GRASIM 2022-23 Annual Report Analysis

Tue, 1 Aug

GRASIM has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

GRASIM Income Statement Analysis

• Operating income during the year rose 22.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 4.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 18.5% in FY23 as against 21.7% in FY22.
• Depreciation charges increased by 9.4% and finance costs increased by 26.5% YoY, respectively.
• Other income grew by 339.8% YoY.
• Net profit for the year grew by 3.6% YoY.
• Net profit margins during the year declined from 11.2% in FY22 to 9.4% in FY23.

GRASIM Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	957,011	1,176,271	22.9%
Other income	Rs m	8,213	36,121	339.8%
Total Revenues	Rs m	965,225	1,212,391	25.6%
Gross profit	Rs m	207,426	217,100	4.7%
Depreciation	Rs m	41,611	45,516	9.4%
Interest	Rs m	47,760	60,437	26.5%
Profit before tax	Rs m	126,269	147,267	16.6%
Tax	Rs m	19,363	36,485	88.4%
Profit after tax	Rs m	106,906	110,782	3.6%
Gross profit margin	%	21.7	18.5
Effective tax rate	%	15.3	24.8
Net profit margin	%	11.2	9.4

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GRASIM Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 695 billion as compared to Rs 579 billion in FY22, thereby witnessing an increase of 20.1%.
• Long-term debt stood at Rs 667 billion as compared to Rs 465 billion during FY22, a growth of 43.3%.
• Current assets rose 19% and stood at Rs 675 billion, while fixed assets rose 16% and stood at Rs 2,693 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 3,368 billion as against Rs 2,891 billion during FY22, thereby witnessing a growth of 16%.

GRASIM Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	753,964	783,314	3.9
Current Liabilities	Rs m	578,845	695,330	20.1
Long-term Debt	Rs m	465,460	667,125	43.3
Total Liabilities	Rs m	2,891,488	3,368,228	16.5
Current assets	Rs m	567,582	675,043	18.9
Fixed Assets	Rs m	2,323,811	2,693,004	15.9
Total Assets	Rs m	2,891,488	3,368,228	16.5

GRASIM Cash Flow Statement Analysis

• GRASIM's cash flow from operating activities (CFO) during FY23 stood at Rs -127 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -137 billion, an improvement of 286.3% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 265 billion, an improvement of 493% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 719 million from the Rs -32 billion net cash flows seen during FY22.

GRASIM Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	70,377	-126,851	-
Cash Flow from Investing Activities	Rs m	-35,432	-136,867	-
Cash Flow from Financing Activities	Rs m	-67,331	264,691	-
Net Cash Flow	Rs m	-32,391	719	-

Current Valuations for GRASIM

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 168.3, an improvement from the EPS of Rs 162.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,836.1, stands at 11.1 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 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 6.6 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	1,453.8	1,786.5
TTM Earnings per share	Rs	162.4	168.3
Diluted earnings per share	Rs	162.4	168.3
Price to Cash Flow	x	7.4	6.6
TTM P/E ratio	x	10.6	11.1
Price / Book Value ratio	x	1.4	1.3
Market Cap	Rs m	1,053,717	1,025,903
Dividends per share (Unadj.)	Rs	10.0	10.0

Ratio Analysis for GRASIM

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.0x during FY23, from 1.0x during FY22. 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 3.4x during FY23, from 3.6x during FY22. 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 14.1% during FY23, from 14.2% during FY23. 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 14.3% during FY23, from 14.3% during FY22. 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 5.1% during FY23, from 5.3% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	1.0	1.0
Debtors’ Days	Days	2	2
Interest coverage	x	3.6	3.4
Debt to equity ratio	x	0.6	0.9
Return on assets	%	5.3	5.1
Return on equity	%	14.2	14.1
Return on capital employed	%	14.3	14.3

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 1,568.0 to Rs 1,836.1, registering a gain of Rs 268.1 or around 17.1%.

Overall, the S&P BSE SENSEX is up 16.9% over the year.

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