ASIAN PAINTS 2018-19 Annual Report Analysis

Sun, 31 Mar

ASIAN PAINTS has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

ASIAN PAINTS Income Statement Analysis

• Operating income during the year rose 17.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 17.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 19.4% in FY19 as against 19.5% in FY18.
• Depreciation charges increased by 72.6% and finance costs increased by 166.4% YoY, respectively.
• Other income declined by 19.1% YoY.
• Net profit for the year grew by 5.6% YoY.
• Net profit margins during the year declined from 12.5% in FY18 to 11.2% in FY19.

ASIAN PAINTS Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	164,687	193,498	17.5%
Other income	Rs m	2,881	2,330	-19.1%
Total Revenues	Rs m	167,568	195,829	16.9%
Gross profit	Rs m	32,071	37,635	17.3%
Depreciation	Rs m	3,605	6,221	72.6%
Interest	Rs m	415	1,105	166.4%
Profit before tax	Rs m	30,933	32,639	5.5%
Tax	Rs m	10,416	10,966	5.3%
Profit after tax	Rs m	20,517	21,673	5.6%
Gross profit margin	%	19.5	19.4
Effective tax rate	%	33.7	33.6
Net profit margin	%	12.5	11.2

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ASIAN PAINTS Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 52 billion as compared to Rs 45 billion in FY18, thereby witnessing an increase of 16.4%.
• Long-term debt down at Rs 191 million as compared to Rs 283 million during FY18, a fall of 32.7%.
• Current assets rose 10% and stood at Rs 76 billion, while fixed assets rose 26% and stood at Rs 86 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 162 billion as against Rs 138 billion during FY18, thereby witnessing a growth of 18%.

ASIAN PAINTS Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	84,102	94,706	12.6
Current Liabilities	Rs m	44,511	51,801	16.4
Long-term Debt	Rs m	283	191	-32.7
Total Liabilities	Rs m	137,635	162,488	18.1
Current assets	Rs m	69,141	76,270	10.3
Fixed Assets	Rs m	68,494	86,219	25.9
Total Assets	Rs m	137,635	162,488	18.1

ASIAN PAINTS Cash Flow Statement Analysis

• ASIAN PAINTS's cash flow from operating activities (CFO) during FY19 stood at Rs 25 billion, an improvement of 16.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -9 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -11 billion, an improvement of 19% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 4 billion from the Rs -8 billion net cash flows seen during FY18.

ASIAN PAINTS Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	21,134	24,695	16.8%
Cash Flow from Investing Activities	Rs m	-15,993	-9,445	-
Cash Flow from Financing Activities	Rs m	-13,791	-11,175	-
Net Cash Flow	Rs m	-8,218	4,343	-

Current Valuations for ASIAN PAINTS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 22.6, an improvement from the EPS of Rs 21.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,491.9, stands at 72.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 15.1 times, while the price to sales ratio stands at 7.4 times.
• The company's price to cash flow (P/CF) ratio stood at 45.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	171.7	201.7
TTM Earnings per share	Rs	21.4	22.6
Diluted earnings per share	Rs	21.4	22.6
Price to Cash Flow	x	44.6	45.1
TTM P/E ratio	x	55.1	72.2
Price / Book Value ratio	x	13.1	13.3
Market Cap	Rs m	1,100,775	1,256,837
Dividends per share (Unadj.)	Rs	8.7	10.5

Ratio Analysis for ASIAN PAINTS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.5x during FY19, from 1.6x during FY18. 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 30.5x during FY19, from 75.6x during FY18. 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 22.9% during FY19, from 24.4% during FY19. 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 35.6% during FY19, from 37.1% during FY18. 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 14.0% during FY19, from 15.2% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	1.6	1.5
Debtors’ Days	Days	4	4
Interest coverage	x	75.6	30.5
Debt to equity ratio	x	0.0	0.0
Return on assets	%	15.2	14.0
Return on equity	%	24.4	22.9
Return on capital employed	%	37.1	35.6

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 1,120.7 to Rs 1,491.9, registering a gain of Rs 371.2 or around 33.1%.

Overall, the S&P BSE SENSEX is up 16.3% 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