GRASIM 2018-19 Annual Report Analysis

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GRASIM 2018-19 Annual Report Analysis
Tue, 30 Jul

GRASIM 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.

GRASIM Income Statement Analysis

  • Operating income during the year rose 30.6% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 19.9% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 16.5% in FY19 as against 17.9% in FY18.
  • Depreciation charges increased by 19.7% and finance costs increased by 30.5% YoY, respectively.
  • Other income declined by 6.9% YoY.
  • Net profit for the year declined by 24.7% YoY.
  • Net profit margins during the year declined from 6.5% in FY18 to 3.8% in FY19.

GRASIM Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 558,935 729,706 30.6%
Other income Rs m 8,607 8,014 -6.9%
Total Revenues Rs m 567,542 737,720 30.0%
Gross profit Rs m 100,227 120,185 19.9%
Depreciation Rs m 27,244 32,605 19.7%
Interest Rs m 13,640 17,806 30.5%
Profit before tax Rs m 67,950 77,788 14.5%
Tax Rs m 19,471 24,574 26.2%
Profit after tax Rs m 36,876 27,760 -24.7%
Gross profit margin % 17.9 16.5
Effective tax rate % 28.7 31.6
Net profit margin % 6.5 3.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



GRASIM Balance Sheet Analysis

  • The company's current liabilities during FY19 stood at Rs 461 billion as compared to Rs 423 billion in FY18, thereby witnessing an increase of 9.0%.
  • Long-term debt stood at Rs 556 billion as compared to Rs 408 billion during FY18, a growth of 36.3%.
  • Current assets rose 21% and stood at Rs 487 billion, while fixed assets rose 10% and stood at Rs 524 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 2,292 billion as against Rs 2,079 billion during FY18, thereby witnessing a growth of 10%.

GRASIM Balance Sheet as on March 2019

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 573,619 557,732 -2.8
 
Current Liabilities Rs m 422,919 461,189 9.0
Long-term Debt Rs m 407,934 555,869 36.3
Total Liabilities Rs m 2,079,201 2,292,027 10.2
 
Current assets Rs m 403,092 487,118 20.8
Fixed Assets Rs m 476,909 523,516 9.8
Total Assets Rs m 2,079,201 2,292,027 10.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



GRASIM Cash Flow Statement Analysis

  • GRASIM's cash flow from operating activities (CFO) during FY19 stood at Rs -25 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs -22 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY19 stood at Rs 49 billion, an improvement of 41% on a YoY basis.
  • Overall, net cash flows for the company during FY19 stood at Rs 3 billion from the Rs 9 billion net cash flows seen during FY18.

GRASIM 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 -41,399 -24,548 -
Cash Flow from Investing Activities Rs m 5,098 -21,870 -
Cash Flow from Financing Activities Rs m 34,491 48,702 41.2%
Net Cash Flow Rs m 8,555 2,746 -67.9%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for GRASIM

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 42.2, an decline from the EPS of Rs 56.1 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 793.8, stands at 14.9 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.1 times, while the price to sales ratio stands at 0.8 times.
  • The company's price to cash flow (P/CF) ratio stood at 6.2 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 850.3 1,109.7
TTM Earnings per share Rs 56.1 42.2
Diluted earnings per share Rs 79.0 59.5
Price to Cash Flow x 7.3 6.2
TTM P/E ratio x 21.0 14.9
Price / Book Value ratio x 1.3 1.1
Market Cap Rs m 521,820 370,530
Dividends per share (Unadj.) Rs 6.2 7.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for GRASIM

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 1.1x during FY19, from 1.0x 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 5.4x during FY19, from 6.0x 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 declined and down at 5.0% during FY19, from 6.4% 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 6.3% during FY19, from 7.1% 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 declined and down at 2.0% during FY19, from 2.4% 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 1.0 1.1
Debtors’ Days Days 34 32
Interest coverage x 6.0 5.4
Debt to equity ratio x 0.7 1.0
Return on assets % 2.4 2.0
Return on equity % 6.4 5.0
Return on capital employed % 7.1 6.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

GRASIM Share Price Performance

Over the last one year, GRASIM share price has moved down from Rs 1,021.3 to Rs 793.8, registering a loss of Rs 227.5 or around 22.3%.

Overall, the S&P BSE SENSEX is up 0.9% over the year.

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

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