EPL 2021-22 Annual Report Analysis

Fri, 8 Jul

EPL 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.

EPL Income Statement Analysis

• Operating income during the year rose 11.0% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 3.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 16.8% in FY22 as against 19.2% in FY21.
• Depreciation charges increased by 7.2% and finance costs decreased by 6.1% YoY, respectively.
• Other income declined by 17.2% YoY.
• Net profit for the year declined by 6.6% YoY.
• Net profit margins during the year declined from 7.9% in FY21 to 6.7% in FY22.

EPL Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	30,916	34,328	11.0%
Other income	Rs m	145	120	-17.2%
Total Revenues	Rs m	31,061	34,448	10.9%
Gross profit	Rs m	5,950	5,761	-3.2%
Depreciation	Rs m	2,346	2,514	7.2%
Interest	Rs m	429	403	-6.1%
Profit before tax	Rs m	3,320	2,964	-10.7%
Tax	Rs m	868	675	-22.2%
Profit after tax	Rs m	2,452	2,289	-6.6%
Gross profit margin	%	19.2	16.8
Effective tax rate	%	26.1	22.8
Net profit margin	%	7.9	6.7

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EPL Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 9 billion as compared to Rs 8 billion in FY21, thereby witnessing an increase of 16.1%.
• Long-term debt stood at Rs 4 billion as compared to Rs 4 billion during FY21, a growth of 2.1%.
• Current assets rose 14% and stood at Rs 15 billion, while fixed assets rose 4% and stood at Rs 22 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 38 billion as against Rs 35 billion during FY21, thereby witnessing a growth of 8%.

EPL Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	16,837	18,018	7.0
Current Liabilities	Rs m	7,750	8,998	16.1
Long-term Debt	Rs m	3,545	3,620	2.1
Total Liabilities	Rs m	34,814	37,569	7.9
Current assets	Rs m	13,459	15,388	14.3
Fixed Assets	Rs m	21,355	22,181	3.9
Total Assets	Rs m	34,814	37,569	7.9

EPL Cash Flow Statement Analysis

• EPL's cash flow from operating activities (CFO) during FY22 stood at Rs 3 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -3 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -954 million, an improvement of 70% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -497 million from the Rs -751 million net cash flows seen during FY21.

EPL 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	5,224	3,117	-40.3%
Cash Flow from Investing Activities	Rs m	-2,805	-2,642	-
Cash Flow from Financing Activities	Rs m	-3,191	-954	-
Net Cash Flow	Rs m	-751	-497	-

Current Valuations for EPL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 7.2, an decline from the EPS of Rs 7.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 165.8, stands at 22.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.9 times, while the price to sales ratio stands at 1.5 times.
• The company's price to cash flow (P/CF) ratio stood at 14.6 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	98.0	108.7
TTM Earnings per share	Rs	7.8	7.2
Diluted earnings per share	Rs	7.8	7.2
Price to Cash Flow	x	15.5	14.6
TTM P/E ratio	x	30.4	22.9
Price / Book Value ratio	x	4.4	3.9
Market Cap	Rs m	73,606	69,957
Dividends per share (Unadj.)	Rs	4.1	4.3

Ratio Analysis for EPL

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.7x during FY22, from 1.7x 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 8.4x during FY22, from 8.7x 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 12.7% during FY22, from 14.6% 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 15.6% during FY22, from 18.4% 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 7.2% during FY22, from 8.3% 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	1.7	1.7
Debtors’ Days	Days	70	68
Interest coverage	x	8.7	8.4
Debt to equity ratio	x	0.2	0.2
Return on assets	%	8.3	7.2
Return on equity	%	14.6	12.7
Return on capital employed	%	18.4	15.6

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

EPL Share Price Performance

Over the last one year, EPL share price has moved down from Rs 269.7 to Rs 165.8, registering a loss of Rs 103.9 or around 38.5%.

Overall, the S&P BSE SENSEX is up 3.1% over the year.

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

Read: Latest Annual Report Analysis of EPL