GODREJ CONSUMER 2019-20 Annual Report Analysis

Tue, 31 Mar

GODREJ CONSUMER has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

GODREJ CONSUMER Income Statement Analysis

• Operating income during the year fell 3.9% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 13.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 20.9% in FY20 as against 23.1% in FY19.
• Depreciation charges increased by 16.1% and finance costs decreased by 4.2% YoY, respectively.
• Other income grew by 3.3% YoY.
• Net profit for the year declined by 36.1% YoY.
• Net profit margins during the year declined from 22.7% in FY19 to 15.1% in FY20.

GODREJ CONSUMER Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	103,143	99,108	-3.9%
Other income	Rs m	1,088	1,123	3.3%
Total Revenues	Rs m	104,231	100,231	-3.8%
Gross profit	Rs m	23,841	20,727	-13.1%
Depreciation	Rs m	1,700	1,973	16.1%
Interest	Rs m	2,382	2,281	-4.2%
Profit before tax	Rs m	20,847	17,596	-15.6%
Tax	Rs m	-2,562	2,638	-203.0%
Profit after tax	Rs m	23,409	14,958	-36.1%
Gross profit margin	%	23.1	20.9
Effective tax rate	%	-12.3	15.0
Net profit margin	%	22.7	15.1

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GODREJ CONSUMER Balance Sheet Analysis

• The company's current liabilities during FY20 stood at Rs 45 billion as compared to Rs 39 billion in FY19, thereby witnessing an increase of 16.8%.
• Long-term debt down at Rs 21 billion as compared to Rs 26 billion during FY19, a fall of 17.6%.
• Current assets rose 3% and stood at Rs 48 billion, while fixed assets rose 6% and stood at Rs 95 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 143 billion as against Rs 136 billion during FY19, thereby witnessing a growth of 5%.

GODREJ CONSUMER Balance Sheet as on March 2020

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Networth	Rs m	72,546	78,857	8.7
Current Liabilities	Rs m	38,918	45,466	16.8
Long-term Debt	Rs m	26,048	21,450	-17.6
Total Liabilities	Rs m	136,208	143,102	5.1
Current assets	Rs m	46,884	48,083	2.6
Fixed Assets	Rs m	89,324	95,019	6.4
Total Assets	Rs m	136,208	143,102	5.1

GODREJ CONSUMER Cash Flow Statement Analysis

• GODREJ CONSUMER's cash flow from operating activities (CFO) during FY20 stood at Rs 16 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY20 stood at Rs -5 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY20 stood at Rs -13 billion, an improvement of 36% on a YoY basis.
• Overall, net cash flows for the company during FY20 stood at Rs -3 billion from the Rs -358 million net cash flows seen during FY19.

GODREJ CONSUMER Cash Flow Statement 2019-20

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-19	Mar-20
Cash Flow from Operating Activities	Rs m	17,289	15,881	-8.1%
Cash Flow from Investing Activities	Rs m	2,516	-5,333	-
Cash Flow from Financing Activities	Rs m	-20,387	-12,953	-
Net Cash Flow	Rs m	-358	-2,555	-

Current Valuations for GODREJ CONSUMER

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 14.6, an decline from the EPS of Rs 22.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 520.7, stands at 35.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.8 times, while the price to sales ratio stands at 5.4 times.
• The company's price to cash flow (P/CF) ratio stood at 36.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Sales per share (Unadj.)	Rs	100.9	96.9
TTM Earnings per share	Rs	22.9	14.6
Diluted earnings per share	Rs	22.9	14.6
Price to Cash Flow	x	28.0	36.1
TTM P/E ratio	x	30.7	35.6
Price / Book Value ratio	x	12.7	7.8
Market Cap	Rs m	920,716	611,805
Dividends per share (Unadj.)	Rs	15.0	8.0

Ratio Analysis for GODREJ CONSUMER

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.1x during FY20, from 1.2x during FY19. 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 8.7x during FY20, from 9.8x during FY19. 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 19.0% during FY20, from 32.3% during FY20. 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 19.8% during FY20, from 23.6% during FY19. 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 12.0% during FY20, from 18.9% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Current ratio	x	1.2	1.1
Debtors’ Days	Days	5	4
Interest coverage	x	9.8	8.7
Debt to equity ratio	x	0.4	0.3
Return on assets	%	18.9	12.0
Return on equity	%	32.3	19.0
Return on capital employed	%	23.6	19.8

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 687.2 to Rs 520.7, registering a loss of Rs 166.5 or around 24.2%.

Meanwhile, the S&P BSE FMCG Index is trading at Rs 10,254.9 (up 5.8%). Over the last one year it has moved down from 11,741.5 to 10,254.9, a loss of 1,487 points (down 12.7%).

Overall, the S&P BSE SENSEX is down 24.2% 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