EMAMI 2020-21 Annual Report Analysis

Wed, 31 Mar

EMAMI 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.

EMAMI Income Statement Analysis

• Operating income during the year rose 8.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 29.9% YoY during the fiscal. Operating profit margins witnessed a fall and down at 30.7% in FY21 as against 25.6% in FY20.
• Depreciation charges increased by 9.1% and finance costs decreased by 36.8% YoY, respectively.
• Other income grew by 23.1% YoY.
• Net profit for the year grew by 48.8% YoY.
• Net profit margins during the year grew from 11.6% in FY20 to 15.9% in FY21.

EMAMI Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	26,549	28,805	8.5%
Other income	Rs m	571	703	23.1%
Total Revenues	Rs m	27,119	29,508	8.8%
Gross profit	Rs m	6,799	8,831	29.9%
Depreciation	Rs m	3,363	3,670	9.1%
Interest	Rs m	210	133	-36.8%
Profit before tax	Rs m	3,796	5,731	51.0%
Tax	Rs m	713	1,142	60.3%
Profit after tax	Rs m	3,083	4,589	48.8%
Gross profit margin	%	25.6	30.7
Effective tax rate	%	18.8	19.9
Net profit margin	%	11.6	15.9

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EMAMI Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 7 billion as compared to Rs 8 billion in FY20, thereby witnessing an decrease of -11.6%.
• Current assets rose 9% and stood at Rs 11 billion, while fixed assets fell 15% and stood at Rs 14 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 25 billion as against Rs 27 billion during FY20, thereby witnessing a fall of 6%.

EMAMI Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	18,238	17,627	-3.4
Current Liabilities	Rs m	7,920	7,002	-11.6
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	26,785	25,197	-5.9
Current assets	Rs m	10,333	11,268	9.0
Fixed Assets	Rs m	16,452	13,929	-15.3
Total Assets	Rs m	26,785	25,197	-5.9

EMAMI Cash Flow Statement Analysis

• EMAMI's cash flow from operating activities (CFO) during FY21 stood at Rs 9 billion, an improvement of 73.6% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -2 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -7 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 90 million from the Rs -1 billion net cash flows seen during FY20.

EMAMI 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	5,307	9,215	73.6%
Cash Flow from Investing Activities	Rs m	-2,277	-2,269	-
Cash Flow from Financing Activities	Rs m	-4,054	-6,882	-
Net Cash Flow	Rs m	-1,056	90	-

Current Valuations for EMAMI

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 10.3, an improvement from the EPS of Rs 6.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 487.7, stands at 46.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 12.2 times, while the price to sales ratio stands at 7.5 times.
• The company's price to cash flow (P/CF) ratio stood at 18.3 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	58.6	64.8
TTM Earnings per share	Rs	6.8	10.3
Diluted earnings per share	Rs	7.0	10.4
Price to Cash Flow	x	11.6	18.3
TTM P/E ratio	x	24.3	46.9
Price / Book Value ratio	x	6.9	8.6
Market Cap	Rs m	126,268	151,501
Dividends per share (Unadj.)	Rs	4.0	8.0

Ratio Analysis for EMAMI

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.6x during FY21, from 1.3x 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 44.2x during FY21, from 19.1x 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 improved and stood at 26.0% during FY21, from 16.9% 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 33.3% during FY21, from 22.0% 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 improved and stood at 18.7% during FY21, from 12.3% 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	1.3	1.6
Debtors’ Days	Days	423	294
Interest coverage	x	19.1	44.2
Debt to equity ratio	x	0.0	0.0
Return on assets	%	12.3	18.7
Return on equity	%	16.9	26.0
Return on capital employed	%	22.0	33.3

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

EMAMI Share Price Performance

Over the last one year, EMAMI share price has moved up from Rs 170.0 to Rs 487.7, registering a gain of Rs 317.7 or around 186.9%.

Meanwhile, the S&P BSE FMCG Index is trading at Rs 12,875.4 (up 1.1%). Over the last one year it has moved up from 10,254.9 to 12,875.4, a gain of 2,621 points (up 25.6%).

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

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

Read: Latest Annual Report Analysis of EMAMI