COLGATE 2020-21 Annual Report Analysis

Wed, 31 Mar

COLGATE 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.

COLGATE Income Statement Analysis

• Operating income during the year rose 7.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 25.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 31.2% in FY21 as against 26.6% in FY20.
• Depreciation charges decreased by 7.8% and finance costs decreased by 24.5% YoY, respectively.
• Other income declined by 38.4% YoY.
• Net profit for the year grew by 26.8% YoY.
• Net profit margins during the year grew from 18.0% in FY20 to 21.4% in FY21.

COLGATE Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	45,251	48,412	7.0%
Other income	Rs m	492	304	-38.4%
Total Revenues	Rs m	45,743	48,716	6.5%
Gross profit	Rs m	12,017	15,096	25.6%
Depreciation	Rs m	1,979	1,825	-7.8%
Interest	Rs m	96	73	-24.5%
Profit before tax	Rs m	10,434	13,502	29.4%
Tax	Rs m	2,269	3,148	38.8%
Profit after tax	Rs m	8,165	10,354	26.8%
Gross profit margin	%	26.6	31.2
Effective tax rate	%	21.7	23.3
Net profit margin	%	18.0	21.4

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COLGATE Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 24 billion as compared to Rs 17 billion in FY20, thereby witnessing an increase of 45.1%.
• Current assets rose 20% and stood at Rs 22 billion, while fixed assets rose 125% and stood at Rs 36 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 57 billion as against Rs 34 billion during FY20, thereby witnessing a growth of 69%.

COLGATE Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	15,948	11,662	-26.9
Current Liabilities	Rs m	16,578	24,055	45.1
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	33,915	57,357	69.1
Current assets	Rs m	17,995	21,601	20.0
Fixed Assets	Rs m	15,919	35,756	124.6
Total Assets	Rs m	33,915	57,357	69.1

COLGATE Cash Flow Statement Analysis

• COLGATE's cash flow from operating activities (CFO) during FY21 stood at Rs 8 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs 714 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -10 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -1 billion from the Rs 198 million net cash flows seen during FY20.

COLGATE 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	9,296	7,839	-15.7%
Cash Flow from Investing Activities	Rs m	-187	714	-
Cash Flow from Financing Activities	Rs m	-8,911	-9,565	-
Net Cash Flow	Rs m	198	-1,012	-

Current Valuations for COLGATE

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 38.1, an improvement from the EPS of Rs 30.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,559.6, stands at 41.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 36.4 times, while the price to sales ratio stands at 8.8 times.
• The company's price to cash flow (P/CF) ratio stood at 32.3 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	166.4	178.0
TTM Earnings per share	Rs	30.0	38.1
Diluted earnings per share	Rs	30.0	38.1
Price to Cash Flow	x	33.6	32.3
TTM P/E ratio	x	41.7	41.0
Price / Book Value ratio	x	23.1	33.7
Market Cap	Rs m	368,024	393,121
Dividends per share (Unadj.)	Rs	28.0	38.0

Ratio Analysis for COLGATE

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.9x during FY21, from 1.1x 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 187.0x during FY21, from 109.5x 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 improved and stood at 88.8% during FY21, from 51.2% 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 116.4% during FY21, from 66.0% 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 18.2% during FY21, from 24.4% 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	1.1	0.9
Debtors’ Days	Days	107	88
Interest coverage	x	109.5	187.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	24.4	18.2
Return on equity	%	51.2	88.8
Return on capital employed	%	66.0	116.4

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

COLGATE Share Price Performance

Over the last one year, COLGATE share price has moved up from Rs 1,253.0 to Rs 1,559.6, registering a gain of Rs 306.7 or around 24.5%.

Meanwhile, the S&P BSE FMCG Index is trading at Rs 12,875.4 (up 1.1%). Over the last one year it has moved up from 10,254.9 to 12,875.4, a gain of 2,621 points (up 25.6%).

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

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

Read: Latest Annual Report Analysis of COLGATE