AKSHARCHEM 2021-22 Annual Report Analysis

Tue, 8 Nov

AKSHARCHEM 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.

AKSHARCHEM Income Statement Analysis

• Operating income during the year rose 54.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 32.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 8.3% in FY22 as against 9.7% in FY21.
• Depreciation charges increased by 73.3% and finance costs increased by 222.0% YoY, respectively.
• Other income declined by 42.1% YoY.
• Net profit for the year grew by 27.3% YoY.
• Net profit margins during the year declined from 5.1% in FY21 to 4.2% in FY22.

AKSHARCHEM Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	2,465	3,803	54.3%
Other income	Rs m	11	7	-42.1%
Total Revenues	Rs m	2,476	3,810	53.9%
Gross profit	Rs m	239	317	32.7%
Depreciation	Rs m	71	122	73.3%
Interest	Rs m	7	22	222.0%
Profit before tax	Rs m	173	179	3.7%
Tax	Rs m	48	20	-57.7%
Profit after tax	Rs m	125	159	27.3%
Gross profit margin	%	9.7	8.3
Effective tax rate	%	27.7	11.3
Net profit margin	%	5.1	4.2

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AKSHARCHEM Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 857 million as compared to Rs 602 million in FY21, thereby witnessing an increase of 42.3%.
• Long-term debt stood at Rs 225 million as compared to Rs 0 million during FY21, a fall of 0.0%.
• Current assets rose 34% and stood at Rs 2 billion, while fixed assets rose 5% and stood at Rs 3 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 4 billion as against Rs 4 billion during FY21, thereby witnessing a growth of 14%.

AKSHARCHEM Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	2,787	2,797	0.4
Current Liabilities	Rs m	602	857	42.3
Long-term Debt	Rs m	0	225	0.0
Total Liabilities	Rs m	3,555	4,060	14.2
Current assets	Rs m	1,142	1,526	33.6
Fixed Assets	Rs m	2,413	2,534	5.0
Total Assets	Rs m	3,555	4,060	14.2

AKSHARCHEM Cash Flow Statement Analysis

• AKSHARCHEM's cash flow from operating activities (CFO) during FY22 stood at Rs 43 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -238 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs 182 million, an improvement of 1,292% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -13 million from the Rs 12 million net cash flows seen during FY21.

AKSHARCHEM 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	493	43	-91.3%
Cash Flow from Investing Activities	Rs m	-494	-238	-
Cash Flow from Financing Activities	Rs m	13	182	1,291.9%
Net Cash Flow	Rs m	12	-13	-

Current Valuations for AKSHARCHEM

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 19.8, an improvement from the EPS of Rs 15.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 326.6, stands at 20.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.9 times, while the price to sales ratio stands at 0.7 times.
• The company's price to cash flow (P/CF) ratio stood at 11.9 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	300.6	473.7
TTM Earnings per share	Rs	15.2	19.8
Diluted earnings per share	Rs	15.6	19.8
Price to Cash Flow	x	9.6	11.9
TTM P/E ratio	x	15.0	20.9
Price / Book Value ratio	x	0.7	1.2
Market Cap	Rs m	1,827	3,360
Dividends per share (Unadj.)	Rs	3.5	0.5

Ratio Analysis for AKSHARCHEM

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.8x during FY22, from 1.9x 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 9.1x during FY22, from 26.3x 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 improved and stood at 5.7% during FY22, from 4.5% 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 improved and stood at 6.7% during FY22, from 6.5% 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 improved and stood at 4.5% during FY22, from 3.7% 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	1.9	1.8
Debtors’ Days	Days	418	508
Interest coverage	x	26.3	9.1
Debt to equity ratio	x	0.0	0.1
Return on assets	%	3.7	4.5
Return on equity	%	4.5	5.7
Return on capital employed	%	6.5	6.7

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

AKSHARCHEM Share Price Performance

Over the last one year, AKSHARCHEM share price has moved down from Rs 451.9 to Rs 326.6, registering a loss of Rs 125.3 or around 27.7%.

Overall, the S&P BSE SENSEX is up 1.9% over the year.

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