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COLGATE 2021-22 Annual Report Analysis

Tue, 5 Jul

COLGATE 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.

COLGATE Income Statement Analysis

• Operating income during the year rose 5.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 3.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 30.7% in FY22 as against 31.2% in FY21.
• Depreciation charges decreased by 2.8% and finance costs decreased by 18.8% YoY, respectively.
• Other income declined by 13.5% YoY.
• Net profit for the year grew by 4.1% YoY.
• Net profit margins during the year declined from 21.4% in FY21 to 21.1% in FY22.

COLGATE Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	48,412	50,998	5.3%
Other income	Rs m	304	263	-13.5%
Total Revenues	Rs m	48,716	51,260	5.2%
Gross profit	Rs m	15,096	15,659	3.7%
Depreciation	Rs m	1,825	1,773	-2.8%
Interest	Rs m	73	59	-18.8%
Profit before tax	Rs m	13,502	14,090	4.4%
Tax	Rs m	3,148	3,307	5.0%
Profit after tax	Rs m	10,354	10,783	4.1%
Gross profit margin	%	31.2	30.7
Effective tax rate	%	23.3	23.5
Net profit margin	%	21.4	21.1

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COLGATE Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 26 billion as compared to Rs 24 billion in FY21, thereby witnessing an increase of 8.0%.
• Current assets rose 39% and stood at Rs 30 billion, while fixed assets fell 14% and stood at Rs 31 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 61 billion as against Rs 57 billion during FY21, thereby witnessing a growth of 6%.

COLGATE Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	11,662	17,325	48.6
Current Liabilities	Rs m	24,055	25,977	8.0
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	57,357	60,704	5.8
Current assets	Rs m	21,601	29,981	38.8
Fixed Assets	Rs m	35,756	30,723	-14.1
Total Assets	Rs m	57,357	60,704	5.8

COLGATE Cash Flow Statement Analysis

• COLGATE's cash flow from operating activities (CFO) during FY22 stood at Rs 16 billion, an improvement of 107.4% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -1 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -11 billion on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 4 billion from the Rs -1 billion net cash flows seen during FY21.

COLGATE 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	7,839	16,257	107.4%
Cash Flow from Investing Activities	Rs m	714	-1,076	-
Cash Flow from Financing Activities	Rs m	-9,565	-10,906	-
Net Cash Flow	Rs m	-1,012	4,275	-

Current Valuations for COLGATE

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 39.6, an improvement from the EPS of Rs 38.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,530.0, stands at 38.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 24.0 times, while the price to sales ratio stands at 8.2 times.
• The company's price to cash flow (P/CF) ratio stood at 34.6 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	178.0	187.5
TTM Earnings per share	Rs	38.1	39.6
Diluted earnings per share	Rs	38.1	39.6
Price to Cash Flow	x	34.8	34.6
TTM P/E ratio	x	41.0	38.6
Price / Book Value ratio	x	33.7	25.1
Market Cap	Rs m	393,121	434,980
Dividends per share (Unadj.)	Rs	38.0	40.0

Ratio Analysis for COLGATE

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.2x during FY22, from 0.9x 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 240.0x during FY22, from 187.0x 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 62.2% during FY22, from 88.8% 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 81.7% during FY22, from 116.4% 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 17.9% during FY22, from 18.2% 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	0.9	1.2
Debtors’ Days	Days	88	161
Interest coverage	x	187.0	240.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	18.2	17.9
Return on equity	%	88.8	62.2
Return on capital employed	%	116.4	81.7

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 down from Rs 1,687.7 to Rs 1,530.0, registering a loss of Rs 157.7 or around 9.3%.

Meanwhile, the S&P BSE FMCG Index is trading at Rs 14,438.9 (down 0.1%). Over the last one year it has moved up from 13,668.5 to 14,438.9, a gain of 770 points (up 5.6%).

Overall, the S&P BSE SENSEX is up 1.5% 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