PIDILITE INDUSTRIES 2018-19 Annual Report Analysis

Sun, 31 Mar

PIDILITE INDUSTRIES has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

PIDILITE INDUSTRIES Income Statement Analysis

• Operating income during the year rose 19.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 0.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 19.1% in FY19 as against 22.6% in FY18.
• Depreciation charges increased by 10.7% and finance costs increased by 67.8% YoY, respectively.
• Other income declined by 1.2% YoY.
• Net profit for the year declined by 3.8% YoY.
• Net profit margins during the year declined from 16.2% in FY18 to 13.1% in FY19.

PIDILITE INDUSTRIES Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	59,381	70,780	19.2%
Other income	Rs m	1,484	1,466	-1.2%
Total Revenues	Rs m	60,865	72,246	18.7%
Gross profit	Rs m	13,412	13,502	0.7%
Depreciation	Rs m	1,199	1,327	10.7%
Interest	Rs m	155	261	67.8%
Profit before tax	Rs m	13,542	13,380	-1.2%
Tax	Rs m	3,927	4,132	5.2%
Profit after tax	Rs m	9,615	9,248	-3.8%
Gross profit margin	%	22.6	19.1
Effective tax rate	%	29.0	30.9
Net profit margin	%	16.2	13.1

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PIDILITE INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 13 billion as compared to Rs 12 billion in FY18, thereby witnessing an increase of 7.7%.
• Long-term debt stood at Rs 85 million as compared to Rs 71 million during FY18, a growth of 19.7%.
• Current assets rose 8% and stood at Rs 36 billion, while fixed assets rose 23% and stood at Rs 23 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 59 billion as against Rs 52 billion during FY18, thereby witnessing a growth of 14%.

PIDILITE INDUSTRIES Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	35,650	41,384	16.1
Current Liabilities	Rs m	12,082	13,007	7.7
Long-term Debt	Rs m	71	85	19.7
Total Liabilities	Rs m	51,986	59,038	13.6
Current assets	Rs m	33,088	35,820	8.3
Fixed Assets	Rs m	18,898	23,218	22.9
Total Assets	Rs m	51,986	59,038	13.6

PIDILITE INDUSTRIES Cash Flow Statement Analysis

• PIDILITE INDUSTRIES's cash flow from operating activities (CFO) during FY19 stood at Rs 8 billion, an improvement of 6.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -5 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -4 billion, an improvement of 54% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -292 million from the Rs 468 million net cash flows seen during FY18.

PIDILITE INDUSTRIES Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	7,964	8,448	6.1%
Cash Flow from Investing Activities	Rs m	393	-5,131	-
Cash Flow from Financing Activities	Rs m	-7,898	-3,606	-
Net Cash Flow	Rs m	468	-292	-

Current Valuations for PIDILITE INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 18.2, an decline from the EPS of Rs 18.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,242.4, stands at 68.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 15.3 times, while the price to sales ratio stands at 8.9 times.
• The company's price to cash flow (P/CF) ratio stood at 51.6 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	116.9	139.3
TTM Earnings per share	Rs	18.9	18.2
Diluted earnings per share	Rs	18.9	18.2
Price to Cash Flow	x	43.2	51.6
TTM P/E ratio	x	48.3	68.3
Price / Book Value ratio	x	11.9	13.2
Market Cap	Rs m	423,336	545,289
Dividends per share (Unadj.)	Rs	6.0	6.5

Ratio Analysis for PIDILITE INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.8x during FY19, from 2.7x during FY18. 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 52.3x during FY19, from 88.1x during FY18. 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 22.3% during FY19, from 27.0% during FY19. 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 32.9% during FY19, from 38.3% during FY18. 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 16.1% during FY19, from 18.8% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	2.7	2.8
Debtors’ Days	Days	6	5
Interest coverage	x	88.1	52.3
Debt to equity ratio	x	0.0	0.0
Return on assets	%	18.8	16.1
Return on equity	%	27.0	22.3
Return on capital employed	%	38.3	32.9

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

PIDILITE INDUSTRIES Share Price Performance

Over the last one year, PIDILITE INDUSTRIES share price has moved up from Rs 918.5 to Rs 1,242.4, registering a gain of Rs 323.9 or around 35.3%.

Overall, the S&P BSE SENSEX is up 16.3% over the year.

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

Read: Latest Annual Report Analysis of PIDILITE INDUSTRIES