ASIAN PAINTS 2021-22 Annual Report Analysis

Wed, 8 Jun

ASIAN PAINTS 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.

ASIAN PAINTS Income Statement Analysis

• Operating income during the year rose 34.0% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 3.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 16.1% in FY22 as against 22.4% in FY21.
• Depreciation charges increased by 3.2% and finance costs increased by 4.1% YoY, respectively.
• Other income grew by 25.4% YoY.
• Net profit for the year declined by 3.9% YoY.
• Net profit margins during the year declined from 14.6% in FY21 to 10.5% in FY22.

ASIAN PAINTS Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	217,128	291,013	34.0%
Other income	Rs m	3,031	3,800	25.4%
Total Revenues	Rs m	220,158	294,813	33.9%
Gross profit	Rs m	48,556	46,879	-3.5%
Depreciation	Rs m	7,913	8,164	3.2%
Interest	Rs m	916	954	4.1%
Profit before tax	Rs m	42,758	41,562	-2.8%
Tax	Rs m	10,976	11,029	0.5%
Profit after tax	Rs m	31,782	30,532	-3.9%
Gross profit margin	%	22.4	16.1
Effective tax rate	%	25.7	26.5
Net profit margin	%	14.6	10.5

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ASIAN PAINTS Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 76 billion as compared to Rs 59 billion in FY21, thereby witnessing an increase of 27.8%.
• Long-term debt stood at Rs 445 million as compared to Rs 145 million during FY21, a growth of 206.5%.
• Current assets rose 26% and stood at Rs 152 billion, while fixed assets fell 6% and stood at Rs 78 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 230 billion as against Rs 204 billion during FY21, thereby witnessing a growth of 13%.

ASIAN PAINTS Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	128,063	137,982	7.7
Current Liabilities	Rs m	59,259	75,710	27.8
Long-term Debt	Rs m	145	445	206.5
Total Liabilities	Rs m	203,553	229,584	12.8
Current assets	Rs m	120,266	151,523	26.0
Fixed Assets	Rs m	83,287	78,061	-6.3
Total Assets	Rs m	203,553	229,584	12.8

ASIAN PAINTS Cash Flow Statement Analysis

• ASIAN PAINTS's cash flow from operating activities (CFO) during FY22 stood at Rs 10 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -3 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -18 billion on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -11 billion from the Rs 25 billion net cash flows seen during FY21.

ASIAN PAINTS 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	36,834	9,865	-73.2%
Cash Flow from Investing Activities	Rs m	-5,478	-3,217	-
Cash Flow from Financing Activities	Rs m	-6,504	-18,076	-
Net Cash Flow	Rs m	24,924	-11,379	-

Current Valuations for ASIAN PAINTS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 31.8, an decline from the EPS of Rs 33.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,738.0, stands at 86.0 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 9.0 times.
• The company's price to cash flow (P/CF) ratio stood at 75.3 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	226.4	303.4
TTM Earnings per share	Rs	33.1	31.8
Diluted earnings per share	Rs	33.1	31.8
Price to Cash Flow	x	61.3	75.3
TTM P/E ratio	x	76.6	86.0
Price / Book Value ratio	x	16.3	21.1
Market Cap	Rs m	2,088,294	2,912,172
Dividends per share (Unadj.)	Rs	17.9	19.2

Ratio Analysis for ASIAN PAINTS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.0x during FY22, from 2.0x 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 deteriorated and stood at 44.6x during FY22, from 47.7x 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 declined and down at 22.1% during FY22, from 24.8% 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 declined and down at 30.7% during FY22, from 34.1% 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 declined and down at 13.7% during FY22, from 16.1% 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	2.0	2.0
Debtors’ Days	Days	4	5
Interest coverage	x	47.7	44.6
Debt to equity ratio	x	0.0	0.0
Return on assets	%	16.1	13.7
Return on equity	%	24.8	22.1
Return on capital employed	%	34.1	30.7

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 down from Rs 2,928.1 to Rs 2,738.0, registering a loss of Rs 190.1 or around 6.5%.

Overall, the S&P BSE SENSEX is up 5.6% 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