WARREN TEA 2021-22 Annual Report Analysis

Tue, 31 May

WARREN TEA 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.

WARREN TEA Income Statement Analysis

• Operating income during the year fell 15.3% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 106.2% YoY during the fiscal. Operating profit margins witnessed a growth and stood at 1.8% in FY22 as against 24.2% in FY21.
• Depreciation charges decreased by 19.5% and finance costs decreased by 48.3% YoY, respectively.
• Other income grew by 452.6% YoY.
• Net profit for the year declined by 78.1% YoY.
• Net profit margins during the year declined from 30.6% in FY21 to 7.9% in FY22.

WARREN TEA Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	1,059	897	-15.3%
Other income	Rs m	21	115	452.6%
Total Revenues	Rs m	1,080	1,012	-6.3%
Gross profit	Rs m	256	-16	-106.2%
Depreciation	Rs m	25	20	-19.5%
Interest	Rs m	49	25	-48.3%
Profit before tax	Rs m	203	54	-73.6%
Tax	Rs m	-121	-17	-85.6%
Profit after tax	Rs m	324	71	-78.1%
Gross profit margin	%	24.2	-1.8
Effective tax rate	%	-59.7	-32.5
Net profit margin	%	30.6	7.9

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WARREN TEA Balance Sheet Analysis

• The company's current liabilities during FY22 down at Rs 508 million as compared to Rs 592 million in FY21, thereby witnessing an decrease of -14.2%.
• Current assets fell 27% and stood at Rs 280 million, while fixed assets fell 4% and stood at Rs 1 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 1 billion as against Rs 2 billion during FY21, thereby witnessing a fall of 10%.

WARREN TEA Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	1,041	1,101	5.8
Current Liabilities	Rs m	592	508	-14.2
Long-term Debt	Rs m	21	0	-100.0
Total Liabilities	Rs m	1,538	1,384	-10.0
Current assets	Rs m	385	280	-27.4
Fixed Assets	Rs m	1,153	1,104	-4.2
Total Assets	Rs m	1,538	1,384	-10.0

WARREN TEA Cash Flow Statement Analysis

• WARREN TEA's cash flow from operating activities (CFO) during FY22 stood at Rs -52 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs 72 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -28 million, an improvement of 92% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -8 million from the Rs 18 million net cash flows seen during FY21.

WARREN TEA 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	-122	-52	-
Cash Flow from Investing Activities	Rs m	515	72	-86.1%
Cash Flow from Financing Activities	Rs m	-374	-28	-
Net Cash Flow	Rs m	18	-8	-

Current Valuations for WARREN TEA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 5.9, an decline from the EPS of Rs 27.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 72.0, stands at 12.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.8 times, while the price to sales ratio stands at 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 9.7 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	88.6	75.1
TTM Earnings per share	Rs	27.1	5.9
Diluted earnings per share	Rs	27.1	5.9
Price to Cash Flow	x	1.6	9.7
TTM P/E ratio	x	1.7	12.1
Price / Book Value ratio	x	0.5	0.8
Market Cap	Rs m	562	886
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for WARREN TEA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.6x during FY22, from 0.7x 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 3.1x during FY22, from 5.2x 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 6.4% during FY22, from 31.1% 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 7.2% during FY22, from 23.7% 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 7.0% during FY22, from 24.3% 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	0.7	0.6
Debtors’ Days	Days	515	503
Interest coverage	x	5.2	3.1
Debt to equity ratio	x	0.0	0.0
Return on assets	%	24.3	7.0
Return on equity	%	31.1	6.4
Return on capital employed	%	23.7	7.2

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

WARREN TEA Share Price Performance

Over the last one year, WARREN TEA share price has moved up from Rs 58.9 to Rs 72.0, registering a gain of Rs 13.1 or around 22.2%.

Overall, the S&P BSE SENSEX is up 9.2% over the year.

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