GODREJ CONSUMER 2018-19 Annual Report Analysis

Sun, 31 Mar

GODREJ CONSUMER has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

GODREJ CONSUMER Income Statement Analysis

• Operating income during the year rose 5.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 5.9% YoY during the fiscal. Operating profit margins witnessed a fall and down at 23.1% in FY19 as against 23.1% in FY18.
• Depreciation charges increased by 9.2% and finance costs increased by 37.6% YoY, respectively.
• Other income declined by 6.0% YoY.
• Net profit for the year grew by 43.3% YoY.
• Net profit margins during the year grew from 16.7% in FY18 to 22.7% in FY19.

GODREJ CONSUMER Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	97,537	103,143	5.7%
Other income	Rs m	1,157	1,088	-6.0%
Total Revenues	Rs m	98,694	104,231	5.6%
Gross profit	Rs m	22,509	23,841	5.9%
Depreciation	Rs m	1,557	1,700	9.2%
Interest	Rs m	1,731	2,382	37.6%
Profit before tax	Rs m	20,378	20,847	2.3%
Tax	Rs m	4,047	-2,562	-163.3%
Profit after tax	Rs m	16,331	23,409	43.3%
Gross profit margin	%	23.1	23.1
Effective tax rate	%	19.9	-12.3
Net profit margin	%	16.7	22.7

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GODREJ CONSUMER Balance Sheet Analysis

• The company's current liabilities during FY19 down at Rs 39 billion as compared to Rs 42 billion in FY18, thereby witnessing an decrease of -6.8%.
• Long-term debt stood at Rs 26 billion as compared to Rs 24 billion during FY18, a growth of 9.4%.
• Current assets fell 9% and stood at Rs 47 billion, while fixed assets rose 3% and stood at Rs 89 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 136 billion as against Rs 139 billion during FY18, thereby witnessing a fall of 2%.

GODREJ CONSUMER Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	62,467	72,546	16.1
Current Liabilities	Rs m	41,760	38,918	-6.8
Long-term Debt	Rs m	23,803	26,048	9.4
Total Liabilities	Rs m	138,638	136,208	-1.8
Current assets	Rs m	51,688	46,884	-9.3
Fixed Assets	Rs m	86,950	89,324	2.7
Total Assets	Rs m	138,638	136,208	-1.8

GODREJ CONSUMER Cash Flow Statement Analysis

• GODREJ CONSUMER's cash flow from operating activities (CFO) during FY19 stood at Rs 17 billion, an improvement of 0.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs 3 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -20 billion on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -358 million from the Rs 30 million net cash flows seen during FY18.

GODREJ CONSUMER Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	17,234	17,289	0.3%
Cash Flow from Investing Activities	Rs m	-3,398	2,516	-
Cash Flow from Financing Activities	Rs m	-13,840	-20,387	-
Net Cash Flow	Rs m	30	-358	-

Current Valuations for GODREJ CONSUMER

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 22.9, an decline from the EPS of Rs 24.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 687.2, stands at 30.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 9.7 times, while the price to sales ratio stands at 6.8 times.
• The company's price to cash flow (P/CF) ratio stood at 36.7 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	143.2	100.9
TTM Earnings per share	Rs	24.0	22.9
Diluted earnings per share	Rs	16.0	22.9
Price to Cash Flow	x	62.5	36.7
TTM P/E ratio	x	67.9	30.7
Price / Book Value ratio	x	15.4	12.7
Market Cap	Rs m	962,276	920,716
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 FY19, from 1.2x during FY18. 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 9.8x during FY19, from 12.8x during FY18. 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 32.3% during FY19, from 26.1% during FY19. 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 23.6% during FY19, from 25.6% during FY18. 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 18.9% during FY19, from 13.0% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	1.2	1.2
Debtors’ Days	Days	5	5
Interest coverage	x	12.8	9.8
Debt to equity ratio	x	0.4	0.4
Return on assets	%	13.0	18.9
Return on equity	%	26.1	32.3
Return on capital employed	%	25.6	23.6

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 1,092.6 to Rs 687.2, registering a loss of Rs 405.5 or around 37.1%.

Meanwhile, the S&P BSE FMCG Index is trading at Rs 11,741.5 (down 0.1%). Over the last one year it has moved up from 10,290.1 to 11,741.5, a gain of 1,451 points (up 14.1%).

Overall, the S&P BSE SENSEX is up 16.3% 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