KANCO TEA & INDUSTRIES 2021-22 Annual Report Analysis

Mon, 26 Sep

KANCO TEA & INDUSTRIES 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.

KANCO TEA & INDUSTRIES Income Statement Analysis

• Operating income during the year rose 2.1% on a year-on-year (YoY) basis.
• The company's operating profit was by NA YoY during the fiscal. Operating profit margins witnessed a growth and stood at 1.7% in FY22 as against 18.3% in FY21.
• Depreciation charges increased by 6.9% and finance costs decreased by 23.3% YoY, respectively.
• Other income grew by 636.4% YoY.
• Net profit for the year declined by 64.1% YoY.
• Net profit margins during the year declined from 13.0% in FY21 to 4.6% in FY22.

KANCO TEA & INDUSTRIES Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	817	835	2.1%
Other income	Rs m	16	114	636.4%
Total Revenues	Rs m	833	949	13.9%
Gross profit	Rs m	150	-14	NA
Depreciation	Rs m	23	25	6.9%
Interest	Rs m	43	33	-23.3%
Profit before tax	Rs m	100	43	-57.2%
Tax	Rs m	-6	5	NA
Profit after tax	Rs m	106	38	-64.1%
Gross profit margin	%	18.3	-1.7
Effective tax rate	%	-6.1	10.9
Net profit margin	%	13.0	4.6

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KANCO TEA & INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during FY22 down at Rs 258 million as compared to Rs 261 million in FY21, thereby witnessing an decrease of -1.0%.
• Long-term debt down at Rs 145 million as compared to Rs 234 million during FY21, a fall of 37.8%.
• Current assets fell 29% and stood at Rs 236 million, while fixed assets rose 10% and stood at Rs 924 million in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 1 billion as against Rs 1 billion during FY21, thereby witnessing a fall of 1%.

KANCO TEA & INDUSTRIES Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	619	700	13.2
Current Liabilities	Rs m	261	258	-1.0
Long-term Debt	Rs m	234	145	-37.8
Total Liabilities	Rs m	1,173	1,161	-1.1
Current assets	Rs m	331	236	-28.6
Fixed Assets	Rs m	842	924	9.7
Total Assets	Rs m	1,173	1,161	-1.1

KANCO TEA & INDUSTRIES Cash Flow Statement Analysis

• KANCO TEA & INDUSTRIES 's cash flow from operating activities (CFO) during FY22 stood at Rs 183 million, an improvement of 18.0% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -122 million, an improvement of 171.4% on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -82 million, an improvement of 17% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -21 million from the Rs 11 million net cash flows seen during FY21.

KANCO TEA & INDUSTRIES 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	155	183	18.0%
Cash Flow from Investing Activities	Rs m	-45	-122	-
Cash Flow from Financing Activities	Rs m	-99	-82	-
Net Cash Flow	Rs m	11	-21	-

Current Valuations for KANCO TEA & INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 7.4, an decline from the EPS of Rs 20.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 78.4, stands at 11.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.6 times, while the price to sales ratio stands at 0.5 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-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	159.6	163.0
TTM Earnings per share	Rs	20.7	7.4
Diluted earnings per share	Rs	20.7	7.4
Price to Cash Flow	x	1.9	5.8
TTM P/E ratio	x	2.3	11.0
Price / Book Value ratio	x	0.4	0.5
Market Cap	Rs m	221	361
Dividends per share (Unadj.)	Rs	1.0	1.0

Ratio Analysis for KANCO TEA & INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.9x during FY22, from 1.3x 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 deteriorated and stood at 2.3x during FY22, from 3.3x 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 declined and down at 5.4% during FY22, from 17.1% 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 declined and down at 8.9% during FY22, from 16.7% 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 declined and down at 6.1% during FY22, from 12.7% 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	1.3	0.9
Debtors’ Days	Days	7,142	3,442
Interest coverage	x	3.3	2.3
Debt to equity ratio	x	0.4	0.2
Return on assets	%	12.7	6.1
Return on equity	%	17.1	5.4
Return on capital employed	%	16.7	8.9

To see how KANCO TEA & INDUSTRIES has performed over the last 5 years, please visit here.

KANCO TEA & INDUSTRIES Share Price Performance

Over the last one year, KANCO TEA & INDUSTRIES share price has moved up from Rs 64.6 to Rs 78.4, registering a gain of Rs 13.8 or around 21.3%.

Overall, the S&P BSE SENSEX is down 2.9% over the year.

(To know more, check out historical annual results for KANCO TEA & INDUSTRIES and quarterly results for KANCO TEA & INDUSTRIES )

Read: Latest Annual Report Analysis of KANCO TEA & INDUSTRIES