VEDANTA 2020-21 Annual Report Analysis

Wed, 31 Mar

VEDANTA 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.

VEDANTA Income Statement Analysis

• Operating income during the year rose 4.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 707.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 30.3% in FY21 as against 3.9% in FY20.
• Depreciation charges decreased by 16.0% and finance costs increased by 4.7% YoY, respectively.
• Other income grew by 36.3% YoY.
• Net profit for the year declined by 417.0% YoY.
• Net profit margins during the year grew from 5.6% in FY20 to 17.1% in FY21.

VEDANTA Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	844,470	880,210	4.2%
Other income	Rs m	25,100	34,210	36.3%
Total Revenues	Rs m	869,570	914,420	5.2%
Gross profit	Rs m	33,010	266,400	707.0%
Depreciation	Rs m	90,930	76,380	-16.0%
Interest	Rs m	49,770	52,100	4.7%
Profit before tax	Rs m	-82,590	172,130	-308.4%
Tax	Rs m	-35,160	21,800	-162.0%
Profit after tax	Rs m	-47,430	150,330	-417.0%
Gross profit margin	%	3.9	30.3
Effective tax rate	%	42.6	12.7
Net profit margin	%	-5.6	17.1

Must See: These Segments are Witnessing Incredible Growth with Modi's Push

VEDANTA Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 591 billion as compared to Rs 633 billion in FY20, thereby witnessing an decrease of -6.6%.
• Long-term debt stood at Rs 380 billion as compared to Rs 367 billion during FY20, a growth of 3.4%.
• Current assets fell 2% and stood at Rs 562 billion, while fixed assets rose 4% and stood at Rs 1,236 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 1,798 billion as against Rs 1,767 billion during FY20, thereby witnessing a growth of 2%.

VEDANTA Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	543,860	621,070	14.2
Current Liabilities	Rs m	633,220	591,240	-6.6
Long-term Debt	Rs m	367,240	379,620	3.4
Total Liabilities	Rs m	1,767,330	1,798,370	1.8
Current assets	Rs m	575,200	561,920	-2.3
Fixed Assets	Rs m	1,192,130	1,236,450	3.7
Total Assets	Rs m	1,767,330	1,798,370	1.8

VEDANTA Cash Flow Statement Analysis

• VEDANTA's cash flow from operating activities (CFO) during FY21 stood at Rs 240 billion, an improvement of 24.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -68 billion, an improvement of 14.5% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -176 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -3 billion from the Rs -22 billion net cash flows seen during FY20.

VEDANTA 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	193,000	239,800	24.2%
Cash Flow from Investing Activities	Rs m	-58,940	-67,500	-
Cash Flow from Financing Activities	Rs m	-155,470	-175,650	-
Net Cash Flow	Rs m	-21,720	-2,630	-

Current Valuations for VEDANTA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 40.4, an improvement from the EPS of Rs -12.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 228.7, stands at 5.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.4 times, while the price to sales ratio stands at 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 2.4 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	227.0	236.6
TTM Earnings per share	Rs	-12.8	40.4
Diluted earnings per share	Rs	-12.8	40.4
Price to Cash Flow	x	5.5	2.4
TTM P/E ratio	x	-5.7	5.7
Price / Book Value ratio	x	0.9	0.9
Market Cap	Rs m	491,040	545,352
Dividends per share (Unadj.)	Rs	3.9	9.5

Ratio Analysis for VEDANTA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.0x during FY21, from 0.9x 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 improved and stood at 4.3x during FY21, from -0.7x 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 24.2% during FY21, from -8.7% 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 22.4% during FY21, from -3.6% 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 11.3% during FY21, from 0.1% 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	0.9	1.0
Debtors’ Days	Days	1	1
Interest coverage	x	-0.7	4.3
Debt to equity ratio	x	0.7	0.6
Return on assets	%	0.1	11.3
Return on equity	%	-8.7	24.2
Return on capital employed	%	-3.6	22.4

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

VEDANTA Share Price Performance

Over the last one year, VEDANTA share price has moved up from Rs 64.8 to Rs 228.7, registering a gain of Rs 163.9 or around 253.1%.

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

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

Read: Latest Annual Report Analysis of VEDANTA