BERGER PAINTS 2019-20 Annual Report Analysis

Tue, 31 Mar

BERGER PAINTS has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

BERGER PAINTS Income Statement Analysis

• Operating income during the year rose 5.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 13.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 16.7% in FY20 as against 15.4% in FY19.
• Depreciation charges increased by 6.0% and finance costs decreased by 0.4% YoY, respectively.
• Other income grew by 14.1% YoY.
• Net profit for the year grew by 34.3% YoY.
• Net profit margins during the year grew from 8.2% in FY19 to 10.4% in FY20.

BERGER PAINTS Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	60,619	63,658	5.0%
Other income	Rs m	600	685	14.1%
Total Revenues	Rs m	61,219	64,343	5.1%
Gross profit	Rs m	9,335	10,610	13.7%
Depreciation	Rs m	1,802	1,910	6.0%
Interest	Rs m	472	470	-0.4%
Profit before tax	Rs m	7,661	8,915	16.4%
Tax	Rs m	2,713	2,271	-16.3%
Profit after tax	Rs m	4,948	6,644	34.3%
Gross profit margin	%	15.4	16.7
Effective tax rate	%	35.4	25.5
Net profit margin	%	8.2	10.4

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BERGER PAINTS Balance Sheet Analysis

• The company's current liabilities during FY20 stood at Rs 18 billion as compared to Rs 17 billion in FY19, thereby witnessing an increase of 7.9%.
• Long-term debt stood at Rs 2 billion as compared to Rs 2 billion during FY19, a growth of 1.9%.
• Current assets rose 0% and stood at Rs 27 billion, while fixed assets rose 18% and stood at Rs 36 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 63 billion as against Rs 58 billion during FY19, thereby witnessing a growth of 10%.

BERGER PAINTS Balance Sheet as on March 2020

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Networth	Rs m	24,414	26,579	8.9
Current Liabilities	Rs m	16,908	18,240	7.9
Long-term Debt	Rs m	2,389	2,434	1.9
Total Liabilities	Rs m	57,608	63,301	9.9
Current assets	Rs m	27,000	27,039	0.1
Fixed Assets	Rs m	30,608	36,263	18.5
Total Assets	Rs m	57,608	63,301	9.9

BERGER PAINTS Cash Flow Statement Analysis

• BERGER PAINTS's cash flow from operating activities (CFO) during FY20 stood at Rs 7 billion, an improvement of 18.6% on a YoY basis.
• Cash flow from investing activities (CFI) during FY20 stood at Rs -2 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY20 stood at Rs -5 billion on a YoY basis.
• Overall, net cash flows for the company during FY20 stood at Rs 219 million from the Rs -265 million net cash flows seen during FY19.

BERGER PAINTS Cash Flow Statement 2019-20

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-19	Mar-20
Cash Flow from Operating Activities	Rs m	6,108	7,246	18.6%
Cash Flow from Investing Activities	Rs m	-3,786	-2,234	-
Cash Flow from Financing Activities	Rs m	-2,588	-4,794	-
Net Cash Flow	Rs m	-265	219	-

Current Valuations for BERGER PAINTS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 6.8, an improvement from the EPS of Rs 5.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 497.4, stands at 72.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 18.2 times, while the price to sales ratio stands at 7.6 times.
• The company's price to cash flow (P/CF) ratio stood at 50.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Sales per share (Unadj.)	Rs	62.4	65.5
TTM Earnings per share	Rs	5.1	6.8
Diluted earnings per share	Rs	5.1	6.8
Price to Cash Flow	x	46.6	50.5
TTM P/E ratio	x	63.1	72.7
Price / Book Value ratio	x	12.0	16.3
Market Cap	Rs m	292,116	432,047
Dividends per share (Unadj.)	Rs	1.9	2.2

Ratio Analysis for BERGER PAINTS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.5x during FY20, from 1.6x during FY19. 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 20.0x during FY20, from 17.2x during FY19. 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 25.0% during FY20, from 20.3% during FY20. 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 32.3% during FY20, from 30.3% during FY19. 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 11.2% during FY20, from 9.4% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Current ratio	x	1.6	1.5
Debtors’ Days	Days	4	4
Interest coverage	x	17.2	20.0
Debt to equity ratio	x	0.1	0.1
Return on assets	%	9.4	11.2
Return on equity	%	20.3	25.0
Return on capital employed	%	30.3	32.3

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

BERGER PAINTS Share Price Performance

Over the last one year, BERGER PAINTS share price has moved up from Rs 323.7 to Rs 497.4, registering a gain of Rs 173.8 or around 53.7%.

Overall, the S&P BSE SENSEX is down 24.2% over the year.

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

Read: Latest Annual Report Analysis of BERGER PAINTS