ARO GRANITE 2021-22 Annual Report Analysis

Wed, 3 Aug

ARO GRANITE has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

ARO GRANITE Income Statement Analysis

• Operating income during the year rose 25.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 26.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 13.4% in FY22 as against 13.3% in FY21.
• Depreciation charges increased by 15.1% and finance costs increased by 47.4% YoY, respectively.
• Other income grew by 115.3% YoY.
• Net profit for the year grew by 47.3% YoY.
• Net profit margins during the year grew from 3.4% in FY21 to 4.0% in FY22.

ARO GRANITE Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	1,794	2,247	25.3%
Other income	Rs m	6	14	115.3%
Total Revenues	Rs m	1,800	2,261	25.6%
Gross profit	Rs m	238	301	26.4%
Depreciation	Rs m	111	127	15.1%
Interest	Rs m	54	79	47.4%
Profit before tax	Rs m	80	108	35.1%
Tax	Rs m	19	19	-3.1%
Profit after tax	Rs m	60	89	47.3%
Gross profit margin	%	13.3	13.4
Effective tax rate	%	24.2	17.4
Net profit margin	%	3.4	4.0

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ARO GRANITE Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 2 billion as compared to Rs 2 billion in FY21, thereby witnessing an increase of 9.6%.
• Long-term debt stood at Rs 653 million as compared to Rs 418 million during FY21, a growth of 56.3%.
• Current assets rose 23% and stood at Rs 3 billion, while fixed assets fell 3% and stood at Rs 2 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 5 billion as against Rs 4 billion during FY21, thereby witnessing a growth of 12%.

ARO GRANITE Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	1,876	1,964	4.7
Current Liabilities	Rs m	1,612	1,766	9.6
Long-term Debt	Rs m	418	653	56.3
Total Liabilities	Rs m	4,054	4,525	11.6
Current assets	Rs m	2,274	2,793	22.8
Fixed Assets	Rs m	1,780	1,732	-2.7
Total Assets	Rs m	4,054	4,525	11.6

ARO GRANITE Cash Flow Statement Analysis

• ARO GRANITE's cash flow from operating activities (CFO) during FY22 stood at Rs -181 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -62 million, an improvement of 57.0% on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs 239 million, an improvement of 788% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -4 million from the Rs -6 million net cash flows seen during FY21.

ARO GRANITE Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	6	-181	-
Cash Flow from Investing Activities	Rs m	-39	-62	-
Cash Flow from Financing Activities	Rs m	27	239	787.5%
Net Cash Flow	Rs m	-6	-4	-

Current Valuations for ARO GRANITE

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 5.8, an improvement from the EPS of Rs 4.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 45.6, stands at 11.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.4 times, while the price to sales ratio stands at 0.3 times.
• The company's price to cash flow (P/CF) ratio stood at 4.4 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	117.2	146.9
TTM Earnings per share	Rs	4.0	5.8
Diluted earnings per share	Rs	4.0	5.8
Price to Cash Flow	x	3.7	4.4
TTM P/E ratio	x	10.4	11.4
Price / Book Value ratio	x	0.3	0.5
Market Cap	Rs m	650	946
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for ARO GRANITE

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.6x during FY22, from 1.4x during FY21. 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 2.4x during FY22, from 2.5x during FY21. 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 4.5% during FY22, from 3.2% during FY22. 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 7.1% during FY22, from 5.8% during FY21. 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 3.7% during FY22, from 2.8% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	1.4	1.6
Debtors’ Days	Days	1,303	1,187
Interest coverage	x	2.5	2.4
Debt to equity ratio	x	0.2	0.3
Return on assets	%	2.8	3.7
Return on equity	%	3.2	4.5
Return on capital employed	%	5.8	7.1

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

ARO GRANITE Share Price Performance

Over the last one year, ARO GRANITE share price has moved down from Rs 75.8 to Rs 45.6, registering a loss of Rs 30.2 or around 39.9%.

Overall, the S&P BSE SENSEX is up 9.8% over the year.

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

Read: Latest Annual Report Analysis of ARO GRANITE