CARE RATING 2021-22 Annual Report Analysis

Fri, 2 Sep

CARE RATING 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.

CARE RATING Income Statement Analysis

• Operating income during the year fell 11.7% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 10.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 39.2% in FY22 as against 38.5% in FY21.
• Depreciation charges decreased by 10.4% and finance costs decreased by 35.9% YoY, respectively.
• Other income declined by 9.4% YoY.
• Net profit for the year declined by 7.1% YoY.
• Net profit margins during the year grew from 36.6% in FY21 to 38.5% in FY22.

CARE RATING Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	2,484	2,193	-11.7%
Other income	Rs m	313	284	-9.4%
Total Revenues	Rs m	2,797	2,476	-11.5%
Gross profit	Rs m	958	860	-10.2%
Depreciation	Rs m	78	70	-10.4%
Interest	Rs m	6	4	-35.9%
Profit before tax	Rs m	1,186	1,070	-9.8%
Tax	Rs m	277	225	-18.7%
Profit after tax	Rs m	910	845	-7.1%
Gross profit margin	%	38.5	39.2
Effective tax rate	%	23.3	21.0
Net profit margin	%	36.6	38.5

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CARE RATING Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 6 billion as compared to Rs 6 billion in FY21, thereby witnessing an increase of 2.5%.
• Current assets rose 1% and stood at Rs 11 billion, while fixed assets rose 46% and stood at Rs 2 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 12 billion as against Rs 12 billion during FY21, thereby witnessing a growth of 6%.

CARE RATING Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	5,641	6,424	13.9
Current Liabilities	Rs m	5,574	5,714	2.5
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	11,751	12,403	5.5
Current assets	Rs m	10,512	10,592	0.8
Fixed Assets	Rs m	1,239	1,811	46.2
Total Assets	Rs m	11,751	12,403	5.5

CARE RATING Cash Flow Statement Analysis

• CARE RATING's cash flow from operating activities (CFO) during FY22 stood at Rs 631 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -225 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -346 million, an improvement of 20% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 61 million from the Rs 48 million net cash flows seen during FY21.

CARE RATING 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	862	631	-26.7%
Cash Flow from Investing Activities	Rs m	-380	-225	-
Cash Flow from Financing Activities	Rs m	-434	-346	-
Net Cash Flow	Rs m	48	61	27.0%

Current Valuations for CARE RATING

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 28.5, an decline from the EPS of Rs 30.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 515.3, stands at 19.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.4 times, while the price to sales ratio stands at 7.0 times.
• The company's price to cash flow (P/CF) ratio stood at 19.5 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	84.3	74.0
TTM Earnings per share	Rs	30.9	28.5
Diluted earnings per share	Rs	30.7	28.5
Price to Cash Flow	x	12.3	19.5
TTM P/E ratio	x	13.4	19.2
Price / Book Value ratio	x	2.3	2.8
Market Cap	Rs m	13,023	17,805
Dividends per share (Unadj.)	Rs	17.0	17.0

Ratio Analysis for CARE RATING

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.9x 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 improved and stood at 271.2x during FY22, from 193.0x 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 13.2% during FY22, from 16.1% 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 16.7% during FY22, from 21.1% 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 6.8% during FY22, from 7.8% 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	1.9
Debtors’ Days	Days	314	226
Interest coverage	x	193.0	271.2
Debt to equity ratio	x	0.0	0.0
Return on assets	%	7.8	6.8
Return on equity	%	16.1	13.2
Return on capital employed	%	21.1	16.7

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

CARE RATING Share Price Performance

Over the last one year, CARE RATING share price has moved down from Rs 680.6 to Rs 515.3, registering a loss of Rs 165.4 or around 24.3%.

Overall, the S&P BSE SENSEX is up 3.3% over the year.

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

Read: Latest Annual Report Analysis of CARE RATING