FINE ORGANIC INDUSTRIES 2020-21 Annual Report Analysis

Wed, 31 Mar

FINE ORGANIC INDUSTRIES has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

FINE ORGANIC INDUSTRIES Income Statement Analysis

• Operating income during the year rose 9.2% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 17.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 17.6% in FY21 as against 23.2% in FY20.
• Depreciation charges increased by 35.0% and finance costs decreased by 23.2% YoY, respectively.
• Other income declined by 26.8% YoY.
• Net profit for the year declined by 28.4% YoY.
• Net profit margins during the year declined from 16.4% in FY20 to 10.7% in FY21.

FINE ORGANIC INDUSTRIES Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	10,381	11,332	9.2%
Other income	Rs m	233	171	-26.8%
Total Revenues	Rs m	10,614	11,503	8.4%
Gross profit	Rs m	2,405	1,993	-17.1%
Depreciation	Rs m	347	468	35.0%
Interest	Rs m	80	61	-23.2%
Profit before tax	Rs m	2,212	1,635	-26.1%
Tax	Rs m	513	418	-18.5%
Profit after tax	Rs m	1,699	1,216	-28.4%
Gross profit margin	%	23.2	17.6
Effective tax rate	%	23.2	25.6
Net profit margin	%	16.4	10.7

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FINE ORGANIC INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 2 billion as compared to Rs 1 billion in FY20, thereby witnessing an increase of 15.2%.
• Long-term debt down at Rs 567 million as compared to Rs 915 million during FY20, a fall of 38.0%.
• Current assets rose 18% and stood at Rs 6 billion, while fixed assets fell 1% and stood at Rs 3 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 9 billion as against Rs 8 billion during FY20, thereby witnessing a growth of 11%.

FINE ORGANIC INDUSTRIES Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	6,189	7,314	18.2
Current Liabilities	Rs m	1,341	1,544	15.2
Long-term Debt	Rs m	915	567	-38.0
Total Liabilities	Rs m	8,453	9,390	11.1
Current assets	Rs m	5,243	6,198	18.2
Fixed Assets	Rs m	3,211	3,192	-0.6
Total Assets	Rs m	8,453	9,390	11.1

FINE ORGANIC INDUSTRIES Cash Flow Statement Analysis

• FINE ORGANIC INDUSTRIES's cash flow from operating activities (CFO) during FY21 stood at Rs 1 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -403 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -399 million on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 533 million from the Rs 975 million net cash flows seen during FY20.

FINE ORGANIC INDUSTRIES Cash Flow Statement 2020-21

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-20	Mar-21
Cash Flow from Operating Activities	Rs m	2,190	1,334	-39.1%
Cash Flow from Investing Activities	Rs m	-847	-403	-
Cash Flow from Financing Activities	Rs m	-367	-399	-
Net Cash Flow	Rs m	975	533	-45.3%

Current Valuations for FINE ORGANIC INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 39.7, an decline from the EPS of Rs 55.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,282.9, stands at 57.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 9.6 times, while the price to sales ratio stands at 6.2 times.
• The company's price to cash flow (P/CF) ratio stood at 46.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Sales per share (Unadj.)	Rs	338.6	369.6
TTM Earnings per share	Rs	55.4	39.7
Diluted earnings per share	Rs	55.4	39.7
Price to Cash Flow	x	28.5	46.3
TTM P/E ratio	x	34.3	57.5
Price / Book Value ratio	x	9.4	10.7
Market Cap	Rs m	58,152	77,942
Dividends per share (Unadj.)	Rs	7.0	11.0

Ratio Analysis for FINE ORGANIC INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 4.0x during FY21, from 3.9x during FY20. 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 27.7x during FY21, from 28.7x during FY20. 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 16.6% during FY21, from 27.4% during FY21. 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 21.5% during FY21, from 32.3% during FY20. 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 13.6% during FY21, from 21.0% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Current ratio	x	3.9	4.0
Debtors’ Days	Days	465	519
Interest coverage	x	28.7	27.7
Debt to equity ratio	x	0.1	0.1
Return on assets	%	21.0	13.6
Return on equity	%	27.4	16.6
Return on capital employed	%	32.3	21.5

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

FINE ORGANIC INDUSTRIES Share Price Performance

Over the last one year, FINE ORGANIC INDUSTRIES share price has moved up from Rs 1,901.8 to Rs 2,282.9, registering a gain of Rs 381.1 or around 20.0%.

Overall, the S&P BSE SENSEX is up 74.1% over the year.

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

Read: Latest Annual Report Analysis of FINE ORGANIC INDUSTRIES