COLGATE 2022-23 Annual Report Analysis

Fri, 30 Jun

COLGATE has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

COLGATE Income Statement Analysis

• Operating income during the year rose 2.5% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 1.9% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 29.4% in FY23 as against 30.7% in FY22.
• Depreciation charges decreased by 1.4% and finance costs decreased by 16.6% YoY, respectively.
• Other income grew by 104.0% YoY.
• Net profit for the year declined by 2.9% YoY.
• Net profit margins during the year declined from 21.1% in FY22 to 20.0% in FY23.

COLGATE Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	50,998	52,262	2.5%
Other income	Rs m	263	536	104.0%
Total Revenues	Rs m	51,260	52,798	3.0%
Gross profit	Rs m	15,659	15,358	-1.9%
Depreciation	Rs m	1,773	1,748	-1.4%
Interest	Rs m	59	49	-16.6%
Profit before tax	Rs m	14,090	14,097	0.0%
Tax	Rs m	3,307	3,625	9.6%
Profit after tax	Rs m	10,783	10,471	-2.9%
Gross profit margin	%	30.7	29.4
Effective tax rate	%	23.5	25.7
Net profit margin	%	21.1	20.0

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COLGATE Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 26 billion as compared to Rs 26 billion in FY22, thereby witnessing an increase of 0.1%.
• Current assets rose 2% and stood at Rs 31 billion, while fixed assets rose 9% and stood at Rs 33 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 64 billion as against Rs 61 billion during FY22, thereby witnessing a growth of 6%.

COLGATE Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	17,325	17,209	-0.7
Current Liabilities	Rs m	25,977	25,999	0.1
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	60,704	64,118	5.6
Current assets	Rs m	29,981	30,631	2.2
Fixed Assets	Rs m	30,723	33,487	9.0
Total Assets	Rs m	60,704	64,118	5.6

COLGATE Cash Flow Statement Analysis

• COLGATE's cash flow from operating activities (CFO) during FY23 stood at Rs 12 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -75 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -11 billion, an improvement of 0% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 820 million from the Rs 4 billion net cash flows seen during FY22.

COLGATE Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	16,257	11,763	-27.6%
Cash Flow from Investing Activities	Rs m	-1,076	-75	-
Cash Flow from Financing Activities	Rs m	-10,906	-10,867	-
Net Cash Flow	Rs m	4,275	820	-80.8%

Current Valuations for COLGATE

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 38.5, an decline from the EPS of Rs 39.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,686.9, stands at 43.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 26.7 times, while the price to sales ratio stands at 8.8 times.
• The company's price to cash flow (P/CF) ratio stood at 34.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	187.5	192.1
TTM Earnings per share	Rs	39.6	38.5
Diluted earnings per share	Rs	39.6	38.5
Price to Cash Flow	x	33.4	34.8
TTM P/E ratio	x	38.9	43.8
Price / Book Value ratio	x	25.1	24.7
Market Cap	Rs m	434,980	425,603
Dividends per share (Unadj.)	Rs	40.0	39.0

Ratio Analysis for COLGATE

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.2x during FY23, from 1.2x during FY22. 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 287.9x during FY23, from 240.0x during FY22. 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 60.8% during FY23, from 62.2% during FY23. 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 82.2% during FY23, from 81.7% during FY22. 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 16.4% during FY23, from 17.9% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	1.2	1.2
Debtors’ Days	Days	161	110
Interest coverage	x	240.0	287.9
Debt to equity ratio	x	0.0	0.0
Return on assets	%	17.9	16.4
Return on equity	%	62.2	60.8
Return on capital employed	%	81.7	82.2

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 1,488.0 to Rs 1,686.9, registering a gain of Rs 198.9 or around 13.4%.

Meanwhile, the S&P BSE FMCG Index is trading at Rs 18,624.3 (up 0.2%). Over the last one year it has moved up from 13,766.1 to 18,624.3, a gain of 4,858 points (up 35.3%).

Overall, the S&P BSE SENSEX is up 21.2% over the year.

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