ORIENTAL AROMATICS 2020-21 Annual Report Analysis

Wed, 31 Mar

ORIENTAL AROMATICS 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.

ORIENTAL AROMATICS Income Statement Analysis

• Operating income during the year fell 6.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 22.1% YoY during the fiscal. Operating profit margins witnessed a fall and down at 21.9% in FY21 as against 16.7% in FY20.
• Depreciation charges decreased by 8.2% and finance costs decreased by 80.6% YoY, respectively.
• Other income declined by 75.9% YoY.
• Net profit for the year grew by 18.3% YoY.
• Net profit margins during the year grew from 11.3% in FY20 to 14.4% in FY21.

ORIENTAL AROMATICS Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	7,599	7,088	-6.7%
Other income	Rs m	69	17	-75.9%
Total Revenues	Rs m	7,668	7,105	-7.3%
Gross profit	Rs m	1,270	1,551	22.1%
Depreciation	Rs m	190	175	-8.2%
Interest	Rs m	119	23	-80.6%
Profit before tax	Rs m	1,029	1,370	33.1%
Tax	Rs m	167	350	109.6%
Profit after tax	Rs m	862	1,019	18.3%
Gross profit margin	%	16.7	21.9
Effective tax rate	%	16.2	25.6
Net profit margin	%	11.3	14.4

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ORIENTAL AROMATICS Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 2 billion as compared to Rs 1 billion in FY20, thereby witnessing an increase of 38.9%.
• Current assets rose 32% and stood at Rs 5 billion, while fixed assets rose 9% and stood at Rs 3 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 7 billion as against Rs 6 billion during FY20, thereby witnessing a growth of 22%.

ORIENTAL AROMATICS Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	4,641	5,573	20.1
Current Liabilities	Rs m	1,140	1,584	38.9
Long-term Debt	Rs m	15	0	-100.0
Total Liabilities	Rs m	6,083	7,450	22.5
Current assets	Rs m	3,628	4,776	31.6
Fixed Assets	Rs m	2,455	2,674	8.9
Total Assets	Rs m	6,083	7,450	22.5

ORIENTAL AROMATICS Cash Flow Statement Analysis

• ORIENTAL AROMATICS's cash flow from operating activities (CFO) during FY21 stood at Rs 173 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -349 million, an improvement of 262.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs 157 million, an improvement of 110% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -19 million from the Rs 123 million net cash flows seen during FY20.

ORIENTAL AROMATICS 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	1,809	173	-90.4%
Cash Flow from Investing Activities	Rs m	-96	-349	-
Cash Flow from Financing Activities	Rs m	-1,591	157	-
Net Cash Flow	Rs m	123	-19	-

Current Valuations for ORIENTAL AROMATICS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 30.3, an improvement from the EPS of Rs 25.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 586.8, stands at 19.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.5 times, while the price to sales ratio stands at 2.8 times.
• The company's price to cash flow (P/CF) ratio stood at 11.5 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	225.8	210.6
TTM Earnings per share	Rs	25.6	30.3
Diluted earnings per share	Rs	25.6	30.3
Price to Cash Flow	x	4.3	11.5
TTM P/E ratio	x	5.2	19.4
Price / Book Value ratio	x	1.3	2.5
Market Cap	Rs m	6,058	13,766
Dividends per share (Unadj.)	Rs	2.5	2.5

Ratio Analysis for ORIENTAL AROMATICS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 3.0x during FY21, from 3.2x 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 60.3x during FY21, from 9.6x 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 18.3% during FY21, from 18.6% 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 improved and stood at 25.0% during FY21, from 24.7% 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 14.0% during FY21, from 16.1% 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	3.2	3.0
Debtors’ Days	Days	727	971
Interest coverage	x	9.6	60.3
Debt to equity ratio	x	0.0	0.0
Return on assets	%	16.1	14.0
Return on equity	%	18.6	18.3
Return on capital employed	%	24.7	25.0

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

ORIENTAL AROMATICS Share Price Performance

Over the last one year, ORIENTAL AROMATICS share price has moved up from Rs 134.1 to Rs 586.8, registering a gain of Rs 452.8 or around 337.7%.

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

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

Read: Latest Annual Report Analysis of ORIENTAL AROMATICS