CHEMBOND CHEMICALS 2021-22 Annual Report Analysis

Wed, 20 Jul

CHEMBOND CHEMICALS 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.

CHEMBOND CHEMICALS Income Statement Analysis

• Operating income during the year rose 27.3% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 3.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 5.0% in FY22 as against 6.6% in FY21.
• Depreciation charges decreased by 1.7% and finance costs increased by 63.3% YoY, respectively.
• Other income declined by 46.7% YoY.
• Net profit for the year declined by 31.5% YoY.
• Net profit margins during the year declined from 7.4% in FY21 to 4.0% in FY22.

CHEMBOND CHEMICALS Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	2,744	3,494	27.3%
Other income	Rs m	153	82	-46.7%
Total Revenues	Rs m	2,898	3,576	23.4%
Gross profit	Rs m	182	175	-3.5%
Depreciation	Rs m	46	45	-1.7%
Interest	Rs m	4	7	63.3%
Profit before tax	Rs m	285	205	-28.0%
Tax	Rs m	81	66	-19.3%
Profit after tax	Rs m	204	140	-31.5%
Gross profit margin	%	6.6	5.0
Effective tax rate	%	28.5	31.9
Net profit margin	%	7.4	4.0

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CHEMBOND CHEMICALS Balance Sheet Analysis

• The company's current liabilities during FY22 down at Rs 540 million as compared to Rs 578 million in FY21, thereby witnessing an decrease of -6.5%.
• Long-term debt stood at Rs 7 million as compared to Rs 6 million during FY21, a growth of 10.1%.
• Current assets rose 6% and stood at Rs 2 billion, while fixed assets fell 2% and stood at Rs 2 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 2%.

CHEMBOND CHEMICALS Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	2,932	3,040	3.7
Current Liabilities	Rs m	578	540	-6.5
Long-term Debt	Rs m	6	7	10.1
Total Liabilities	Rs m	3,520	3,588	1.9
Current assets	Rs m	1,830	1,936	5.8
Fixed Assets	Rs m	1,690	1,652	-2.2
Total Assets	Rs m	3,520	3,588	1.9

CHEMBOND CHEMICALS Cash Flow Statement Analysis

• CHEMBOND CHEMICALS's cash flow from operating activities (CFO) during FY22 stood at Rs 0 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -19 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -41 million on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -60 million from the Rs 119 million net cash flows seen during FY21.

CHEMBOND CHEMICALS 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	250	0	-
Cash Flow from Investing Activities	Rs m	-112	-19	-
Cash Flow from Financing Activities	Rs m	-19	-41	-
Net Cash Flow	Rs m	119	-60	-

Current Valuations for CHEMBOND CHEMICALS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 10.4, an decline from the EPS of Rs 15.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 169.9, stands at 16.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.8 times, while the price to sales ratio stands at 0.7 times.
• The company's price to cash flow (P/CF) ratio stood at 16.5 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	204.0	259.8
TTM Earnings per share	Rs	15.2	10.4
Diluted earnings per share	Rs	15.2	10.4
Price to Cash Flow	x	10.2	16.5
TTM P/E ratio	x	12.5	16.3
Price / Book Value ratio	x	0.8	1.0
Market Cap	Rs m	2,290	3,039
Dividends per share (Unadj.)	Rs	2.3	5.0

Ratio Analysis for CHEMBOND CHEMICALS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.6x during FY22, from 3.2x 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 30.8x during FY22, from 68.6x 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 4.6% during FY22, from 7.0% 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 7.0% during FY22, from 9.9% 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 4.1% during FY22, from 5.9% 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	3.2	3.6
Debtors’ Days	Days	1,111	936
Interest coverage	x	68.6	30.8
Debt to equity ratio	x	0.0	0.0
Return on assets	%	5.9	4.1
Return on equity	%	7.0	4.6
Return on capital employed	%	9.9	7.0

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

CHEMBOND CHEMICALS Share Price Performance

Over the last one year, CHEMBOND CHEMICALS share price has moved down from Rs 230.7 to Rs 169.9, registering a loss of Rs 60.8 or around 26.4%.

Overall, the S&P BSE SENSEX is up 5.7% over the year.

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

Read: Latest Annual Report Analysis of CHEMBOND CHEMICALS