GRASIM 2020-21 Annual Report Analysis

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GRASIM 2020-21 Annual Report Analysis
Wed, 20 Oct

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 1.4% 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 24.3% in FY21 as against 21.2% 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 7.9% in FY20 to 8.8% in FY21.

GRASIM Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 754,911 765,606 1.4%
Other income Rs m 9,688 10,520 8.6%
Total Revenues Rs m 764,599 776,126 1.5%
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 % 21.2 24.3
Effective tax rate % -0.2 31.2
Net profit margin % 7.9 8.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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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 1,692.8, stands at 13.9 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.0 times, while the price to sales ratio stands at 0.8 times.
  • The company's price to cash flow (P/CF) ratio stood at 10.3 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 1,147.6 1,163.5
TTM Earnings per share Rs 92.4 103.3
Diluted earnings per share Rs 92.3 103.3
Price to Cash Flow x 11.0 10.3
TTM P/E ratio x 13.9 13.9
Price / Book Value ratio x 0.8 1.0
Market Cap Rs m 1,113,522 1,113,938
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 776.8 to Rs 1,692.8, registering a gain of Rs 916.1 or around 117.9%.

Overall, the S&P BSE SENSEX is up 51.5% over the year.

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

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Related Views on News

GRASIM Announces Quarterly Results (4QFY21); Net Profit Up 12.4% (Quarterly Result Update)

Jul 8, 2021 | Updated on Jul 8, 2021

For the quarter ended March 2021, GRASIM has posted a net profit of Rs 25 bn (up 12.4% YoY). Sales on the other hand came in at Rs 244 bn (up 26.1% YoY). Read on for a complete analysis of GRASIM's quarterly results.

GRASIM Announces Quarterly Results (1QFY21); Net Profit Down 65.6% (Quarterly Result Update)

Sep 10, 2020 | Updated on Sep 10, 2020

For the quarter ended June 2020, GRASIM has posted a net profit of Rs 6 bn (down 65.6% YoY). Sales on the other hand came in at Rs 136 bn (down 27.8% YoY). Read on for a complete analysis of GRASIM's quarterly results.

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