GODREJ INDUSTRIES 2018-19 Annual Report Analysis

Sun, 31 Mar

GODREJ INDUSTRIES 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 INDUSTRIES Income Statement Analysis

• Operating income during the year rose 23.9% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 314.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 6.4% in FY19 as against 3.7% in FY18.
• Depreciation charges decreased by 1.3% and finance costs increased by 25.0% YoY, respectively.
• Other income declined by 59.0% YoY.
• Net profit for the year grew by 106.2% YoY.
• Net profit margins during the year grew from 1.6% in FY18 to 2.6% in FY19.

GODREJ INDUSTRIES Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	90,271	111,870	23.9%
Other income	Rs m	11,782	4,832	-59.0%
Total Revenues	Rs m	102,053	116,702	14.4%
Gross profit	Rs m	-3,359	7,197	-314.2%
Depreciation	Rs m	1,753	1,730	-1.3%
Interest	Rs m	4,132	5,163	25.0%
Profit before tax	Rs m	2,538	5,137	102.4%
Tax	Rs m	1,125	2,222	97.5%
Profit after tax	Rs m	1,413	2,914	106.2%
Gross profit margin	%	-3.7	6.4
Effective tax rate	%	44.3	43.3
Net profit margin	%	1.6	2.6

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GODREJ INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during FY19 down at Rs 102 billion as compared to Rs 111 billion in FY18, thereby witnessing an decrease of -7.9%.
• Long-term debt stood at Rs 12 billion as compared to Rs 10 billion during FY18, a growth of 25.6%.
• Current assets rose 0% and stood at Rs 87 billion, while fixed assets rose 19% and stood at Rs 89 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 176 billion as against Rs 162 billion during FY18, thereby witnessing a growth of 9%.

GODREJ INDUSTRIES Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	33,268	43,364	30.3
Current Liabilities	Rs m	110,678	101,888	-7.9
Long-term Debt	Rs m	9,523	11,962	25.6
Total Liabilities	Rs m	162,222	176,215	8.6
Current assets	Rs m	87,194	87,299	0.1
Fixed Assets	Rs m	75,028	88,917	18.5
Total Assets	Rs m	162,222	176,215	8.6

GODREJ INDUSTRIES Cash Flow Statement Analysis

• GODREJ INDUSTRIES's cash flow from operating activities (CFO) during FY19 stood at Rs 12 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -14 billion, an improvement of 35.2% on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs 11 billion, an improvement of 210% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 9 billion from the Rs -3 billion net cash flows seen during FY18.

GODREJ INDUSTRIES 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	16,890	12,404	-26.6%
Cash Flow from Investing Activities	Rs m	-10,158	-13,735	-
Cash Flow from Financing Activities	Rs m	-9,593	10,557	-
Net Cash Flow	Rs m	-2,861	9,358	-

Current Valuations for GODREJ INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 8.7, an improvement from the EPS of Rs 4.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 536.1, stands at 62.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.2 times, while the price to sales ratio stands at 1.6 times.
• The company's price to cash flow (P/CF) ratio stood at 39.5 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	268.4	332.6
TTM Earnings per share	Rs	4.2	8.7
Diluted earnings per share	Rs	4.2	8.7
Price to Cash Flow	x	58.3	39.5
TTM P/E ratio	x	36.8	62.0
Price / Book Value ratio	x	6.1	4.2
Market Cap	Rs m	201,965	183,498
Dividends per share (Unadj.)	Rs	1.8	1.2

Ratio Analysis for GODREJ INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.9x during FY19, from 0.8x 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 improved and stood at 2.0x during FY19, from 1.6x 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 6.7% during FY19, from 4.2% 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 improved and stood at 18.6% during FY19, from 15.6% 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 4.6% during FY19, from 3.4% 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	0.8	0.9
Debtors’ Days	Days	4	4
Interest coverage	x	1.6	2.0
Debt to equity ratio	x	0.3	0.3
Return on assets	%	3.4	4.6
Return on equity	%	4.2	6.7
Return on capital employed	%	15.6	18.6

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

GODREJ INDUSTRIES Share Price Performance

Over the last one year, GODREJ INDUSTRIES share price has moved down from Rs 547.9 to Rs 536.1, registering a loss of Rs 11.9 or around 2.2%.

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

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

Read: Latest Annual Report Analysis of GODREJ INDUSTRIES