HONEYWELL AUTOMATION 2021-22 Annual Report Analysis

Wed, 27 Jul

HONEYWELL AUTOMATION 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.

HONEYWELL AUTOMATION Income Statement Analysis

• Operating income during the year fell 3.1% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 27.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 14.9% in FY22 as against 19.8% in FY21.
• Depreciation charges increased by 7.8% and finance costs decreased by 5.3% YoY, respectively.
• Other income grew by 8.0% YoY.
• Net profit for the year declined by 26.3% YoY.
• Net profit margins during the year declined from 15.1% in FY21 to 11.5% in FY22.

HONEYWELL AUTOMATION Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	30,428	29,483	-3.1%
Other income	Rs m	729	787	8.0%
Total Revenues	Rs m	31,157	30,270	-2.8%
Gross profit	Rs m	6,030	4,401	-27.0%
Depreciation	Rs m	487	525	7.8%
Interest	Rs m	92	87	-5.3%
Profit before tax	Rs m	6,180	4,576	-26.0%
Tax	Rs m	1,580	1,185	-25.0%
Profit after tax	Rs m	4,600	3,391	-26.3%
Gross profit margin	%	19.8	14.9
Effective tax rate	%	25.6	25.9
Net profit margin	%	15.1	11.5

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HONEYWELL AUTOMATION Balance Sheet Analysis

• The company's current liabilities during FY22 down at Rs 11 billion as compared to Rs 13 billion in FY21, thereby witnessing an decrease of -11.7%.
• Current assets rose 2% and stood at Rs 36 billion, while fixed assets rose 7% and stood at Rs 18 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 53 billion as against Rs 51 billion during FY21, thereby witnessing a growth of 4%.

HONEYWELL AUTOMATION Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	25,714	28,275	10.0
Current Liabilities	Rs m	12,570	11,095	-11.7
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	51,453	53,371	3.7
Current assets	Rs m	35,050	35,811	2.2
Fixed Assets	Rs m	16,403	17,560	7.1
Total Assets	Rs m	51,453	53,371	3.7

HONEYWELL AUTOMATION Cash Flow Statement Analysis

• HONEYWELL AUTOMATION's cash flow from operating activities (CFO) during FY22 stood at Rs 3 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -1 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -985 million on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 593 million from the Rs -322 million net cash flows seen during FY21.

HONEYWELL AUTOMATION 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	3,644	2,636	-27.7%
Cash Flow from Investing Activities	Rs m	-3,031	-1,094	-
Cash Flow from Financing Activities	Rs m	-895	-985	-
Net Cash Flow	Rs m	-322	593	-

Current Valuations for HONEYWELL AUTOMATION

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 383.6, an decline from the EPS of Rs 520.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 39,950.0, stands at 104.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 12.5 times, while the price to sales ratio stands at 12.0 times.
• The company's price to cash flow (P/CF) ratio stood at 97.0 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	3,442.1	3,335.2
TTM Earnings per share	Rs	520.4	383.6
Diluted earnings per share	Rs	520.3	383.6
Price to Cash Flow	x	82.4	97.0
TTM P/E ratio	x	91.1	104.2
Price / Book Value ratio	x	12.8	13.4
Market Cap	Rs m	327,909	379,787
Dividends per share (Unadj.)	Rs	85.0	90.0

Ratio Analysis for HONEYWELL AUTOMATION

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.2x during FY22, from 2.8x 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 deteriorated and stood at 53.5x during FY22, from 68.2x 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 declined and down at 12.0% during FY22, from 17.9% 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 declined and down at 16.5% during FY22, from 24.4% 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 declined and down at 6.5% during FY22, from 9.1% 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	2.8	3.2
Debtors’ Days	Days	1,107	836
Interest coverage	x	68.2	53.5
Debt to equity ratio	x	0.0	0.0
Return on assets	%	9.1	6.5
Return on equity	%	17.9	12.0
Return on capital employed	%	24.4	16.5

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

HONEYWELL AUTOMATION Share Price Performance

Over the last one year, HONEYWELL AUTOMATION share price has moved down from Rs 42,813.3 to Rs 39,950.0, registering a loss of Rs 2,863.3 or around 6.7%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 29,252.4 (up 1.6%). Over the last one year it has moved up from 23,678.7 to 29,252.4, a gain of 5,574 points (up 23.5%).

Overall, the S&P BSE SENSEX is up 5.2% over the year.

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

Read: Latest Annual Report Analysis of HONEYWELL AUTOMATION