ESTER INDUSTRIES 2021-22 Annual Report Analysis

Fri, 7 Oct

ESTER INDUSTRIES 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.

ESTER INDUSTRIES Income Statement Analysis

• Operating income during the year rose 41.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 4.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 17.1% in FY22 as against 23.3% in FY21.
• Depreciation charges increased by 9.8% and finance costs increased by 33.9% YoY, respectively.
• Other income grew by 11.9% YoY.
• Net profit for the year declined by 0.6% YoY.
• Net profit margins during the year grew from 0.0% in FY21 to 9.7% in FY22.

ESTER INDUSTRIES Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	9,918	14,057	41.7%
Other income	Rs m	80	89	11.9%
Total Revenues	Rs m	9,997	14,146	41.5%
Gross profit	Rs m	2,312	2,408	4.2%
Depreciation	Rs m	352	387	9.8%
Interest	Rs m	186	249	33.9%
Profit before tax	Rs m	1,854	1,862	0.4%
Tax	Rs m	479	495	3.3%
Profit after tax	Rs m	1,375	1,367	-0.6%
Gross profit margin	%	23.3	17.1
Effective tax rate	%	25.8	26.6
Net profit margin	%	0.0	9.7

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ESTER INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 3 billion as compared to Rs 2 billion in FY21, thereby witnessing an increase of 46.4%.
• Long-term debt stood at Rs 5 billion as compared to Rs 989 million during FY21, a growth of 379.1%.
• Current assets rose 49% and stood at Rs 5 billion, while fixed assets rose 77% and stood at Rs 9 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 14 billion as against Rs 9 billion during FY21, thereby witnessing a growth of 66%.

ESTER INDUSTRIES Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	5,120	6,211	21.3
Current Liabilities	Rs m	1,853	2,712	46.4
Long-term Debt	Rs m	989	4,739	379.1
Total Liabilities	Rs m	8,617	14,282	65.7
Current assets	Rs m	3,540	5,288	49.4
Fixed Assets	Rs m	5,077	8,994	77.2
Total Assets	Rs m	8,617	14,282	65.7

ESTER INDUSTRIES Cash Flow Statement Analysis

• ESTER INDUSTRIES's cash flow from operating activities (CFO) during FY22 stood at Rs 619 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -4 billion, an improvement of 165.9% on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs 4 billion, an improvement of 11,433% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 543 million from the Rs 16 million net cash flows seen during FY21.

ESTER INDUSTRIES 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	1,455	619	-57.5%
Cash Flow from Investing Activities	Rs m	-1,473	-3,916	-
Cash Flow from Financing Activities	Rs m	33	3,841	11,433.1%
Net Cash Flow	Rs m	16	543	3,334.1%

Current Valuations for ESTER INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 16.4, an decline from the EPS of Rs 16.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 183.9, stands at 11.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.5 times, while the price to sales ratio stands at 1.1 times.
• The company's price to cash flow (P/CF) ratio stood at 6.6 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	118.9	168.6
TTM Earnings per share	Rs	16.5	16.4
Diluted earnings per share	Rs	16.5	16.4
Price to Cash Flow	x	5.6	6.6
TTM P/E ratio	x	7.1	11.5
Price / Book Value ratio	x	1.3	1.9
Market Cap	Rs m	6,734	11,567
Dividends per share (Unadj.)	Rs	3.4	3.3

Ratio Analysis for ESTER INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.9x during FY22, from 1.9x 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 deteriorated and stood at 8.5x during FY22, from 11.0x 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 22.0% during FY22, from 26.9% 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 19.3% during FY22, from 33.4% 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 11.3% during FY22, from 18.1% 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	1.9	1.9
Debtors’ Days	Days	556	502
Interest coverage	x	11.0	8.5
Debt to equity ratio	x	0.2	0.8
Return on assets	%	18.1	11.3
Return on equity	%	26.9	22.0
Return on capital employed	%	33.4	19.3

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

ESTER INDUSTRIES Share Price Performance

Over the last one year, ESTER INDUSTRIES share price has moved up from Rs 149.1 to Rs 183.9, registering a gain of Rs 34.8 or around 23.3%.

Overall, the S&P BSE SENSEX is down 2.1% over the year.

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

Read: Latest Annual Report Analysis of ESTER INDUSTRIES