SRF 2021-22 Annual Report Analysis

Wed, 29 Jun

SRF 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.

SRF Income Statement Analysis

• Operating income during the year rose 48.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 45.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 25.0% in FY22 as against 25.4% in FY21.
• Depreciation charges increased by 14.2% and finance costs decreased by 13.5% YoY, respectively.
• Other income grew by 74.1% YoY.
• Net profit for the year grew by 57.6% YoY.
• Net profit margins during the year grew from 14.3% in FY21 to 15.2% in FY22.

SRF Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	84,000	124,337	48.0%
Other income	Rs m	664	1,155	74.1%
Total Revenues	Rs m	84,664	125,492	48.2%
Gross profit	Rs m	21,333	31,032	45.5%
Depreciation	Rs m	4,531	5,172	14.2%
Interest	Rs m	1,340	1,159	-13.5%
Profit before tax	Rs m	16,127	25,856	60.3%
Tax	Rs m	4,144	6,966	68.1%
Profit after tax	Rs m	11,983	18,889	57.6%
Gross profit margin	%	25.4	25.0
Effective tax rate	%	25.7	26.9
Net profit margin	%	14.3	15.2

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SRF Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 44 billion as compared to Rs 36 billion in FY21, thereby witnessing an increase of 24.3%.
• Long-term debt down at Rs 18 billion as compared to Rs 20 billion during FY21, a fall of 10.8%.
• Current assets rose 33% and stood at Rs 53 billion, while fixed assets rose 17% and stood at Rs 105 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 158 billion as against Rs 129 billion during FY21, thereby witnessing a growth of 22%.

SRF Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	68,539	85,621	24.9
Current Liabilities	Rs m	35,711	44,403	24.3
Long-term Debt	Rs m	19,650	17,533	-10.8
Total Liabilities	Rs m	129,113	157,650	22.1
Current assets	Rs m	39,389	52,543	33.4
Fixed Assets	Rs m	89,724	105,107	17.1
Total Assets	Rs m	129,113	157,650	22.1

SRF Cash Flow Statement Analysis

• SRF's cash flow from operating activities (CFO) during FY22 stood at Rs 21 billion, an improvement of 18.9% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -16 billion, an improvement of 5.9% on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -2 billion, an improvement of 17% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 3 billion from the Rs 219 million net cash flows seen during FY21.

SRF 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	17,717	21,057	18.9%
Cash Flow from Investing Activities	Rs m	-14,997	-15,877	-
Cash Flow from Financing Activities	Rs m	-2,511	-2,073	-
Net Cash Flow	Rs m	219	3,122	1,328.8%

Current Valuations for SRF

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 63.7, an decline from the EPS of Rs 202.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,275.0, stands at 35.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 7.9 times, while the price to sales ratio stands at 5.4 times.
• The company's price to cash flow (P/CF) ratio stood at 89.8 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	1,417.7	419.5
TTM Earnings per share	Rs	202.2	63.7
Diluted earnings per share	Rs	40.4	63.7
Price to Cash Flow	x	97.0	89.8
TTM P/E ratio	x	133.7	35.7
Price / Book Value ratio	x	3.7	25.2
Market Cap	Rs m	255,963	2,160,161
Dividends per share (Unadj.)	Rs	24.0	16.8

Ratio Analysis for SRF

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.2x during FY22, from 1.1x 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 23.3x during FY22, from 13.0x 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 22.1% during FY22, from 17.5% 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 improved and stood at 26.2% during FY22, from 19.8% 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 12.7% during FY22, from 10.3% 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	1.1	1.2
Debtors’ Days	Days	6	5
Interest coverage	x	13.0	23.3
Debt to equity ratio	x	0.3	0.2
Return on assets	%	10.3	12.7
Return on equity	%	17.5	22.1
Return on capital employed	%	19.8	26.2

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

SRF Share Price Performance

Over the last one year, SRF share price has moved down from Rs 7,084.5 to Rs 2,275.0, registering a loss of Rs 4,809.5 or around 67.9%.

Overall, the S&P BSE SENSEX is up 0.6% over the year.

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

Read: Latest Annual Report Analysis of SRF