GODREJ INDUSTRIES 2019-20 Annual Report Analysis

Tue, 31 Mar

GODREJ INDUSTRIES 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 INDUSTRIES Income Statement Analysis

• Operating income during the year rose 1.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 36.9% YoY during the fiscal. Operating profit margins witnessed a fall and down at 8.7% in FY20 as against 6.4% in FY19.
• Depreciation charges increased by 39.8% and finance costs decreased by 4.4% YoY, respectively.
• Other income grew by 18.4% YoY.
• Net profit for the year grew by 88.9% YoY.
• Net profit margins during the year grew from 2.6% in FY19 to 4.8% in FY20.

GODREJ INDUSTRIES Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	111,870	113,778	1.7%
Other income	Rs m	4,832	5,720	18.4%
Total Revenues	Rs m	116,702	119,498	2.4%
Gross profit	Rs m	7,197	9,851	36.9%
Depreciation	Rs m	1,730	2,418	39.8%
Interest	Rs m	5,163	4,935	-4.4%
Profit before tax	Rs m	5,137	8,218	60.0%
Tax	Rs m	2,222	2,714	22.1%
Profit after tax	Rs m	2,914	5,504	88.9%
Gross profit margin	%	6.4	8.7
Effective tax rate	%	43.3	33.0
Net profit margin	%	2.6	4.8

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GODREJ INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during FY20 down at Rs 102 billion as compared to Rs 102 billion in FY19, thereby witnessing an decrease of -0.3%.
• Long-term debt down at Rs 6 billion as compared to Rs 12 billion during FY19, a fall of 48.8%.
• Current assets rose 21% and stood at Rs 106 billion, while fixed assets rose 5% and stood at Rs 94 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 200 billion as against Rs 176 billion during FY19, thereby witnessing a growth of 13%.

GODREJ INDUSTRIES Balance Sheet as on March 2020

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Networth	Rs m	43,364	57,789	33.3
Current Liabilities	Rs m	101,888	101,574	-0.3
Long-term Debt	Rs m	11,962	6,126	-48.8
Total Liabilities	Rs m	176,215	199,501	13.2
Current assets	Rs m	87,299	105,733	21.1
Fixed Assets	Rs m	88,917	93,768	5.5
Total Assets	Rs m	176,215	199,501	13.2

GODREJ INDUSTRIES Cash Flow Statement Analysis

• GODREJ INDUSTRIES's cash flow from operating activities (CFO) during FY20 stood at Rs 4 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY20 stood at Rs -19 billion, an improvement of 36.5% on a YoY basis.
• Cash flow from financial activities (CFF) during FY20 stood at Rs 13 billion, an improvement of 28% on a YoY basis.
• Overall, net cash flows for the company during FY20 stood at Rs -1 billion from the Rs 9 billion net cash flows seen during FY19.

GODREJ INDUSTRIES 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	12,404	3,920	-68.4%
Cash Flow from Investing Activities	Rs m	-13,735	-18,743	-
Cash Flow from Financing Activities	Rs m	10,557	13,492	27.8%
Net Cash Flow	Rs m	9,358	-1,329	-

Current Valuations for GODREJ INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 16.4, an improvement from the EPS of Rs 8.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 283.5, stands at 25.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.7 times, while the price to sales ratio stands at 0.8 times.
• The company's price to cash flow (P/CF) ratio stood at 17.4 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	332.6	338.2
TTM Earnings per share	Rs	8.7	16.4
Diluted earnings per share	Rs	8.7	16.4
Price to Cash Flow	x	38.9	17.4
TTM P/E ratio	x	62.0	25.6
Price / Book Value ratio	x	4.2	2.4
Market Cap	Rs m	183,498	137,783
Dividends per share (Unadj.)	Rs	1.2	0.0

Ratio Analysis for GODREJ INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.0x during FY20, from 0.9x 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 improved and stood at 2.7x during FY20, from 2.0x 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 improved and stood at 9.5% during FY20, from 6.7% 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 improved and stood at 20.6% during FY20, from 18.6% 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 improved and stood at 5.2% during FY20, from 4.6% 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	0.9	1.0
Debtors’ Days	Days	4	5
Interest coverage	x	2.0	2.7
Debt to equity ratio	x	0.3	0.1
Return on assets	%	4.6	5.2
Return on equity	%	6.7	9.5
Return on capital employed	%	18.6	20.6

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 536.1 to Rs 283.5, registering a loss of Rs 252.6 or around 47.1%.

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