GKN Driveline Growth

The company's top line has witnessed a fall of 29% in FY21 from FY20, mostly owing to decrease in the sales of goods by 29%. This was mainly due to lower market demand on account of COVID 19 lockdown in FY21. On the other hand, export sales remained the same with negligible decline of 2%. It must be noted that even with COVID-19 aftermath, the company is confident at getting new businesses from existing customer and potential customers in coming years. 

The company has performed fairly well in terms of managing its expenses in accordance with the revenue. Revenue fell by 29% and the net profit of the company fell only by 11%. It has been brought down by cutting expenses from employee benefit expenses by 7% and falling operating expenses by 40%, owing mostly to power and fuel, by the implementation of a solar power plant in their manufacturing facility. As a result, the net income margin grew by 27% from FY20 to FY21. In FY19, the company incurred a sudden fall in its net profit owing to high interest expense on account of provision for taxes and contingencies, which was then reduced in FY20 by Rs. 13 Cr, resulting in the sudden jump in the net profits in FY20. 

EPS of GKN driveline has fallen in lieu of fall in the net profit of the company and there were no changes made in the number of shares in FY21. 

GKN Driveline's book values were impacted due to fall in the retained earnings of the company by 13%, which was a result of lower net profit in FY21 than FY20 and the final dividend payment for 2019-20 of Rs. 107 Cr. at Rs. 84 per share. Aggregately fall in the book value of the company by 9% in FY21 from FY20. 

EBITDA of the company has shown de-growth of 13% from FY20 in FY21. Although, EBITDA margin grew by 23% from FY20 in FY21, due to write back of provision for interest and penalty on Income tax for Rs. 18 Cr. as the company has opted for Vivad se Vishwas Scheme for settlement of Income tax litigations and lower supplier provisions in FY21 by Rs. 7 Cr.

GKN Driveline's EBIT showed de-growth of 20% from FY20 in FY21. This has been primarily due to the fall in the EBITDA of the company by 13%. Depreciation on the other hand, increased by Rs. 1 Cr in FY21, even with lower additions and higher disposal of tangible assets than FY20, due to purchases of softwares worth Rs. 8 Cr. and higher depreciated expenses associated in FY21.

Tangible assets of the company remained stagnant in FY21 from FY20. Despite this, total assets of the company fell by 8%, owing mostly to a fall in the current assets of the company, primarily cash and cash equivalent of the company, which decreased by Rs. 59 Cr. as a measure to distribute dividends and to make capital expenditure expenses. 

The cash flow of the company has been severely impacted due to the fall in net profits of the company and due to the write back of provision for interest and penalty on income tax for Rs. 18 Cr. as the company has opted for the Vivad se Vishwas Scheme for settlement of income tax litigation. The total receivables of the company have also increased significantly due to COVID-19, hindering the ability to collect, further causing the decrease in the cash flow from operations.