KENNAMETAL INDIA 2020-21 Annual Report Analysis

Wed, 30 Jun

KENNAMETAL INDIA has announced its results for the year ended June 2021. Let us have a look at the detailed performance review of the company during FY20-21.

KENNAMETAL INDIA Income Statement Analysis

• Operating income during the year rose 21.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 97.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 15.2% in FY as against 9.3% in FY.
• Depreciation charges increased by 10.2% and finance costs decreased by 84.2% YoY, respectively.
• Other income declined by 45.2% YoY.
• Net profit for the year grew by 116.2% YoY.
• Net profit margins during the year grew from 4.8% in FY to 8.6% in FY.

KENNAMETAL INDIA Income Statement 2020-21

No. of Mths Year Ending		12 Jun-20*	12 Jun-21*	% Change
Net Sales	Rs m	7,050	8,537	21.1%
Other income	Rs m	126	69	-45.2%
Total Revenues	Rs m	7,176	8,606	19.9%
Gross profit	Rs m	658	1,298	97.3%
Depreciation	Rs m	344	379	10.2%
Interest	Rs m	19	3	-84.2%
Profit before tax	Rs m	421	985	134.0%
Tax	Rs m	82	252	207.3%
Profit after tax	Rs m	339	733	116.2%
Gross profit margin	%	9.3	15.2
Effective tax rate	%	19.5	25.6
Net profit margin	%	4.8	8.6

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KENNAMETAL INDIA Balance Sheet Analysis

• The company's current liabilities during FY stood at Rs 2 billion as compared to Rs 1 billion in FY, thereby witnessing an increase of 36.5%.
• Current assets rose 28% and stood at Rs 5 billion, while fixed assets rose 1% and stood at Rs 6 billion in FY.
• Overall, the total assets and liabilities for FY stood at Rs 11 billion as against Rs 10 billion during FY, thereby witnessing a growth of 11%.

KENNAMETAL INDIA Balance Sheet as on June 2021

No. of Mths Year Ending		12 Jun-20*	12 Jun-21*	% Change
Networth	Rs m	5,556	5,850	5.3
Current Liabilities	Rs m	1,376	1,878	36.5
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	9,519	10,544	10.8
Current assets	Rs m	3,550	4,542	27.9
Fixed Assets	Rs m	5,969	6,002	0.6
Total Assets	Rs m	9,519	10,544	10.8

KENNAMETAL INDIA Cash Flow Statement Analysis

• KENNAMETAL INDIA's cash flow from operating activities (CFO) during FY stood at Rs 2 billion, an improvement of 394.0% on a YoY basis.
• Cash flow from investing activities (CFI) during FY stood at Rs -245 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY stood at Rs -573 million on a YoY basis.
• Overall, net cash flows for the company during FY stood at Rs 842 million from the Rs -191 million net cash flows seen during FY.

KENNAMETAL INDIA Cash Flow Statement 2020-21

Particulars	No. of months	12	12	% Change
	Year Ending	Jun-20	Jun-21
Cash Flow from Operating Activities	Rs m	336	1,660	394.0%
Cash Flow from Investing Activities	Rs m	-537	-245	-
Cash Flow from Financing Activities	Rs m	10	-573	-
Net Cash Flow	Rs m	-191	842	-

Current Valuations for KENNAMETAL INDIA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 33.3, an improvement from the EPS of Rs 15.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,216.1, stands at 36.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.6 times, while the price to sales ratio stands at 3.1 times.
• The company's price to cash flow (P/CF) ratio stood at 20.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Jun-20*	12 Jun-21*
Sales per share (Unadj.)	Rs	320.7	388.4
TTM Earnings per share	Rs	15.4	33.3
Diluted earnings per share	Rs	15.4	33.4
Price to Cash Flow	x	24.1	20.3
TTM P/E ratio	x	48.5	36.5
Price / Book Value ratio	x	3.6	3.9
Market Cap	Rs m	20,092	22,583
Dividends per share (Unadj.)	Rs	0.0	20.0

Ratio Analysis for KENNAMETAL INDIA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.4x during FY, from 2.6x during FY. 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 329.3x during FY, from 23.2x during FY. 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 12.5% during FY, from 6.1% during FY. 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 16.9% during FY, from 7.9% during FY. 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 7.0% during FY, from 3.8% during FY. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Jun-20*	12 Jun-21*
Current ratio	x	2.6	2.4
Debtors’ Days	Days	47	48
Interest coverage	x	23.2	329.3
Debt to equity ratio	x	0.0	0.0
Return on assets	%	3.8	7.0
Return on equity	%	6.1	12.5
Return on capital employed	%	7.9	16.9

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

KENNAMETAL INDIA Share Price Performance

Over the last one year, KENNAMETAL INDIA share price has moved up from Rs 700.5 to Rs 1,107.3, registering a gain of Rs 406.8 or around 58.1%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 21,095.8 (down 0.4%). Over the last one year it has moved up from 10,979.5 to 21,095.8, a gain of 10,116 points (up 92.1%).

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

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

Read: Latest Annual Report Analysis of KENNAMETAL INDIA