GODREJ CONSUMER 2017-18 Annual Report Analysis

Sat, 31 Mar

GODREJ CONSUMER has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

GODREJ CONSUMER Income Statement Analysis

• Operating income during the year rose 9.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 18.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 23.1% in FY18 as against 21.4% in FY17.
• Depreciation charges increased by 10.0% and finance costs increased by 12.3% YoY, respectively.
• Other income grew by 53.6% YoY.
• Net profit for the year grew by 24.9% YoY.
• Net profit margins during the year grew from 14.6% in FY17 to 16.7% in FY18.

GODREJ CONSUMER Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	89,270	97,537	9.3%
Other income	Rs m	753	1,157	53.6%
Total Revenues	Rs m	90,023	98,694	9.6%
Gross profit	Rs m	19,068	22,509	18.0%
Depreciation	Rs m	1,416	1,557	10.0%
Interest	Rs m	1,542	1,731	12.3%
Profit before tax	Rs m	16,863	20,378	20.8%
Tax	Rs m	3,792	4,047	6.7%
Profit after tax	Rs m	13,072	16,331	24.9%
Gross profit margin	%	21.4	23.1
Effective tax rate	%	22.5	19.9
Net profit margin	%	14.6	16.7

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GODREJ CONSUMER Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 42 billion as compared to Rs 33 billion in FY17, thereby witnessing an increase of 24.8%.
• Long-term debt down at Rs 24 billion as compared to Rs 31 billion during FY17, a fall of 23.4%.
• Current assets rose 18% and stood at Rs 52 billion, while fixed assets rose 2% and stood at Rs 87 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 139 billion as against Rs 129 billion during FY17, thereby witnessing a growth of 7%.

GODREJ CONSUMER Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	52,921	62,467	18.0
Current Liabilities	Rs m	33,474	41,760	24.8
Long-term Debt	Rs m	31,083	23,803	-23.4
Total Liabilities	Rs m	129,403	138,638	7.1
Current assets	Rs m	43,781	51,688	18.1
Fixed Assets	Rs m	85,622	86,950	1.6
Total Assets	Rs m	129,403	138,638	7.1

GODREJ CONSUMER Cash Flow Statement Analysis

• GODREJ CONSUMER's cash flow from operating activities (CFO) during FY18 stood at Rs 17 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -3 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -14 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 30 million from the Rs 3 billion net cash flows seen during FY17.

GODREJ CONSUMER Cash Flow Statement 2017-18

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-17	Mar-18
Cash Flow from Operating Activities	Rs m	18,602	17,234	-7.4%
Cash Flow from Investing Activities	Rs m	-21,698	-3,398	-
Cash Flow from Financing Activities	Rs m	6,647	-13,840	-
Net Cash Flow	Rs m	3,160	30	-99.1%

Current Valuations for GODREJ CONSUMER

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 24.0, an decline from the EPS of Rs 38.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,092.6, stands at 67.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 17.9 times, while the price to sales ratio stands at 7.6 times.
• The company's price to cash flow (P/CF) ratio stood at 53.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Sales per share (Unadj.)	Rs	262.1	143.2
TTM Earnings per share	Rs	38.4	24.0
Diluted earnings per share	Rs	12.8	16.0
Price to Cash Flow	x	117.9	53.8
TTM P/E ratio	x	130.9	67.9
Price / Book Value ratio	x	9.7	15.4
Market Cap	Rs m	513,796	962,276
Dividends per share (Unadj.)	Rs	15.0	15.0

Ratio Analysis for GODREJ CONSUMER

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.2x during FY18, from 1.3x during FY17. 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 12.8x during FY18, from 11.9x during FY17. 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 26.1% during FY18, from 24.7% during FY18. 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 25.6% during FY18, from 21.9% during FY17. 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 13.0% during FY18, from 11.3% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Current ratio	x	1.3	1.2
Debtors’ Days	Days	4	5
Interest coverage	x	11.9	12.8
Debt to equity ratio	x	0.6	0.4
Return on assets	%	11.3	13.0
Return on equity	%	24.7	26.1
Return on capital employed	%	21.9	25.6

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

GODREJ CONSUMER Share Price Performance

Over the last one year, GODREJ CONSUMER share price has moved down from Rs 1,670.0 to Rs 1,092.6, registering a loss of Rs 577.4 or around 34.6%.

Meanwhile, the S&P BSE FMCG Index is trading at Rs 10,290.1 (down 0.4%). Over the last one year it has moved up from 9,270.3 to 10,290.1, a gain of 1,020 points (up 11.0%).

Overall, the S&P BSE SENSEX is up 12.1% over the year.

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

Read: Latest Annual Report Analysis of GODREJ CONSUMER