ASIAN PAINTS 2020-21 Annual Report Analysis

Wed, 31 Mar

ASIAN PAINTS has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

ASIAN PAINTS Income Statement Analysis

• Operating income during the year rose 7.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 16.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 22.4% in FY21 as against 20.5% in FY20.
• Depreciation charges increased by 1.4% and finance costs decreased by 10.5% YoY, respectively.
• Other income declined by 0.4% YoY.
• Net profit for the year grew by 16.7% YoY.
• Net profit margins during the year grew from 13.4% in FY20 to 14.6% in FY21.

ASIAN PAINTS Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	202,635	217,128	7.2%
Other income	Rs m	3,043	3,031	-0.4%
Total Revenues	Rs m	205,678	220,158	7.0%
Gross profit	Rs m	41,583	48,556	16.8%
Depreciation	Rs m	7,805	7,913	1.4%
Interest	Rs m	1,023	916	-10.5%
Profit before tax	Rs m	35,798	42,758	19.4%
Tax	Rs m	8,563	10,976	28.2%
Profit after tax	Rs m	27,235	31,782	16.7%
Gross profit margin	%	20.5	22.4
Effective tax rate	%	23.9	25.7
Net profit margin	%	13.4	14.6

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ASIAN PAINTS Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 59 billion as compared to Rs 44 billion in FY20, thereby witnessing an increase of 35.3%.
• Long-term debt down at Rs 145 million as compared to Rs 186 million during FY20, a fall of 22.0%.
• Current assets rose 59% and stood at Rs 120 billion, while fixed assets fell 3% and stood at Rs 83 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 204 billion as against Rs 161 billion during FY20, thereby witnessing a growth of 26%.

ASIAN PAINTS Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	101,302	128,063	26.4
Current Liabilities	Rs m	43,804	59,259	35.3
Long-term Debt	Rs m	186	145	-22.0
Total Liabilities	Rs m	161,380	203,553	26.1
Current assets	Rs m	75,801	120,266	58.7
Fixed Assets	Rs m	85,579	83,287	-2.7
Total Assets	Rs m	161,380	203,553	26.1

ASIAN PAINTS Cash Flow Statement Analysis

• ASIAN PAINTS's cash flow from operating activities (CFO) during FY21 stood at Rs 37 billion, an improvement of 21.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -5 billion, an improvement of 5.1% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -7 billion, an improvement of 77% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 25 billion from the Rs -4 billion net cash flows seen during FY20.

ASIAN PAINTS Cash Flow Statement 2020-21

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-20	Mar-21
Cash Flow from Operating Activities	Rs m	30,382	36,834	21.2%
Cash Flow from Investing Activities	Rs m	-5,214	-5,478	-
Cash Flow from Financing Activities	Rs m	-28,715	-6,504	-
Net Cash Flow	Rs m	-3,512	24,924	-

Current Valuations for ASIAN PAINTS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 33.1, an improvement from the EPS of Rs 28.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,536.8, stands at 76.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 19.0 times, while the price to sales ratio stands at 11.2 times.
• The company's price to cash flow (P/CF) ratio stood at 52.6 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Sales per share (Unadj.)	Rs	211.3	226.4
TTM Earnings per share	Rs	28.4	33.1
Diluted earnings per share	Rs	28.4	33.1
Price to Cash Flow	x	45.6	52.6
TTM P/E ratio	x	58.6	76.6
Price / Book Value ratio	x	15.2	16.3
Market Cap	Rs m	1,538,266	2,088,294
Dividends per share (Unadj.)	Rs	12.0	17.9

Ratio Analysis for ASIAN PAINTS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.0x during FY21, from 1.7x during FY20. 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 47.7x during FY21, from 36.0x during FY20. 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 24.8% during FY21, from 26.9% during FY21. 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 34.1% during FY21, from 36.3% during FY20. 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 16.1% during FY21, from 17.5% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Current ratio	x	1.7	2.0
Debtors’ Days	Days	3	4
Interest coverage	x	36.0	47.7
Debt to equity ratio	x	0.0	0.0
Return on assets	%	17.5	16.1
Return on equity	%	26.9	24.8
Return on capital employed	%	36.3	34.1

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 1,666.7 to Rs 2,536.8, registering a gain of Rs 870.1 or around 52.2%.

Overall, the S&P BSE SENSEX is up 74.1% 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