CLARIANT CHEMICALS 2018-19 Annual Report Analysis

Sun, 31 Mar

CLARIANT CHEMICALS has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

CLARIANT CHEMICALS Income Statement Analysis

• Operating income during the year rose 3.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 12.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 4.8% in FY19 as against 4.4% in FY18.
• Depreciation charges decreased by 22.7% and finance costs increased by 4.2% YoY, respectively.
• Other income declined by 61.9% YoY.
• Net profit for the year declined by 14.1% YoY.
• Net profit margins during the year declined from 2.2% in FY18 to 1.8% in FY19.

CLARIANT CHEMICALS Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	9,984	10,288	3.0%
Other income	Rs m	278	106	-61.9%
Total Revenues	Rs m	10,262	10,394	1.3%
Gross profit	Rs m	440	494	12.2%
Depreciation	Rs m	377	292	-22.7%
Interest	Rs m	6	6	4.2%
Profit before tax	Rs m	334	301	-9.8%
Tax	Rs m	118	116	-1.9%
Profit after tax	Rs m	216	186	-14.1%
Gross profit margin	%	4.4	4.8
Effective tax rate	%	35.4	38.4
Net profit margin	%	2.2	1.8

Must See: Do You Invest in Midcap Stocks? Here's a Great News for You

CLARIANT CHEMICALS Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 2 billion as compared to Rs 2 billion in FY18, thereby witnessing an increase of 6.4%.
• Current assets rose 1% and stood at Rs 5 billion, while fixed assets fell 1% and stood at Rs 4 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 9 billion as against Rs 9 billion during FY18, thereby witnessing a growth of 0%.

CLARIANT CHEMICALS Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	6,246	6,164	-1.3
Current Liabilities	Rs m	2,349	2,498	6.4
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	8,926	8,945	0.2
Current assets	Rs m	4,704	4,758	1.1
Fixed Assets	Rs m	4,222	4,187	-0.8
Total Assets	Rs m	8,926	8,945	0.2

CLARIANT CHEMICALS Cash Flow Statement Analysis

• CLARIANT CHEMICALS's cash flow from operating activities (CFO) during FY19 stood at Rs 294 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs 69 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -283 million, an improvement of 60% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 80 million from the Rs -41 million net cash flows seen during FY18.

CLARIANT CHEMICALS Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	-11	294	-
Cash Flow from Investing Activities	Rs m	670	69	-89.7%
Cash Flow from Financing Activities	Rs m	-701	-283	-
Net Cash Flow	Rs m	-41	80	-

Current Valuations for CLARIANT CHEMICALS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 8.0, an decline from the EPS of Rs 9.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 363.0, stands at 45.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.4 times, while the price to sales ratio stands at 0.8 times.
• The company's price to cash flow (P/CF) ratio stood at 21.6 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	432.6	445.8
TTM Earnings per share	Rs	9.4	8.0
Diluted earnings per share	Rs	9.4	8.0
Price to Cash Flow	x	20.7	21.6
TTM P/E ratio	x	56.9	45.2
Price / Book Value ratio	x	2.3	1.7
Market Cap	Rs m	14,287	10,318
Dividends per share (Unadj.)	Rs	5.0	10.0

Ratio Analysis for CLARIANT CHEMICALS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.9x during FY19, from 2.0x during FY18. 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 49.4x during FY19, from 56.9x during FY18. 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 3.0% during FY19, from 3.5% during FY19. 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 5.0% during FY19, from 5.4% during FY18. 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 2.1% during FY19, from 2.5% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	2.0	1.9
Debtors’ Days	Days	650	644
Interest coverage	x	56.9	49.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	2.5	2.1
Return on equity	%	3.5	3.0
Return on capital employed	%	5.4	5.0

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

CLARIANT CHEMICALS Share Price Performance

Over the last one year, CLARIANT CHEMICALS share price has moved down from Rs 532.5 to Rs 363.0, registering a loss of Rs 169.5 or around 31.8%.

Overall, the S&P BSE SENSEX is up 16.3% over the year.

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

Read: Latest Annual Report Analysis of HEUBACH COLORANTS