % 14.3 16.5
Net profit margin % 39.4 22.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



ALERT: Top Investment Recommendation for 2022

UNITED DRILLING TOOLS Balance Sheet Analysis

  • The company's current liabilities during FY21 stood at Rs 406 million as compared to Rs 134 million in FY20, thereby witnessing an increase of 202.4%.
  • Long-term debt down at Rs 1 million as compared to Rs 4 million during FY20, a fall of 70.4%.
  • Current assets rose 114% and stood at Rs 1 billion, while fixed assets fell 7% and stood at Rs 1 billion in FY21.
  • Overall, the total assets and liabilities for FY21 stood at Rs 2 billion as against Rs 2 billion during FY20, thereby witnessing a growth of 31%.

UNITED DRILLING TOOLS Balance Sheet as on March 2021

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Networth Rs m 1,641 1,937 18.1
 
Current Liabilities Rs m 134 406 202.4
Long-term Debt Rs m 4 1 -70.4
Total Liabilities Rs m 1,832 2,401 31.1
 
Current assets Rs m 574 1,228 113.9
Fixed Assets Rs m 1,258 1,173 -6.7
Total Assets Rs m 1,832 2,401 31.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



UNITED DRILLING TOOLS Cash Flow Statement Analysis

  • UNITED DRILLING TOOLS's cash flow from operating activities (CFO) during FY21 stood at Rs -48 million on a YoY basis.
  • Cash flow from investing activities (CFI) during FY21 stood at Rs -151 million, an improvement of 1,064.1% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY21 stood at Rs 148 million, an improvement of 219% on a YoY basis.
  • Overall, net cash flows for the company during FY21 stood at Rs -50 million from the Rs -4 million net cash flows seen during FY20.

UNITED DRILLING TOOLS 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 133 -48 -
Cash Flow from Investing Activities Rs m -13 -151 -
Cash Flow from Financing Activities Rs m -124 148 -
Net Cash Flow Rs m -4 -50 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for UNITED DRILLING TOOLS

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 16.1, an decline from the EPS of Rs 22.3 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 451.3, stands at 23.1 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.3 times, while the price to sales ratio stands at 3.1 times.
  • The company's price to cash flow (P/CF) ratio stood at 25.9 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 55.0 70.4
TTM Earnings per share Rs 22.3 16.1
Diluted earnings per share Rs 22.3 16.1
Price to Cash Flow x 19.1 25.9
TTM P/E ratio x 23.1 23.1
Price / Book Value ratio x 1.4 2.3
Market Cap Rs m 9,163 9,163
Dividends per share (Unadj.) Rs 4.6 2.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for UNITED DRILLING TOOLS

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 3.0x during FY21, from 4.3x 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 deteriorated and stood at 45.7x during FY21, from 105.3x 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 16.9% during FY21, from 27.6% 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 20.6% during FY21, from 32.4% 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 14.0% during FY21, from 25.0% 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 4.3 3.0
Debtors’ Days Days 404 1,537
Interest coverage x 105.3 45.7
Debt to equity ratio x 0.0 0.0
Return on assets % 25.0 14.0
Return on equity % 27.6 16.9
Return on capital employed % 32.4 20.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



To see how UNITED DRILLING TOOLS has performed over the last 5 years, please visit here.

UNITED DRILLING TOOLS Share Price Performance

Over the last one year, UNITED DRILLING TOOLS share price has moved up from Rs 246.5 to Rs 451.3, registering a gain of Rs 204.9 or around 83.1%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 27,223.2 (up 0.7%). Over the last one year it has moved up from 14,234.2 to 27,223.2, a gain of 12,989 points (up 91.3%).

Overall, the S&P BSE SENSEX is up 51.0% over the year.

(To know more, check out historical annual results for UNITED DRILLING TOOLS and quarterly results for UNITED DRILLING TOOLS)

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