ASIAN PAINTS 2022-23 Annual Report Analysis

Mon, 5 Jun

ASIAN PAINTS has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

ASIAN PAINTS Income Statement Analysis

• Operating income during the year rose 18.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 33.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 18.3% in FY23 as against 16.2% in FY22.
• Depreciation charges increased by 5.1% and finance costs increased by 51.4% YoY, respectively.
• Other income grew by 1.7% YoY.
• Net profit for the year grew by 36.0% YoY.
• Net profit margins during the year grew from 10.6% in FY22 to 12.2% in FY23.

ASIAN PAINTS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	291,013	344,886	18.5%
Other income	Rs m	3,800	3,865	1.7%
Total Revenues	Rs m	294,813	348,751	18.3%
Gross profit	Rs m	47,195	63,048	33.6%
Depreciation	Rs m	8,164	8,580	5.1%
Interest	Rs m	954	1,445	51.4%
Profit before tax	Rs m	41,877	56,888	35.8%
Tax	Rs m	11,029	14,935	35.4%
Profit after tax	Rs m	30,848	41,953	36.0%
Gross profit margin	%	16.2	18.3
Effective tax rate	%	26.3	26.3
Net profit margin	%	10.6	12.2

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ASIAN PAINTS Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 79 billion as compared to Rs 76 billion in FY22, thereby witnessing an increase of 4.3%.
• Long-term debt stood at Rs 762 million as compared to Rs 445 million during FY22, a growth of 71.0%.
• Current assets rose 9% and stood at Rs 165 billion, while fixed assets rose 18% and stood at Rs 92 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 258 billion as against Rs 230 billion during FY22, thereby witnessing a growth of 12%.

ASIAN PAINTS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	137,982	159,655	15.7
Current Liabilities	Rs m	75,710	78,959	4.3
Long-term Debt	Rs m	445	762	71.0
Total Liabilities	Rs m	229,584	257,793	12.3
Current assets	Rs m	151,442	165,352	9.2
Fixed Assets	Rs m	78,061	92,442	18.4
Total Assets	Rs m	229,584	257,793	12.3

ASIAN PAINTS Cash Flow Statement Analysis

• ASIAN PAINTS's cash flow from operating activities (CFO) during FY23 stood at Rs 42 billion, an improvement of 325.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -13 billion, an improvement of 296.2% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -21 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 8 billion from the Rs -11 billion net cash flows seen during FY22.

ASIAN PAINTS Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	9,865	41,934	325.1%
Cash Flow from Investing Activities	Rs m	-3,217	-12,746	-
Cash Flow from Financing Activities	Rs m	-18,076	-21,401	-
Net Cash Flow	Rs m	-11,379	7,710	-

Current Valuations for ASIAN PAINTS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 43.7, an improvement from the EPS of Rs 32.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 3,215.0, stands at 75.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 19.3 times, while the price to sales ratio stands at 8.9 times.
• The company's price to cash flow (P/CF) ratio stood at 58.4 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	303.4	359.6
TTM Earnings per share	Rs	32.2	43.7
Diluted earnings per share	Rs	32.2	43.7
Price to Cash Flow	x	75.8	58.4
TTM P/E ratio	x	96.8	75.2
Price / Book Value ratio	x	21.1	18.5
Market Cap	Rs m	2,912,172	2,949,653
Dividends per share (Unadj.)	Rs	19.2	25.7

Ratio Analysis for ASIAN PAINTS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.1x during FY23, from 2.0x during FY22. 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 40.4x during FY23, from 44.9x during FY22. 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 26.3% during FY23, from 22.4% during FY23. 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 36.4% during FY23, from 30.9% during FY22. 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 16.8% during FY23, from 13.9% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	2.0	2.1
Debtors’ Days	Days	5	5
Interest coverage	x	44.9	40.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	13.9	16.8
Return on equity	%	22.4	26.3
Return on capital employed	%	30.9	36.4

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 2,887.0 to Rs 3,215.0, registering a gain of Rs 328.0 or around 11.4%.

Overall, the S&P BSE SENSEX is up 13.5% over the year.

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