BHARAT FORGE 2020-21 Annual Report Analysis
Tue, 10 Aug

BHARAT FORGE 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.

BHARAT FORGE Income Statement Analysis

  • Operating income during the year fell 21.3% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 47.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 8.6% in FY21 as against 12.8% in FY20.
  • Depreciation charges increased by 11.1% and finance costs decreased by 37.1% YoY, respectively.
  • Other income declined by 10.1% YoY.
  • Net profit for the year declined by 124.7% YoY.
  • Net profit margins during the year declined from 4.8% in FY20 to 1.5% in FY21.

BHARAT FORGE Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 80,558 63,363 -21.3%
Other income Rs m 1,879 1,689 -10.1%
Total Revenues Rs m 82,437 65,052 -21.1%
Gross profit Rs m 10,314 5,471 -47.0%
Depreciation Rs m 5,433 6,037 11.1%
Interest Rs m 1,713 1,077 -37.1%
Profit before tax Rs m 5,046 45 -99.1%
Tax Rs m 1,125 1,015 -9.7%
Profit after tax Rs m 3,921 -970 -124.7%
Gross profit margin % 12.8 8.6
Effective tax rate % 22.3 2,245.8
Net profit margin % 4.8 -1.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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BHARAT FORGE Balance Sheet Analysis

  • The company's current liabilities during FY21 stood at Rs 45 billion as compared to Rs 40 billion in FY20, thereby witnessing an increase of 13.9%.
  • Long-term debt stood at Rs 22 billion as compared to Rs 19 billion during FY20, a growth of 18.3%.
  • Current assets rose 18% and stood at Rs 62 billion, while fixed assets rose 11% and stood at Rs 69 billion in FY21.
  • Overall, the total assets and liabilities for FY21 stood at Rs 131 billion as against Rs 115 billion during FY20, thereby witnessing a growth of 14%.

BHARAT FORGE Balance Sheet as on March 2021

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Networth Rs m 52,197 54,151 3.7
 
Current Liabilities Rs m 39,674 45,177 13.9
Long-term Debt Rs m 18,747 22,172 18.3
Total Liabilities Rs m 114,824 130,878 14.0
 
Current assets Rs m 52,711 62,144 17.9
Fixed Assets Rs m 62,114 68,733 10.7
Total Assets Rs m 114,824 130,878 14.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



BHARAT FORGE Cash Flow Statement Analysis

  • BHARAT FORGE's cash flow from operating activities (CFO) during FY21 stood at Rs 10 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY21 stood at Rs -15 billion, an improvement of 33.5% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY21 stood at Rs 6 billion, an improvement of 252% on a YoY basis.
  • Overall, net cash flows for the company during FY21 stood at Rs 1 billion from the Rs 264 million net cash flows seen during FY20.

BHARAT FORGE 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 15,220 10,200 -33.0%
Cash Flow from Investing Activities Rs m -11,322 -15,111 -
Cash Flow from Financing Activities Rs m -3,814 5,783 -
Net Cash Flow Rs m 264 1,347 410.0%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for BHARAT FORGE

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs -2.1, an decline from the EPS of Rs 8.4 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 751.5, stands at -360.6 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 3.8 times, while the price to sales ratio stands at 3.2 times.
  • The company's price to cash flow (P/CF) ratio stood at 69.1 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 173.0 136.1
TTM Earnings per share Rs 8.4 -2.1
Diluted earnings per share Rs 8.4 -2.1
Price to Cash Flow x 37.4 69.1
TTM P/E ratio x -360.6 -360.6
Price / Book Value ratio x 3.4 3.8
Market Cap Rs m 349,890 349,890
Dividends per share (Unadj.) Rs 3.5 2.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for BHARAT FORGE

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 1.4x during FY21, from 1.3x 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 1.0x during FY21, from 3.9x 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 -1.8% during FY21, from 7.5% 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 1.5% during FY21, from 9.5% 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 0.1% during FY21, from 4.9% 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 1.3 1.4
Debtors’ Days Days 68 81
Interest coverage x 3.9 1.0
Debt to equity ratio x 0.4 0.4
Return on assets % 4.9 0.1
Return on equity % 7.5 -1.8
Return on capital employed % 9.5 1.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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

BHARAT FORGE Share Price Performance

Over the last one year, BHARAT FORGE share price has moved up from Rs 422.8 to Rs 751.5, registering a gain of Rs 328.8 or around 77.8%.

Overall, the S&P BSE SENSEX is up 43.5% over the year.

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