GHCL 2021-22 Annual Report Analysis

Tue, 14 Jun

GHCL has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

GHCL Income Statement Analysis

• Operating income during the year rose 51.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 64.1% YoY during the fiscal. Operating profit margins witnessed a fall and down at 25.9% in FY22 as against 23.9% in FY21.
• Depreciation charges increased by 4.8% and finance costs decreased by 14.5% YoY, respectively.
• Other income grew by 62.7% YoY.
• Net profit for the year grew by 95.0% YoY.
• Net profit margins during the year grew from 12.3% in FY21 to 15.8% in FY22.

GHCL Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	24,912	37,784	51.7%
Other income	Rs m	75	121	62.7%
Total Revenues	Rs m	24,986	37,905	51.7%
Gross profit	Rs m	5,964	9,790	64.1%
Depreciation	Rs m	1,114	1,168	4.8%
Interest	Rs m	743	636	-14.5%
Profit before tax	Rs m	4,182	8,108	93.9%
Tax	Rs m	1,113	2,125	90.9%
Profit after tax	Rs m	3,068	5,983	95.0%
Gross profit margin	%	23.9	25.9
Effective tax rate	%	26.6	26.2
Net profit margin	%	12.3	15.8

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GHCL Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 14 billion as compared to Rs 8 billion in FY21, thereby witnessing an increase of 86.4%.
• Long-term debt down at Rs 4 billion as compared to Rs 6 billion during FY21, a fall of 24.7%.
• Current assets rose 95% and stood at Rs 24 billion, while fixed assets fell 1% and stood at Rs 28 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 52 billion as against Rs 41 billion during FY21, thereby witnessing a growth of 28%.

GHCL Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	24,728	30,801	24.6
Current Liabilities	Rs m	7,596	14,162	86.4
Long-term Debt	Rs m	5,638	4,246	-24.7
Total Liabilities	Rs m	40,849	52,215	27.8
Current assets	Rs m	12,277	23,974	95.3
Fixed Assets	Rs m	28,572	28,241	-1.2
Total Assets	Rs m	40,849	52,215	27.8

GHCL Cash Flow Statement Analysis

• GHCL's cash flow from operating activities (CFO) during FY22 stood at Rs 6 billion, an improvement of 3.6% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -3 billion, an improvement of 209.3% on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -981 million, an improvement of 83% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 2 billion from the Rs -568 million net cash flows seen during FY21.

GHCL Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	6,210	6,434	3.6%
Cash Flow from Investing Activities	Rs m	-1,088	-3,366	-
Cash Flow from Financing Activities	Rs m	-5,690	-981	-
Net Cash Flow	Rs m	-568	2,088	-

Current Valuations for GHCL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 62.7, an improvement from the EPS of Rs 32.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 637.8, stands at 9.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.0 times, while the price to sales ratio stands at 1.6 times.
• The company's price to cash flow (P/CF) ratio stood at 5.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	262.2	396.3
TTM Earnings per share	Rs	32.3	62.7
Diluted earnings per share	Rs	32.1	62.6
Price to Cash Flow	x	5.3	5.3
TTM P/E ratio	x	7.2	9.6
Price / Book Value ratio	x	0.7	1.2
Market Cap	Rs m	16,473	37,821
Dividends per share (Unadj.)	Rs	5.5	15.0

Ratio Analysis for GHCL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.7x during FY22, from 1.6x during FY21. 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 13.8x during FY22, from 6.6x during FY21. 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 19.4% during FY22, from 12.4% during FY22. 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 24.9% during FY22, from 16.2% during FY21. 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 12.7% during FY22, from 9.3% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	1.6	1.7
Debtors’ Days	Days	3	2
Interest coverage	x	6.6	13.8
Debt to equity ratio	x	0.2	0.1
Return on assets	%	9.3	12.7
Return on equity	%	12.4	19.4
Return on capital employed	%	16.2	24.9

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

GHCL Share Price Performance

Over the last one year, GHCL share price has moved up from Rs 275.7 to Rs 637.8, registering a gain of Rs 362.1 or around 131.4%.

Overall, the S&P BSE SENSEX is up 1.1% over the year.

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

Read: Latest Annual Report Analysis of GHCL