POLYCHEM 2021-22 Annual Report Analysis

Fri, 23 Sep

POLYCHEM 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.

POLYCHEM Income Statement Analysis

• Operating income during the year rose 45.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 8.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 2.0% in FY22 as against 2.6% in FY21.
• Depreciation charges decreased by 6.8% and finance costs decreased by 16.7% YoY, respectively.
• Other income declined by 42.9% YoY.
• Net profit for the year declined by 32.1% YoY.
• Net profit margins during the year declined from 5.2% in FY21 to 2.4% in FY22.

POLYCHEM Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	246	358	45.3%
Other income	Rs m	14	8	-42.9%
Total Revenues	Rs m	261	366	40.5%
Gross profit	Rs m	7	7	8.0%
Depreciation	Rs m	7	7	-6.8%
Interest	Rs m	1	1	-16.7%
Profit before tax	Rs m	13	8	-39.2%
Tax	Rs m	0	-1	NA
Profit after tax	Rs m	13	9	-32.1%
Gross profit margin	%	2.6	2.0
Effective tax rate	%	-1.1	-13.0
Net profit margin	%	5.2	2.4

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POLYCHEM Balance Sheet Analysis

• The company's current liabilities during FY22 down at Rs 44 million as compared to Rs 68 million in FY21, thereby witnessing an decrease of -35.1%.
• Current assets rose 7% and stood at Rs 208 million, while fixed assets fell 10% and stood at Rs 123 million in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 331 million as against Rs 331 million during FY21, thereby witnessing a fall of 0%.

POLYCHEM Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	255	279	9.4
Current Liabilities	Rs m	68	44	-35.1
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	331	331	0.0
Current assets	Rs m	195	208	7.1
Fixed Assets	Rs m	137	123	-10.1
Total Assets	Rs m	331	331	0.0

POLYCHEM Cash Flow Statement Analysis

• POLYCHEM's cash flow from operating activities (CFO) during FY22 stood at Rs -22 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -9 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -3 million, an improvement of 64% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -34 million from the Rs 11 million net cash flows seen during FY21.

POLYCHEM 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	14	-22	-
Cash Flow from Investing Activities	Rs m	6	-9	-
Cash Flow from Financing Activities	Rs m	-8	-3	-
Net Cash Flow	Rs m	11	-34	-

Current Valuations for POLYCHEM

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 21.8, an decline from the EPS of Rs 32.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 919.8, stands at 24.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.3 times, while the price to sales ratio stands at 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 17.7 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	615.7	894.6
TTM Earnings per share	Rs	32.1	21.8
Diluted earnings per share	Rs	31.8	21.6
Price to Cash Flow	x	10.5	17.7
TTM P/E ratio	x	16.5	24.4
Price / Book Value ratio	x	0.8	1.0
Market Cap	Rs m	204	274
Dividends per share (Unadj.)	Rs	0.0	3.0

Ratio Analysis for POLYCHEM

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 4.7x 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 12.9x during FY22, from 17.3x 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 3.1% during FY22, from 5.0% 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 3.0% during FY22, from 5.3% 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 2.8% during FY22, from 4.1% 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	4.7
Debtors’ Days	Days	107,129	99,838
Interest coverage	x	17.3	12.9
Debt to equity ratio	x	0.0	0.0
Return on assets	%	4.1	2.8
Return on equity	%	5.0	3.1
Return on capital employed	%	5.3	3.0

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

POLYCHEM Share Price Performance

Over the last one year, POLYCHEM share price has moved up from Rs 530.3 to Rs 919.8, registering a gain of Rs 389.5 or around 73.4%.

Overall, the S&P BSE SENSEX is down 1.5% over the year.

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