AARTI INDUSTRIES 2021-22 Annual Report Analysis

Mon, 12 Sep

AARTI INDUSTRIES 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.

AARTI INDUSTRIES Income Statement Analysis

• Operating income during the year rose 52.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 96.5% YoY during the fiscal. Operating profit margins witnessed a fall and down at 31.7% in FY22 as against 24.6% in FY21.
• Depreciation charges increased by 24.7% and finance costs increased by 32.3% YoY, respectively.
• Other income grew by 14.3% YoY.
• Net profit for the year grew by 144.3% YoY.
• Net profit margins during the year grew from 13.4% in FY21 to 21.5% in FY22.

AARTI INDUSTRIES Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	39,889	60,806	52.4%
Other income	Rs m	7	8	14.3%
Total Revenues	Rs m	39,896	60,814	52.4%
Gross profit	Rs m	9,815	19,288	96.5%
Depreciation	Rs m	2,313	2,885	24.7%
Interest	Rs m	864	1,143	32.3%
Profit before tax	Rs m	6,646	15,268	129.7%
Tax	Rs m	1,293	2,194	69.6%
Profit after tax	Rs m	5,352	13,074	144.3%
Gross profit margin	%	24.6	31.7
Effective tax rate	%	19.5	14.4
Net profit margin	%	13.4	21.5

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AARTI INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during FY22 down at Rs 23 billion as compared to Rs 24 billion in FY21, thereby witnessing an decrease of -2.6%.
• Long-term debt down at Rs 9 billion as compared to Rs 13 billion during FY21, a fall of 26.6%.
• Current assets rose 38% and stood at Rs 33 billion, while fixed assets rose 21% and stood at Rs 64 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 97 billion as against Rs 76 billion during FY21, thereby witnessing a growth of 27%.

AARTI INDUSTRIES Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	35,029	59,145	68.8
Current Liabilities	Rs m	24,001	23,370	-2.6
Long-term Debt	Rs m	12,681	9,304	-26.6
Total Liabilities	Rs m	76,417	96,728	26.6
Current assets	Rs m	23,676	32,737	38.3
Fixed Assets	Rs m	52,741	63,991	21.3
Total Assets	Rs m	76,417	96,728	26.6

AARTI INDUSTRIES Cash Flow Statement Analysis

• AARTI INDUSTRIES's cash flow from operating activities (CFO) during FY22 stood at Rs 5 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -13 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs 7 billion, an improvement of 11% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -2 billion from the Rs 2 billion net cash flows seen during FY21.

AARTI INDUSTRIES 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	8,727	4,708	-46.1%
Cash Flow from Investing Activities	Rs m	-13,221	-13,055	-
Cash Flow from Financing Activities	Rs m	6,145	6,792	10.5%
Net Cash Flow	Rs m	1,650	-1,555	-

Current Valuations for AARTI INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 36.1, an improvement from the EPS of Rs 30.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 891.5, stands at 24.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.5 times, while the price to sales ratio stands at 5.3 times.
• The company's price to cash flow (P/CF) ratio stood at 20.7 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	228.9	167.7
TTM Earnings per share	Rs	30.7	36.1
Diluted earnings per share	Rs	14.8	36.1
Price to Cash Flow	x	31.1	20.7
TTM P/E ratio	x	44.6	24.3
Price / Book Value ratio	x	5.4	5.6
Market Cap	Rs m	188,896	331,052
Dividends per share (Unadj.)	Rs	3.0	3.5

Ratio Analysis for AARTI INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x during FY22, from 1.0x 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 improved and stood at 14.4x during FY22, from 8.7x 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 22.1% during FY22, from 15.3% 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 24.0% during FY22, from 15.7% 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 14.7% during FY22, from 8.1% 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	1.0	1.4
Debtors’ Days	Days	7	8
Interest coverage	x	8.7	14.4
Debt to equity ratio	x	0.4	0.2
Return on assets	%	8.1	14.7
Return on equity	%	15.3	22.1
Return on capital employed	%	15.7	24.0

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

AARTI INDUSTRIES Share Price Performance

Over the last one year, AARTI INDUSTRIES share price has moved down from Rs 909.1 to Rs 891.5, registering a loss of Rs 17.6 or around 1.9%.

Overall, the S&P BSE SENSEX is up 3.4% over the year.

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

Read: Latest Annual Report Analysis of AARTI INDUSTRIES