NMDC 2020-21 Annual Report Analysis

Wed, 31 Mar

NMDC 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.

NMDC Income Statement Analysis

• Operating income during the year rose 31.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 48.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 57.2% in FY21 as against 50.5% in FY20.
• Depreciation charges decreased by 22.5% and finance costs increased by 70.1% YoY, respectively.
• Other income declined by 31.1% YoY.
• Net profit for the year grew by 73.5% YoY.
• Net profit margins during the year grew from 30.8% in FY20 to 40.6% in FY21.

NMDC Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	116,992	153,701	31.4%
Other income	Rs m	5,144	3,541	-31.1%
Total Revenues	Rs m	122,136	157,242	28.7%
Gross profit	Rs m	59,045	87,874	48.8%
Depreciation	Rs m	2,950	2,287	-22.5%
Interest	Rs m	99	168	70.1%
Profit before tax	Rs m	61,140	88,961	45.5%
Tax	Rs m	25,125	26,486	5.4%
Profit after tax	Rs m	36,015	62,475	73.5%
Gross profit margin	%	50.5	57.2
Effective tax rate	%	41.1	29.8
Net profit margin	%	30.8	40.6

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NMDC Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 97 billion as compared to Rs 91 billion in FY20, thereby witnessing an increase of 7.1%.
• Long-term debt stood at Rs 5 billion as compared to Rs 0 million during FY20, a fall of 0.0%.
• Current assets rose 12% and stood at Rs 148 billion, while fixed assets rose 8% and stood at Rs 259 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 407 billion as against Rs 372 billion during FY20, thereby witnessing a growth of 9%.

NMDC Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	276,731	298,841	8.0
Current Liabilities	Rs m	90,749	97,229	7.1
Long-term Debt	Rs m	0	5,464	0.0
Total Liabilities	Rs m	371,927	407,087	9.5
Current assets	Rs m	132,160	147,874	11.9
Fixed Assets	Rs m	239,767	259,213	8.1
Total Assets	Rs m	371,927	407,087	9.5

NMDC Cash Flow Statement Analysis

• NMDC's cash flow from operating activities (CFO) during FY21 stood at Rs 73 billion, an improvement of 241.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -43 billion, an improvement of 1,280.1% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -26 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 4 billion from the Rs 599 million net cash flows seen during FY20.

NMDC 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	21,260	72,661	241.8%
Cash Flow from Investing Activities	Rs m	-3,128	-43,163	-
Cash Flow from Financing Activities	Rs m	-17,533	-25,913	-
Net Cash Flow	Rs m	599	3,585	498.5%

Current Valuations for NMDC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 21.3, an improvement from the EPS of Rs 11.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 135.3, stands at 6.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.3 times, while the price to sales ratio stands at 2.6 times.
• The company's price to cash flow (P/CF) ratio stood at 4.7 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	38.2	52.4
TTM Earnings per share	Rs	11.8	21.3
Diluted earnings per share	Rs	12.3	21.3
Price to Cash Flow	x	6.0	4.7
TTM P/E ratio	x	6.5	6.3
Price / Book Value ratio	x	1.1	1.0
Market Cap	Rs m	308,481	307,421
Dividends per share (Unadj.)	Rs	5.3	7.8

Ratio Analysis for NMDC

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.5x during FY21, from 1.5x 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 530.2x during FY21, from 619.8x 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 improved and stood at 20.9% during FY21, from 13.0% 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 improved and stood at 29.3% during FY21, from 22.1% 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 improved and stood at 15.4% during FY21, from 9.7% 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	1.5	1.5
Debtors’ Days	Days	7	5
Interest coverage	x	619.8	530.2
Debt to equity ratio	x	0.0	0.0
Return on assets	%	9.7	15.4
Return on equity	%	13.0	20.9
Return on capital employed	%	22.1	29.3

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

NMDC Share Price Performance

Over the last one year, NMDC share price has moved up from Rs 80.0 to Rs 135.3, registering a gain of Rs 55.3 or around 69.1%.

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

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

Read: Latest Annual Report Analysis of NMDC