PIDILITE INDUSTRIES 2019-20 Annual Report Analysis

Tue, 31 Mar

PIDILITE INDUSTRIES has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

PIDILITE INDUSTRIES Income Statement Analysis

• Operating income during the year rose 3.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 12.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 20.8% in FY20 as against 19.1% in FY19.
• Depreciation charges increased by 28.0% and finance costs increased by 28.9% YoY, respectively.
• Other income grew by 1.9% YoY.
• Net profit for the year grew by 21.0% YoY.
• Net profit margins during the year grew from 13.1% in FY19 to 15.3% in FY20.

PIDILITE INDUSTRIES Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	70,780	72,945	3.1%
Other income	Rs m	1,466	1,494	1.9%
Total Revenues	Rs m	72,246	74,439	3.0%
Gross profit	Rs m	13,502	15,208	12.6%
Depreciation	Rs m	1,327	1,699	28.0%
Interest	Rs m	261	336	28.9%
Profit before tax	Rs m	13,380	14,667	9.6%
Tax	Rs m	4,132	3,477	-15.9%
Profit after tax	Rs m	9,248	11,190	21.0%
Gross profit margin	%	19.1	20.8
Effective tax rate	%	30.9	23.7
Net profit margin	%	13.1	15.3

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PIDILITE INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during FY20 stood at Rs 16 billion as compared to Rs 13 billion in FY19, thereby witnessing an increase of 24.1%.
• Long-term debt stood at Rs 251 million as compared to Rs 85 million during FY19, a growth of 195.3%.
• Current assets rose 5% and stood at Rs 38 billion, while fixed assets rose 19% and stood at Rs 28 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 65 billion as against Rs 59 billion during FY19, thereby witnessing a growth of 10%.

PIDILITE INDUSTRIES Balance Sheet as on March 2020

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Networth	Rs m	41,384	44,447	7.4
Current Liabilities	Rs m	13,007	16,147	24.1
Long-term Debt	Rs m	85	251	195.3
Total Liabilities	Rs m	59,038	65,227	10.5
Current assets	Rs m	35,820	37,610	5.0
Fixed Assets	Rs m	23,218	27,618	18.9
Total Assets	Rs m	59,038	65,227	10.5

PIDILITE INDUSTRIES Cash Flow Statement Analysis

• PIDILITE INDUSTRIES's cash flow from operating activities (CFO) during FY20 stood at Rs 13 billion, an improvement of 51.5% on a YoY basis.
• Cash flow from investing activities (CFI) during FY20 stood at Rs 1 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY20 stood at Rs -8 billion on a YoY basis.
• Overall, net cash flows for the company during FY20 stood at Rs 5 billion from the Rs -292 million net cash flows seen during FY19.

PIDILITE INDUSTRIES Cash Flow Statement 2019-20

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-19	Mar-20
Cash Flow from Operating Activities	Rs m	8,448	12,796	51.5%
Cash Flow from Investing Activities	Rs m	-5,131	1,029	-
Cash Flow from Financing Activities	Rs m	-3,606	-8,492	-
Net Cash Flow	Rs m	-292	5,334	-

Current Valuations for PIDILITE INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 22.0, an improvement from the EPS of Rs 18.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,356.7, stands at 61.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 15.5 times, while the price to sales ratio stands at 9.5 times.
• The company's price to cash flow (P/CF) ratio stood at 55.2 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Sales per share (Unadj.)	Rs	139.3	143.6
TTM Earnings per share	Rs	18.2	22.0
Diluted earnings per share	Rs	18.2	22.0
Price to Cash Flow	x	59.7	55.2
TTM P/E ratio	x	68.3	61.6
Price / Book Value ratio	x	13.2	16.0
Market Cap	Rs m	545,289	711,348
Dividends per share (Unadj.)	Rs	6.5	7.0

Ratio Analysis for PIDILITE INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.3x during FY20, from 2.8x during FY19. 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 44.7x during FY20, from 52.3x during FY19. 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 25.2% during FY20, from 22.3% during FY20. 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 33.6% during FY20, from 32.9% during FY19. 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 17.7% during FY20, from 16.1% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Current ratio	x	2.8	2.3
Debtors’ Days	Days	5	5
Interest coverage	x	52.3	44.7
Debt to equity ratio	x	0.0	0.0
Return on assets	%	16.1	17.7
Return on equity	%	22.3	25.2
Return on capital employed	%	32.9	33.6

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

PIDILITE INDUSTRIES Share Price Performance

Over the last one year, PIDILITE INDUSTRIES share price has moved up from Rs 1,242.4 to Rs 1,356.7, registering a gain of Rs 114.3 or around 9.2%.

Overall, the S&P BSE SENSEX is down 24.2% over the year.

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

Read: Latest Annual Report Analysis of PIDILITE INDUSTRIES