RALLIS 2019-20 Annual Report Analysis

Tue, 31 Mar

RALLIS 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.

RALLIS Income Statement Analysis

• Operating income during the year rose 13.5% 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 stood at 12.2% in FY20 as against 12.3% in FY19.
• Depreciation charges increased by 33.5% and finance costs increased by 21.1% YoY, respectively.
• Other income grew by 12.0% YoY.
• Net profit for the year grew by 18.7% YoY.
• Net profit margins during the year grew from 7.8% in FY19 to 8.2% in FY20.

RALLIS Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	19,840	22,518	13.5%
Other income	Rs m	307	343	12.0%
Total Revenues	Rs m	20,146	22,862	13.5%
Gross profit	Rs m	2,438	2,744	12.6%
Depreciation	Rs m	461	615	33.5%
Interest	Rs m	81	98	21.1%
Profit before tax	Rs m	2,203	2,375	7.8%
Tax	Rs m	655	538	-17.8%
Profit after tax	Rs m	1,548	1,837	18.7%
Gross profit margin	%	12.3	12.2
Effective tax rate	%	29.7	22.7
Net profit margin	%	7.8	8.2

Act Before 11:59pm: Last Day to SAVE 80% on Our Midcap Stocks Research

RALLIS Balance Sheet Analysis

• The company's current liabilities during FY20 stood at Rs 10 billion as compared to Rs 8 billion in FY19, thereby witnessing an increase of 17.6%.
• Long-term debt down at Rs 124 million as compared to Rs 158 million during FY19, a fall of 21.8%.
• Current assets rose 14% and stood at Rs 16 billion, while fixed assets rose 11% and stood at Rs 8 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 24 billion as against Rs 22 billion during FY19, thereby witnessing a growth of 13%.

RALLIS Balance Sheet as on March 2020

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Networth	Rs m	12,859	14,095	9.6
Current Liabilities	Rs m	8,142	9,574	17.6
Long-term Debt	Rs m	158	124	-21.8
Total Liabilities	Rs m	21,626	24,485	13.2
Current assets	Rs m	14,132	16,142	14.2
Fixed Assets	Rs m	7,494	8,342	11.3
Total Assets	Rs m	21,626	24,485	13.2

RALLIS Cash Flow Statement Analysis

• RALLIS's cash flow from operating activities (CFO) during FY20 stood at Rs 3 billion, an improvement of 320.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY20 stood at Rs -2 billion, an improvement of 378.0% on a YoY basis.
• Cash flow from financial activities (CFF) during FY20 stood at Rs -744 million on a YoY basis.
• Overall, net cash flows for the company during FY20 stood at Rs 165 million from the Rs -229 million net cash flows seen during FY19.

RALLIS 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	801	3,368	320.8%
Cash Flow from Investing Activities	Rs m	-514	-2,459	-
Cash Flow from Financing Activities	Rs m	-515	-744	-
Net Cash Flow	Rs m	-229	165	-

Current Valuations for RALLIS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 9.4, an improvement from the EPS of Rs 8.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 175.6, stands at 17.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.4 times, while the price to sales ratio stands at 1.5 times.
• The company's price to cash flow (P/CF) ratio stood at 15.2 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	102.0	115.8
TTM Earnings per share	Rs	8.0	9.4
Diluted earnings per share	Rs	8.0	9.4
Price to Cash Flow	x	16.0	15.2
TTM P/E ratio	x	20.7	17.9
Price / Book Value ratio	x	3.0	2.6
Market Cap	Rs m	38,427	37,212
Dividends per share (Unadj.)	Rs	2.5	2.5

Ratio Analysis for RALLIS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.7x during FY20, from 1.7x 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 25.3x during FY20, from 28.3x 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 13.0% during FY20, from 12.0% 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 declined and down at 17.4% during FY20, from 17.5% 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 7.9% during FY20, from 7.5% 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	1.7	1.7
Debtors’ Days	Days	826	730
Interest coverage	x	28.3	25.3
Debt to equity ratio	x	0.0	0.0
Return on assets	%	7.5	7.9
Return on equity	%	12.0	13.0
Return on capital employed	%	17.5	17.4

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

RALLIS Share Price Performance

Over the last one year, RALLIS share price has moved up from Rs 165.1 to Rs 175.6, registering a gain of Rs 10.5 or around 6.4%.

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

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

Read: Latest Annual Report Analysis of RALLIS