MARICO 2020-21 Annual Report Analysis

Wed, 31 Mar

MARICO 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.

MARICO Income Statement Analysis

• Operating income during the year rose 10.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 11.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 19.9% in FY21 as against 19.6% in FY20.
• Depreciation charges decreased by 0.7% and finance costs decreased by 32.0% YoY, respectively.
• Other income declined by 23.6% YoY.
• Net profit for the year grew by 15.1% YoY.
• Net profit margins during the year grew from 14.3% in FY20 to 14.9% in FY21.

MARICO Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	73,150	80,480	10.0%
Other income	Rs m	1,270	970	-23.6%
Total Revenues	Rs m	74,420	81,450	9.4%
Gross profit	Rs m	14,370	16,010	11.4%
Depreciation	Rs m	1,400	1,390	-0.7%
Interest	Rs m	500	340	-32.0%
Profit before tax	Rs m	13,740	15,250	11.0%
Tax	Rs m	3,310	3,240	-2.1%
Profit after tax	Rs m	10,430	12,010	15.1%
Gross profit margin	%	19.6	19.9
Effective tax rate	%	24.1	21.2
Net profit margin	%	14.3	14.9

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MARICO Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 20 billion as compared to Rs 18 billion in FY20, thereby witnessing an increase of 14.8%.
• Long-term debt down at Rs 80 million as compared to Rs 100 million during FY20, a fall of 20.0%.
• Current assets rose 6% and stood at Rs 33 billion, while fixed assets rose 20% and stood at Rs 20 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 53 billion as against Rs 48 billion during FY20, thereby witnessing a growth of 11%.

MARICO Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	29,980	32,110	7.1
Current Liabilities	Rs m	17,530	20,130	14.8
Long-term Debt	Rs m	100	80	-20.0
Total Liabilities	Rs m	48,110	53,240	10.7
Current assets	Rs m	31,490	33,360	5.9
Fixed Assets	Rs m	16,620	19,880	19.6
Total Assets	Rs m	48,110	53,240	10.7

MARICO Cash Flow Statement Analysis

• MARICO's cash flow from operating activities (CFO) during FY21 stood at Rs 21 billion, an improvement of 70.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -9 billion, an improvement of 2,305.1% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -11 billion, an improvement of 2% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 160 million from the Rs 450 million net cash flows seen during FY20.

MARICO 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	12,140	20,680	70.3%
Cash Flow from Investing Activities	Rs m	-390	-9,380	-
Cash Flow from Financing Activities	Rs m	-11,470	-11,190	-
Net Cash Flow	Rs m	450	160	-64.4%

Current Valuations for MARICO

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 9.3, an improvement from the EPS of Rs 8.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 411.5, stands at 44.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 16.6 times, while the price to sales ratio stands at 6.6 times.
• The company's price to cash flow (P/CF) ratio stood at 33.6 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	56.7	62.3
TTM Earnings per share	Rs	8.1	9.3
Diluted earnings per share	Rs	8.1	9.3
Price to Cash Flow	x	30.0	33.6
TTM P/E ratio	x	34.1	44.3
Price / Book Value ratio	x	13.7	14.0
Market Cap	Rs m	411,512	449,777
Dividends per share (Unadj.)	Rs	6.8	7.5

Ratio Analysis for MARICO

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.7x during FY21, from 1.8x 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 45.9x during FY21, from 28.5x 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 37.4% during FY21, from 34.8% 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 48.4% during FY21, from 47.3% 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 23.2% during FY21, from 22.7% 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	1.8	1.7
Debtors’ Days	Days	3	2
Interest coverage	x	28.5	45.9
Debt to equity ratio	x	0.0	0.0
Return on assets	%	22.7	23.2
Return on equity	%	34.8	37.4
Return on capital employed	%	47.3	48.4

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

MARICO Share Price Performance

Over the last one year, MARICO share price has moved up from Rs 274.9 to Rs 411.5, registering a gain of Rs 136.7 or around 49.7%.

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 MARICO and quarterly results for MARICO)

Read: Latest Annual Report Analysis of MARICO