SUMITOMO CHEMICAL INDIA 2020-21 Annual Report Analysis

Wed, 31 Mar

SUMITOMO CHEMICAL INDIA 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.

SUMITOMO CHEMICAL INDIA Income Statement Analysis

• Operating income during the year rose 9.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 60.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 18.5% in FY21 as against 12.5% in FY20.
• Depreciation charges increased by 13.7% and finance costs decreased by 2.3% YoY, respectively.
• Other income grew by 73.4% YoY.
• Net profit for the year grew by 68.7% YoY.
• Net profit margins during the year grew from 8.4% in FY20 to 13.1% in FY21.

SUMITOMO CHEMICAL INDIA Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	24,247	26,449	9.1%
Other income	Rs m	107	186	73.4%
Total Revenues	Rs m	24,355	26,635	9.4%
Gross profit	Rs m	3,039	4,881	60.6%
Depreciation	Rs m	410	466	13.7%
Interest	Rs m	71	69	-2.3%
Profit before tax	Rs m	2,665	4,532	70.0%
Tax	Rs m	618	1,079	74.5%
Profit after tax	Rs m	2,047	3,453	68.7%
Gross profit margin	%	12.5	18.5
Effective tax rate	%	23.2	23.8
Net profit margin	%	8.4	13.1

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SUMITOMO CHEMICAL INDIA Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 11 billion as compared to Rs 8 billion in FY20, thereby witnessing an increase of 28.5%.
• Current assets rose 32% and stood at Rs 23 billion, while fixed assets rose 2% and stood at Rs 4 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 27 billion as against Rs 21 billion during FY20, thereby witnessing a growth of 27%.

SUMITOMO CHEMICAL INDIA Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	12,218	15,412	26.1
Current Liabilities	Rs m	8,399	10,792	28.5
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	21,051	26,701	26.8
Current assets	Rs m	17,456	23,043	32.0
Fixed Assets	Rs m	3,595	3,657	1.7
Total Assets	Rs m	21,051	26,701	26.8

SUMITOMO CHEMICAL INDIA Cash Flow Statement Analysis

• SUMITOMO CHEMICAL INDIA's cash flow from operating activities (CFO) during FY21 stood at Rs 4 billion, an improvement of 92.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -3 billion, an improvement of 118.6% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -471 million, an improvement of 23% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 1 billion from the Rs 422 million net cash flows seen during FY20.

SUMITOMO CHEMICAL INDIA 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	2,214	4,254	92.2%
Cash Flow from Investing Activities	Rs m	-1,179	-2,577	-
Cash Flow from Financing Activities	Rs m	-614	-471	-
Net Cash Flow	Rs m	422	1,207	186.3%

Current Valuations for SUMITOMO CHEMICAL INDIA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 6.9, an improvement from the EPS of Rs 4.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 290.8, stands at 42.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 9.4 times, while the price to sales ratio stands at 5.5 times.
• The company's price to cash flow (P/CF) ratio stood at 33.4 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	48.6	53.0
TTM Earnings per share	Rs	4.1	6.9
Diluted earnings per share	Rs	4.1	6.9
Price to Cash Flow	x	37.3	33.4
TTM P/E ratio	x	60.5	42.0
Price / Book Value ratio	x	8.9	8.5
Market Cap	Rs m	108,365	131,001
Dividends per share (Unadj.)	Rs	0.6	0.8

Ratio Analysis for SUMITOMO CHEMICAL INDIA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.1x during FY21, from 2.1x 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 66.4x during FY21, from 38.6x 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 22.4% during FY21, from 16.8% 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 29.9% during FY21, from 22.4% 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 13.2% during FY21, from 10.1% 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	2.1	2.1
Debtors’ Days	Days	128	117
Interest coverage	x	38.6	66.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	10.1	13.2
Return on equity	%	16.8	22.4
Return on capital employed	%	22.4	29.9

To see how SUMITOMO CHEMICAL INDIA has performed over the last 5 years, please visit here.

SUMITOMO CHEMICAL INDIA Share Price Performance

Over the last one year, SUMITOMO CHEMICAL INDIA share price has moved up from Rs 183.5 to Rs 290.8, registering a gain of Rs 107.4 or around 58.5%.

Overall, the S&P BSE SENSEX is up 74.1% over the year.

(To know more, check out historical annual results for SUMITOMO CHEMICAL INDIA and quarterly results for SUMITOMO CHEMICAL INDIA)

Read: Latest Annual Report Analysis of SUMITOMO CHEMICAL INDIA