ASIAN PAINTS 2017-18 Annual Report Analysis

Sat, 31 Mar

ASIAN PAINTS has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

ASIAN PAINTS Income Statement Analysis

• Operating income during the year rose 20.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 6.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 19.5% in FY18 as against 22.1% in FY17.
• Depreciation charges increased by 7.7% and finance costs increased by 11.1% YoY, respectively.
• Other income grew by 9.8% YoY.
• Net profit for the year grew by 4.3% YoY.
• Net profit margins during the year declined from 14.3% in FY17 to 12.5% in FY18.

ASIAN PAINTS Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	137,082	164,687	20.1%
Other income	Rs m	2,624	2,881	9.8%
Total Revenues	Rs m	139,706	167,568	19.9%
Gross profit	Rs m	30,243	32,071	6.0%
Depreciation	Rs m	3,348	3,605	7.7%
Interest	Rs m	373	415	11.1%
Profit before tax	Rs m	29,146	30,933	6.1%
Tax	Rs m	9,480	10,416	9.9%
Profit after tax	Rs m	19,666	20,517	4.3%
Gross profit margin	%	22.1	19.5
Effective tax rate	%	32.5	33.7
Net profit margin	%	14.3	12.5

Don't Miss: Best Chance to Access Midcap Stocks Research at 80% OFF

ASIAN PAINTS Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 45 billion as compared to Rs 39 billion in FY17, thereby witnessing an increase of 14.6%.
• Long-term debt down at Rs 283 million as compared to Rs 411 million during FY17, a fall of 31.0%.
• Current assets fell 1% and stood at Rs 69 billion, while fixed assets rose 26% and stood at Rs 68 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 138 billion as against Rs 124 billion during FY17, thereby witnessing a growth of 11%.

ASIAN PAINTS Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	76,039	84,102	10.6
Current Liabilities	Rs m	38,849	44,511	14.6
Long-term Debt	Rs m	411	283	-31.0
Total Liabilities	Rs m	124,052	137,635	10.9
Current assets	Rs m	69,657	69,141	-0.7
Fixed Assets	Rs m	54,395	68,494	25.9
Total Assets	Rs m	124,052	137,635	10.9

ASIAN PAINTS Cash Flow Statement Analysis

• ASIAN PAINTS's cash flow from operating activities (CFO) during FY18 stood at Rs 21 billion, an improvement of 38.4% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -16 billion, an improvement of 143.8% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -14 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -8 billion from the Rs 898 million net cash flows seen during FY17.

ASIAN PAINTS Cash Flow Statement 2017-18

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-17	Mar-18
Cash Flow from Operating Activities	Rs m	15,273	21,134	38.4%
Cash Flow from Investing Activities	Rs m	-6,561	-15,993	-
Cash Flow from Financing Activities	Rs m	-7,564	-13,791	-
Net Cash Flow	Rs m	898	-8,218	-

Current Valuations for ASIAN PAINTS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 21.4, an improvement from the EPS of Rs 20.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,120.7, stands at 54.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 13.1 times, while the price to sales ratio stands at 6.7 times.
• The company's price to cash flow (P/CF) ratio stood at 45.6 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Sales per share (Unadj.)	Rs	142.9	171.7
TTM Earnings per share	Rs	20.5	21.4
Diluted earnings per share	Rs	20.5	21.4
Price to Cash Flow	x	44.6	45.6
TTM P/E ratio	x	51.2	54.0
Price / Book Value ratio	x	13.1	13.1
Market Cap	Rs m	994,256	1,100,775
Dividends per share (Unadj.)	Rs	10.3	8.7

Ratio Analysis for ASIAN PAINTS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.6x during FY18, from 1.8x during FY17. 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 75.6x during FY18, from 79.1x during FY17. 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 declined and down at 24.4% during FY18, from 25.9% during FY18. 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 declined and down at 37.1% during FY18, from 38.6% during FY17. 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 declined and down at 15.2% during FY18, from 16.2% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Current ratio	x	1.8	1.6
Debtors’ Days	Days	4	4
Interest coverage	x	79.1	75.6
Debt to equity ratio	x	0.0	0.0
Return on assets	%	16.2	15.2
Return on equity	%	25.9	24.4
Return on capital employed	%	38.6	37.1

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

ASIAN PAINTS Share Price Performance

Over the last one year, ASIAN PAINTS share price has moved up from Rs 1,071.2 to Rs 1,120.7, registering a gain of Rs 49.5 or around 4.6%.

Overall, the S&P BSE SENSEX is up 12.1% over the year.

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

Read: Latest Annual Report Analysis of ASIAN PAINTS