ASIAN TEA 2021-22 Annual Report Analysis

Tue, 15 Nov

ASIAN 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.

ASIAN TEA Income Statement Analysis

• Operating income during the year fell 30.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 86.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 4.2% in FY22 as against 1.6% in FY21.
• Depreciation charges decreased by 15.0% and finance costs decreased by 4.0% YoY, respectively.
• Other income declined by 45.6% YoY.
• Net profit for the year declined by 21.9% YoY.
• Net profit margins during the year grew from 3.1% in FY21 to 3.5% in FY22.

ASIAN TEA Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	1,181	815	-30.9%
Other income	Rs m	58	32	-45.6%
Total Revenues	Rs m	1,239	847	-31.6%
Gross profit	Rs m	19	35	86.8%
Depreciation	Rs m	2	1	-15.0%
Interest	Rs m	35	33	-4.0%
Profit before tax	Rs m	40	31	-21.8%
Tax	Rs m	3	3	-19.9%
Profit after tax	Rs m	37	29	-21.9%
Gross profit margin	%	1.6	4.2
Effective tax rate	%	8.5	8.7
Net profit margin	%	3.1	3.5

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ASIAN TEA Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 489 million as compared to Rs 347 million in FY21, thereby witnessing an increase of 40.9%.
• Long-term debt stood at Rs 72 million as compared to Rs 54 million during FY21, a growth of 33.7%.
• Current assets rose 62% and stood at Rs 790 million, while fixed assets rose 11% and stood at Rs 368 million in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 1 billion as against Rs 820 million during FY21, thereby witnessing a growth of 41%.

ASIAN TEA Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	413	591	42.8
Current Liabilities	Rs m	347	489	40.9
Long-term Debt	Rs m	54	72	33.7
Total Liabilities	Rs m	820	1,158	41.2
Current assets	Rs m	488	790	61.9
Fixed Assets	Rs m	332	368	10.9
Total Assets	Rs m	820	1,158	41.2

ASIAN TEA Cash Flow Statement Analysis

• ASIAN TEA's cash flow from operating activities (CFO) during FY22 stood at Rs -88 million, an improvement of 197.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -64 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs 170 million, an improvement of 1,012% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 17 million from the Rs 7 million net cash flows seen during FY21.

ASIAN 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	-30	-88	-
Cash Flow from Investing Activities	Rs m	55	-64	-
Cash Flow from Financing Activities	Rs m	-19	170	-
Net Cash Flow	Rs m	7	17	163.4%

Current Valuations for ASIAN TEA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 1.4, an decline from the EPS of Rs 3.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 12.9, stands at 8.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.4 times, while the price to sales ratio stands at 0.3 times.
• The company's price to cash flow (P/CF) ratio stood at 15.9 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	118.1	40.8
TTM Earnings per share	Rs	3.7	1.4
Diluted earnings per share	Rs	1.8	1.4
Price to Cash Flow	x	7.4	15.9
TTM P/E ratio	x	7.7	8.0
Price / Book Value ratio	x	0.3	0.8
Market Cap	Rs m	137	478
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for ASIAN TEA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.6x during FY22, from 1.4x 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 1.9x during FY22, from 2.2x 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 4.9% during FY22, from 8.9% 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 9.8% during FY22, from 16.0% 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 5.4% during FY22, from 8.7% 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	1.4	1.6
Debtors’ Days	Days	33,409	156,213
Interest coverage	x	2.2	1.9
Debt to equity ratio	x	0.1	0.1
Return on assets	%	8.7	5.4
Return on equity	%	8.9	4.9
Return on capital employed	%	16.0	9.8

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

ASIAN TEA Share Price Performance

Over the last one year, ASIAN TEA share price has moved down from Rs 19.6 to Rs 12.9, registering a loss of Rs 6.6 or around 33.8%.

Overall, the S&P BSE SENSEX is up 2.9% over the year.

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