GRASIM 2021-22 Annual Report Analysis

Tue, 9 Aug

GRASIM 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.

GRASIM Income Statement Analysis

• Operating income during the year rose 25.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 11.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 21.3% in FY22 as against 23.9% in FY21.
• Depreciation charges increased by 3.2% and finance costs decreased by 16.7% YoY, respectively.
• Other income declined by 22.4% YoY.
• Net profit for the year grew by 57.2% YoY.
• Net profit margins during the year grew from 8.6% in FY21 to 10.8% in FY22.

GRASIM Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	764,043	957,011	25.3%
Other income	Rs m	10,578	8,213	-22.4%
Total Revenues	Rs m	774,621	965,225	24.6%
Gross profit	Rs m	182,936	203,623	11.3%
Depreciation	Rs m	40,334	41,611	3.2%
Interest	Rs m	57,358	47,760	-16.7%
Profit before tax	Rs m	95,822	122,465	27.8%
Tax	Rs m	30,222	19,363	-35.9%
Profit after tax	Rs m	65,600	103,102	57.2%
Gross profit margin	%	23.9	21.3
Effective tax rate	%	31.5	15.8
Net profit margin	%	8.6	10.8

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GRASIM Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 579 billion as compared to Rs 525 billion in FY21, thereby witnessing an increase of 10.2%.
• Long-term debt down at Rs 465 billion as compared to Rs 525 billion during FY21, a fall of 11.3%.
• Current assets fell 6% and stood at Rs 568 billion, while fixed assets rose 12% and stood at Rs 2,324 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 2,891 billion as against Rs 2,673 billion during FY21, thereby witnessing a growth of 8%.

GRASIM Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	652,196	753,964	15.6
Current Liabilities	Rs m	525,078	578,845	10.2
Long-term Debt	Rs m	524,883	465,460	-11.3
Total Liabilities	Rs m	2,673,488	2,891,488	8.2
Current assets	Rs m	602,752	567,677	-5.8
Fixed Assets	Rs m	2,070,735	2,323,811	12.2
Total Assets	Rs m	2,673,488	2,891,488	8.2

GRASIM Cash Flow Statement Analysis

• GRASIM's cash flow from operating activities (CFO) during FY22 stood at Rs 70 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -35 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -67 billion, an improvement of 16% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -32 billion from the Rs -22 billion net cash flows seen during FY21.

GRASIM 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	150,751	70,377	-53.3%
Cash Flow from Investing Activities	Rs m	-92,295	-35,432	-
Cash Flow from Financing Activities	Rs m	-80,035	-67,331	-
Net Cash Flow	Rs m	-21,575	-32,391	-

Current Valuations for GRASIM

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 156.6, an improvement from the EPS of Rs 99.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,596.9, stands at 10.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.4 times, while the price to sales ratio stands at 1.1 times.
• The company's price to cash flow (P/CF) ratio stood at 7.3 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	1,161.1	1,453.8
TTM Earnings per share	Rs	99.7	156.6
Diluted earnings per share	Rs	99.6	156.6
Price to Cash Flow	x	9.0	7.3
TTM P/E ratio	x	15.1	10.2
Price / Book Value ratio	x	1.0	1.4
Market Cap	Rs m	627,610	1,053,717
Dividends per share (Unadj.)	Rs	9.0	10.0

Ratio Analysis for GRASIM

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.0x during FY22, from 1.1x 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 3.6x during FY22, from 2.7x 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 13.7% during FY22, from 10.1% 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 14.0% during FY22, from 13.0% 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 5.2% during FY22, from 4.6% 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	1.1	1.0
Debtors’ Days	Days	2	2
Interest coverage	x	2.7	3.6
Debt to equity ratio	x	0.8	0.6
Return on assets	%	4.6	5.2
Return on equity	%	10.1	13.7
Return on capital employed	%	13.0	14.0

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 1,512.8 to Rs 1,596.9, registering a gain of Rs 84.1 or around 5.6%.

Overall, the S&P BSE SENSEX is up 8.0% over the year.

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

Read: Latest Annual Report Analysis of GRASIM