FAIRCHEM ORGANICS 2021-22 Annual Report Analysis

Wed, 20 Jul

FAIRCHEM ORGANICS 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.

FAIRCHEM ORGANICS Income Statement Analysis

• Operating income during the year rose 62.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 52.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 16.3% in FY22 as against 17.4% in FY21.
• Depreciation charges increased by 8.5% and finance costs decreased by 1.7% YoY, respectively.
• Other income grew by 28.4% YoY.
• Net profit for the year grew by 59.8% YoY.
• Net profit margins during the year declined from 10.7% in FY21 to 10.6% in FY22.

FAIRCHEM ORGANICS Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	3,966	6,432	62.2%
Other income	Rs m	3	4	28.4%
Total Revenues	Rs m	3,969	6,435	62.2%
Gross profit	Rs m	688	1,049	52.4%
Depreciation	Rs m	66	71	8.5%
Interest	Rs m	70	69	-1.7%
Profit before tax	Rs m	556	912	64.2%
Tax	Rs m	131	233	78.4%
Profit after tax	Rs m	425	679	59.8%
Gross profit margin	%	17.4	16.3
Effective tax rate	%	23.5	25.6
Net profit margin	%	10.7	10.6

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FAIRCHEM ORGANICS Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 674 million as compared to Rs 508 million in FY21, thereby witnessing an increase of 32.7%.
• Long-term debt down at Rs 100 million as compared to Rs 260 million during FY21, a fall of 61.6%.
• Current assets rose 40% and stood at Rs 1 billion, while fixed assets rose 16% and stood at Rs 2 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 3 billion as against Rs 3 billion during FY21, thereby witnessing a growth of 25%.

FAIRCHEM ORGANICS Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	1,687	2,322	37.6
Current Liabilities	Rs m	508	674	32.7
Long-term Debt	Rs m	260	100	-61.6
Total Liabilities	Rs m	2,586	3,241	25.3
Current assets	Rs m	978	1,372	40.3
Fixed Assets	Rs m	1,608	1,868	16.2
Total Assets	Rs m	2,586	3,241	25.3

FAIRCHEM ORGANICS Cash Flow Statement Analysis

• FAIRCHEM ORGANICS's cash flow from operating activities (CFO) during FY22 stood at Rs 405 million, an improvement of 2.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -342 million, an improvement of 49.9% on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -63 million, an improvement of 62% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 0 million from the Rs 0 million net cash flows seen during FY21.

FAIRCHEM ORGANICS 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	396	405	2.3%
Cash Flow from Investing Activities	Rs m	-228	-342	-
Cash Flow from Financing Activities	Rs m	-168	-63	-
Net Cash Flow	Rs m	0	0	-

Current Valuations for FAIRCHEM ORGANICS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 52.2, an improvement from the EPS of Rs 32.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,494.0, stands at 28.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 8.4 times, while the price to sales ratio stands at 3.0 times.
• The company's price to cash flow (P/CF) ratio stood at 25.2 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	304.6	494.0
TTM Earnings per share	Rs	32.6	52.2
Diluted earnings per share	Rs	32.6	52.2
Price to Cash Flow	x	19.9	25.2
TTM P/E ratio	x	22.9	28.6
Price / Book Value ratio	x	4.9	8.1
Market Cap	Rs m	8,307	18,880
Dividends per share (Unadj.)	Rs	3.5	13.0

Ratio Analysis for FAIRCHEM ORGANICS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.0x 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 improved and stood at 14.3x during FY22, from 9.0x 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 improved and stood at 29.3% during FY22, from 25.2% 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 improved and stood at 40.5% during FY22, from 32.1% 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 improved and stood at 23.1% during FY22, from 19.1% 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	2.0
Debtors’ Days	Days	430	353
Interest coverage	x	9.0	14.3
Debt to equity ratio	x	0.2	0.0
Return on assets	%	19.1	23.1
Return on equity	%	25.2	29.3
Return on capital employed	%	32.1	40.5

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

FAIRCHEM ORGANICS Share Price Performance

Over the last one year, FAIRCHEM ORGANICS share price has moved down from Rs 1,567.5 to Rs 1,494.0, registering a loss of Rs 73.5 or around 4.7%.

Overall, the S&P BSE SENSEX is up 5.7% over the year.

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

Read: Latest Annual Report Analysis of FAIRCHEM ORGANICS