Balmer Lawrie Van Leer Growth

In FY21, the company's debt to equity ratio increased as the long term debt increased by 35.6% y-o-y and the equity increased less than the increase in long term debt. The company is planning to expand the product portfolio by adding new capacities and products in Plastic and Rubber Gasket segments, hence which could be one of the reason for increased borrowings. 

In FY21, the company's current ratio decreased by 1.6% y-o-y due to increase in current assets by 7.6% y-o-y and increase in current liabilities by 6.7% y-o-y. Current assets increased due to increase in trade receivables and other current assets. Current Liabilities increased with increase in trade payables and other financial liabilities. The company has earned revenue by selling its products on credit due to which the trade receivable has increased but has purchased goods on credit in larger quantity which is the reason current liabilities is more than current assets.

In FY21, the company's quick ratio decreased by 2.3% y-o-y due to increase in current liabilities by 6.7% y-o-y. Current assets increased due to increase in trade receivables and other current assets as the company sold its products on credit. Current liabilities increased with increase in trade payables and other financial liabilities as the company purchased its goods on credit. Also the company had purchased goods on credit in large quantities than selling its products on credit which is the reason current liabilities is more than the quick assets.

In FY21, the company's interest coverage ratio increased by 3.5% y-o-y as the finance cost reduced by 19.2% y-o-y. Although, EBIT reduced by 16% y-o-y due to reduction in revenues, reduction in EBIT was less than the reduction in finance cost y-o-y. 

In FY21, the company's operating profit EBIT margin reduced to 9.46% from 11.07% y-o-y. EBIT margin reduced due to reduction in revenues by 3% and with total expenses increasing by 1%.

In FY21, the company's PBT margin reduced to 7.6% from 8.82% y-o-y. EBIT margin reduced due to reduction in revenues by 3% and with total expenses increasing by 1%. Also, due to reduction in finance cost to Rs. 7.92 crores from Rs. 9.80 crores there is reduction in PBT margin.

In FY21, the company's PAT margin increased by 4% y-o-y due to 54% less tax expenses y-o-y. 

In FY21, the company's ROE decreased by 6.87% y-o-y. As per dupont analysis, one major contributor explaining the growth of the company has been net income margin which increased by 6.7%. Asset turnover ratio, on the other hand fell 15.6%, y-o-y, which was a result on account of higher intangible assets under development by 62% y-o-y and higher receivables received by the company which increased by 24%. The equity multiplier of the company also increased marginally as the company's retained earnings increased by 24.2% y-o-y to INR 107.18 crores. Also the total revenue of the company decreased in FY21 due to covid-19 restrictions which led to the fall in the company's ROE.

In FY21, there is a gradual decline in ROCE primarily on account of higher capital work in progress in 2020 as compared to 2020. Capital work in progress has been increased from INR 19 crores in 2019 to INR 51 crores in 2020 on account of increase in cash balances and inventory level.

In FY21, there is decrease in ROA% of the company primarily on account of higher intangible assets under development by 62% y-o-y. Other intangible assets include computer software and capital work in progress which are assets not yet ready for use. The company expects the capital work in progress to provide increased revenues for the company in the future. In addition, the company received higher total receivables by 24% y-o-y.