KCP 2021-22 Annual Report Analysis

Wed, 7 Sep

KCP 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.

KCP Income Statement Analysis

• Operating income during the year rose 24.6% on a year-on-year (YoY) basis.
• The company's operating profit increased by 1.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 17.9% in FY22 as against 22.0% in FY21.
• Depreciation charges decreased by 5.1% and finance costs decreased by 32.2% YoY, respectively.
• Other income grew by 43.8% YoY.
• Net profit for the year grew by 26.7% YoY.
• Net profit margins during the year grew from 11.2% in FY21 to 11.3% in FY22.

KCP Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	16,925	21,082	24.6%
Other income	Rs m	268	386	43.8%
Total Revenues	Rs m	17,194	21,468	24.9%
Gross profit	Rs m	3,718	3,775	1.5%
Depreciation	Rs m	917	871	-5.1%
Interest	Rs m	547	371	-32.2%
Profit before tax	Rs m	2,522	2,919	15.7%
Tax	Rs m	634	528	-16.8%
Profit after tax	Rs m	1,888	2,391	26.7%
Gross profit margin	%	22.0	17.9
Effective tax rate	%	25.2	18.1
Net profit margin	%	11.2	11.3

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KCP Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 7 billion as compared to Rs 6 billion in FY21, thereby witnessing an increase of 17.9%.
• Long-term debt down at Rs 2 billion as compared to Rs 2 billion during FY21, a fall of 27.8%.
• Current assets rose 28% and stood at Rs 13 billion, while fixed assets rose 0% and stood at Rs 12 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 24 billion as against Rs 22 billion during FY21, thereby witnessing a growth of 13%.

KCP Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	9,959	11,773	18.2
Current Liabilities	Rs m	5,780	6,816	17.9
Long-term Debt	Rs m	2,478	1,789	-27.8
Total Liabilities	Rs m	21,521	24,374	13.3
Current assets	Rs m	9,990	12,793	28.1
Fixed Assets	Rs m	11,531	11,581	0.4
Total Assets	Rs m	21,521	24,374	13.3

KCP Cash Flow Statement Analysis

• KCP's cash flow from operating activities (CFO) during FY22 stood at Rs 1 billion, an improvement of 6.6% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -264 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -1 billion, an improvement of 36% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 7 million from the Rs -166 million net cash flows seen during FY21.

KCP 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	1,301	1,386	6.6%
Cash Flow from Investing Activities	Rs m	289	-264	-
Cash Flow from Financing Activities	Rs m	-1,755	-1,115	-
Net Cash Flow	Rs m	-166	7	-

Current Valuations for KCP

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 18.5, an improvement from the EPS of Rs 14.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 118.8, stands at 8.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.3 times, while the price to sales ratio stands at 0.7 times.
• The company's price to cash flow (P/CF) ratio stood at 4.9 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	131.3	163.5
TTM Earnings per share	Rs	14.6	18.5
Diluted earnings per share	Rs	14.6	18.5
Price to Cash Flow	x	3.9	4.9
TTM P/E ratio	x	5.7	8.0
Price / Book Value ratio	x	0.8	1.4
Market Cap	Rs m	8,096	16,125
Dividends per share (Unadj.)	Rs	2.0	1.0

Ratio Analysis for KCP

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.9x during FY22, from 1.7x 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 8.9x during FY22, from 5.6x 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 20.3% during FY22, from 19.0% 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 24.3% during FY22, from 24.7% 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 improved and stood at 11.3% during FY22, from 11.3% 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	1.7	1.9
Debtors’ Days	Days	249	197
Interest coverage	x	5.6	8.9
Debt to equity ratio	x	0.2	0.2
Return on assets	%	11.3	11.3
Return on equity	%	19.0	20.3
Return on capital employed	%	24.7	24.3

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

KCP Share Price Performance

Over the last one year, KCP share price has moved down from Rs 138.7 to Rs 118.8, registering a loss of Rs 19.9 or around 14.3%.

Overall, the S&P BSE SENSEX is up 1.4% over the year.

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

Read: Latest Annual Report Analysis of KCP