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GRASIM 2020-21 Annual Report Analysis
Wed, 31 Mar

GRASIM has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

GRASIM Income Statement Analysis

  • Operating income during the year rose 0.7% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 16.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 23.6% in FY21 as against 20.5% in FY20.
  • Depreciation charges increased by 0.7% and finance costs decreased by 16.9% YoY, respectively.
  • Other income grew by 8.6% YoY.
  • Net profit for the year grew by 11.9% YoY.
  • Net profit margins during the year grew from 7.8% in FY20 to 8.6% in FY21.

GRASIM Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 781,015 786,730 0.7%
Other income Rs m 9,688 10,520 8.6%
Total Revenues Rs m 790,703 797,250 0.8%
Gross profit Rs m 159,882 185,907 16.3%
Depreciation Rs m 40,042 40,334 0.7%
Interest Rs m 68,903 57,235 -16.9%
Profit before tax Rs m 60,624 98,858 63.1%
Tax Rs m -139 30,883 -22,286.0%
Profit after tax Rs m 60,764 67,975 11.9%
Gross profit margin % 20.5 23.6
Effective tax rate % -0.2 31.2
Net profit margin % 7.8 8.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Read Now: We're Bullish on 2 Non-Nifty Stocks

GRASIM Balance Sheet Analysis

  • The company's current liabilities during FY21 stood at Rs 520 billion as compared to Rs 466 billion in FY20, thereby witnessing an increase of 11.6%.
  • Long-term debt down at Rs 525 billion as compared to Rs 587 billion during FY20, a fall of 10.6%.
  • Current assets rose 15% and stood at Rs 598 billion, while fixed assets rose 8% and stood at Rs 2,071 billion in FY21.
  • Overall, the total assets and liabilities for FY21 stood at Rs 2,669 billion as against Rs 2,442 billion during FY20, thereby witnessing a growth of 9%.

GRASIM Balance Sheet as on March 2021

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Networth Rs m 563,689 652,196 15.7
 
Current Liabilities Rs m 466,190 520,099 11.6
Long-term Debt Rs m 587,378 524,883 -10.6
Total Liabilities Rs m 2,441,814 2,668,509 9.3
 
Current assets Rs m 520,529 597,774 14.8
Fixed Assets Rs m 1,921,285 2,070,735 7.8
Total Assets Rs m 2,441,814 2,668,509 9.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



GRASIM Cash Flow Statement Analysis

  • GRASIM's cash flow from operating activities (CFO) during FY21 stood at Rs 168 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY21 stood at Rs -92 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY21 stood at Rs -80 billion on a YoY basis.
  • Overall, net cash flows for the company during FY21 stood at Rs -4 billion from the Rs 18 billion net cash flows seen during FY20.

GRASIM Cash Flow Statement 2020-21

Particulars No. of months 12 12 % Change
Year Ending Mar-20 Mar-21
Cash Flow from Operating Activities Rs m 168,034 167,838 -0.1%
Cash Flow from Investing Activities Rs m -115,476 -92,169 -
Cash Flow from Financing Activities Rs m -34,179 -80,135 -
Net Cash Flow Rs m 18,383 -4,463 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for GRASIM

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 103.3, an improvement from the EPS of Rs 92.4 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 1,452.1, stands at 15.1 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.5 times, while the price to sales ratio stands at 1.2 times.
  • The company's price to cash flow (P/CF) ratio stood at 5.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-20* 12 Mar-21*
Sales per share (Unadj.) Rs 1,187.3 1,195.6
TTM Earnings per share Rs 92.4 103.3
Diluted earnings per share Rs 92.3 103.3
Price to Cash Flow x 3.1 5.8
TTM P/E ratio x 5.2 15.1
Price / Book Value ratio x 0.8 1.0
Market Cap Rs m 440,248 627,610
Dividends per share (Unadj.) Rs 4.0 9.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for GRASIM

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 1.1x during FY21, from 1.1x during FY20. 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 FY21, from 1.9x during FY20. 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 10.4% during FY21, from 10.8% during FY21. 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 13.3% during FY21, from 11.3% during FY20. 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 4.7% during FY21, from 5.3% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-20* 12 Mar-21*
Current ratio x 1.1 1.1
Debtors’ Days Days 3 2
Interest coverage x 1.9 2.7
Debt to equity ratio x 1.0 0.8
Return on assets % 5.3 4.7
Return on equity % 10.8 10.4
Return on capital employed % 11.3 13.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, 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 up from Rs 475.4 to Rs 1,452.1, registering a gain of Rs 976.7 or around 205.4%.

Overall, the S&P BSE SENSEX is up 74.1% over the year.

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

Annual Report FAQs

What is the current share price of GRASIM?

GRASIM currently trades at Rs 2,288.5 per share. You can check out the latest share price performance of GRASIM here...

What was the revenue of GRASIM in FY21? How does it compare to earlier years?

The revenues of GRASIM stood at Rs 797,250 m in FY21, which was up 0.8% compared to Rs 790,703 m reported in FY20.

GRASIM's revenue has grown from Rs 328,374 m in FY17 to Rs 797,250 m in FY21.

Over the past 5 years, the revenue of GRASIM has grown at a CAGR of 24.8%.

What was the net profit of GRASIM in FY21? How does it compare to earlier years?

The net profit of GRASIM stood at Rs 67,975 m in FY21, which was up 11.9% compared to Rs 60,764 m reported in FY20.

This compares to a net profit of Rs 27,157 m in FY19 and a net profit of Rs 44,151 m in FY18.

Over the past 5 years, GRASIM net profit has grown at a CAGR of 13.4%.

What does the cash flow statement of GRASIM reveal?

The cash flow statement is the financial statement that presents the cash inflows and outflows of a company during a given period of time.

This statement is one of the most useful tools for judging a company's liquidity position. The ratios and parameters in this statement helps test a company's financial health.

The cash flow statement of GRASIM reveals:

  • Cash flow from operations decreased in FY21 and stood at Rs 167,838 m as compared to Rs 168,034 m in FY20.
  • Cash flow from investments increased in FY21 and stood at Rs -92,169 m as compared to Rs -115,476 m in FY20.
  • Cash flow from financial activity decreased in FY21 and stood at Rs -80,135 m as compared to Rs -34,179 m in FY20.

Here's the cash flow statement of GRASIM for the past 5 years.

(Rs m)FY17FY18FY19FY20FY21
From Operations72,878-41,399-16,586168,034167,838
From Investments-34,8775,098-22,710-115,476-92,169
From Financial Activity-37,98634,49141,580-34,179-80,135
Net Cashflow-1958,5552,87018,383-4,463

What does the Key Ratio analysis of GRASIM reveal?

Be it the company's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.

The ratio/financial analysis of GRASIM reveals:

  • Operating profit margins witnessed a fall and down at 23.6% in FY21 as against 20.5% in FY20.
  • Net profit margins grew from 7.8% in FY20 to 8.6% in FY21.
  • Debt to Equity ratio for FY21 stood at 0.8 as compared to 1.0 in FY20.

Here's the ratio/financial analysis of GRASIM for the past 5 years.

 FY17FY18FY19FY20FY21
Operating Profit Margin (%)23.221.718.120.523.6
Net Profit Margin (%)12.98.13.57.88.6
Debt to Equity Ratio (x)0.20.71.01.00.8

Read: Latest Annual Report Analysis of GRASIM

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