ZEE LEARN 2020-21 Annual Report Analysis

Wed, 31 Mar

ZEE LEARN 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.

ZEE LEARN Income Statement Analysis

• Operating income during the year fell 50.1% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 68.6% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 16.8% in FY21 as against 26.7% in FY20.
• Depreciation charges decreased by 22.1% and finance costs decreased by 12.8% YoY, respectively.
• Other income grew by 35.5% YoY.
• Net profit for the year declined by 184.2% YoY.
• Net profit margins during the year declined from 4.9% in FY20 to 8.2% in FY21.

ZEE LEARN Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	5,148	2,571	-50.1%
Other income	Rs m	416	563	35.5%
Total Revenues	Rs m	5,564	3,134	-43.7%
Gross profit	Rs m	1,372	431	-68.6%
Depreciation	Rs m	641	500	-22.1%
Interest	Rs m	590	515	-12.8%
Profit before tax	Rs m	556	-20	-103.6%
Tax	Rs m	305	191	-37.3%
Profit after tax	Rs m	251	-212	-184.2%
Gross profit margin	%	26.7	16.8
Effective tax rate	%	54.9	-947.6
Net profit margin	%	4.9	-8.2

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ZEE LEARN Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 4 billion as compared to Rs 3 billion in FY20, thereby witnessing an increase of 8.7%.
• Long-term debt down at Rs 3 billion as compared to Rs 3 billion during FY20, a fall of 8.6%.
• Current assets rose 27% and stood at Rs 2 billion, while fixed assets fell 7% and stood at Rs 12 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 14 billion as against Rs 14 billion during FY20, thereby witnessing a fall of 3%.

ZEE LEARN Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	4,660	4,581	-1.7
Current Liabilities	Rs m	3,476	3,777	8.7
Long-term Debt	Rs m	2,741	2,507	-8.6
Total Liabilities	Rs m	14,355	13,929	-3.0
Current assets	Rs m	1,593	2,023	27.0
Fixed Assets	Rs m	12,763	11,906	-6.7
Total Assets	Rs m	14,355	13,929	-3.0

ZEE LEARN Cash Flow Statement Analysis

• ZEE LEARN's cash flow from operating activities (CFO) during FY21 stood at Rs 124 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs 143 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -291 million, an improvement of 81% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -24 million from the Rs -126 million net cash flows seen during FY20.

ZEE LEARN 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	1,217	124	-89.8%
Cash Flow from Investing Activities	Rs m	154	143	-7.3%
Cash Flow from Financing Activities	Rs m	-1,497	-291	-
Net Cash Flow	Rs m	-126	-24	-

Current Valuations for ZEE LEARN

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -0.6, an decline from the EPS of Rs 0.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 10.4, stands at -16.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.7 times, while the price to sales ratio stands at 1.3 times.
• The company's price to cash flow (P/CF) ratio stood at 16.9 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	15.8	7.9
TTM Earnings per share	Rs	0.8	-0.6
Diluted earnings per share	Rs	0.8	-0.6
Price to Cash Flow	x	4.5	16.9
TTM P/E ratio	x	15.8	-16.0
Price / Book Value ratio	x	1.5	1.1
Market Cap	Rs m	6,783	4,873
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for ZEE LEARN

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.5x during FY21, from 0.5x 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 1.0x during FY21, from 1.9x 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 -4.6% during FY21, from 5.4% 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 7.0% during FY21, from 15.5% 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 2.2% during FY21, from 5.9% 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	0.5	0.5
Debtors’ Days	Days	473	1,297
Interest coverage	x	1.9	1.0
Debt to equity ratio	x	0.6	0.5
Return on assets	%	5.9	2.2
Return on equity	%	5.4	-4.6
Return on capital employed	%	15.5	7.0

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

ZEE LEARN Share Price Performance

Over the last one year, ZEE LEARN share price has moved down from Rs 12.2 to Rs 10.4, registering a loss of Rs 1.8 or around 14.9%.

Meanwhile, the S&P BSE IT Index is trading at Rs 26,543.2 (down 0.7%). Over the last one year it has moved up from 12,842.7 to 26,543.2, a gain of 13,701 points (up 106.7%).

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

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

Read: Latest Annual Report Analysis of ZEE LEARN