AARTI INDUSTRIES 2020-21 Annual Report Analysis
Mon, 18 Oct

AARTI INDUSTRIES 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.

AARTI INDUSTRIES Income Statement Analysis

  • Operating income during the year rose 6.3% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 0.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 24.6% in FY21 as against 26.0% in FY20.
  • Depreciation charges increased by 24.9% and finance costs decreased by 30.8% YoY, respectively.
  • Other income declined by 92.1% YoY.
  • Net profit for the year declined by 2.1% YoY.
  • Net profit margins during the year declined from 14.5% in FY20 to 13.4% in FY21.

AARTI INDUSTRIES Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 37,519 39,889 6.3%
Other income Rs m 88 7 -92.1%
Total Revenues Rs m 37,608 39,896 6.1%
Gross profit Rs m 9,773 9,815 0.4%
Depreciation Rs m 1,852 2,313 24.9%
Interest Rs m 1,248 864 -30.8%
Profit before tax Rs m 6,762 6,646 -1.7%
Tax Rs m 1,294 1,293 -0.1%
Profit after tax Rs m 5,468 5,352 -2.1%
Gross profit margin % 26.0 24.6
Effective tax rate % 19.1 19.5
Net profit margin % 14.5 13.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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AARTI INDUSTRIES Balance Sheet Analysis

  • The company's current liabilities during FY21 stood at Rs 24 billion as compared to Rs 19 billion in FY20, thereby witnessing an increase of 25.2%.
  • Long-term debt stood at Rs 13 billion as compared to Rs 6 billion during FY20, a growth of 118.3%.
  • Current assets rose 18% and stood at Rs 24 billion, while fixed assets rose 22% and stood at Rs 53 billion in FY21.
  • Overall, the total assets and liabilities for FY21 stood at Rs 76 billion as against Rs 63 billion during FY20, thereby witnessing a growth of 21%.

AARTI INDUSTRIES Balance Sheet as on March 2021

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Networth Rs m 29,788 35,029 17.6
 
Current Liabilities Rs m 19,164 24,001 25.2
Long-term Debt Rs m 5,808 12,681 118.3
Total Liabilities Rs m 63,325 76,417 20.7
 
Current assets Rs m 20,049 23,676 18.1
Fixed Assets Rs m 43,276 52,741 21.9
Total Assets Rs m 63,325 76,417 20.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



AARTI INDUSTRIES Cash Flow Statement Analysis

  • AARTI INDUSTRIES's cash flow from operating activities (CFO) during FY21 stood at Rs 9 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY21 stood at Rs -13 billion, an improvement of 17.6% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY21 stood at Rs 6 billion, an improvement of 215% on a YoY basis.
  • Overall, net cash flows for the company during FY21 stood at Rs 2 billion from the Rs -6 billion net cash flows seen during FY20.

AARTI INDUSTRIES 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 11,021 8,727 -20.8%
Cash Flow from Investing Activities Rs m -11,241 -13,221 -
Cash Flow from Financing Activities Rs m -5,349 6,145 -
Net Cash Flow Rs m -5,569 1,650 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for AARTI INDUSTRIES

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 30.7, an decline from the EPS of Rs 31.4 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 1,157.6, stands at 32.7 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.7 times, while the price to sales ratio stands at 2.4 times.
  • The company's price to cash flow (P/CF) ratio stood at 26.3 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 215.3 228.9
TTM Earnings per share Rs 31.4 30.7
Diluted earnings per share Rs 31.4 30.7
Price to Cash Flow x 27.6 26.3
TTM P/E ratio x 32.7 32.7
Price / Book Value ratio x 7.5 2.7
Market Cap Rs m 201,694 201,694
Dividends per share (Unadj.) Rs 3.5 3.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for AARTI INDUSTRIES

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 1.0x during FY21, from 1.0x 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 8.7x during FY21, from 6.4x 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 declined and down at 15.3% during FY21, from 18.4% 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 declined and down at 15.7% during FY21, from 22.5% 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 declined and down at 8.1% during FY21, from 10.6% 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 1.0 1.0
Debtors’ Days Days 7 7
Interest coverage x 6.4 8.7
Debt to equity ratio x 0.2 0.4
Return on assets % 10.6 8.1
Return on equity % 18.4 15.3
Return on capital employed % 22.5 15.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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

AARTI INDUSTRIES Share Price Performance

Over the last one year, AARTI INDUSTRIES share price has moved up from Rs 499.3 to Rs 1,157.6, registering a gain of Rs 658.4 or around 131.9%.

Overall, the S&P BSE SENSEX is up 52.4% over the year.

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