Company Name: Kansai Nerolac Paints

Ratio analysis Summary

Particulars Mar '13 Mar '14 Mar '15

Revenue growth 13.6% 11.9% 12.5%

Profitability ratios

Gross margin 63.0% 61.8% 59.6%

EBITDA margin/ Operating profit margin 11.1% 11.5% 12.5%

Pre tax marging 9.7% 9.7% 10.4%

EBIT margin 9.6% 9.8% 10.4%

Net profit marging 6.9% 6.9% 7.0%

Return on investment

Operating ROA 16.10% 14.86% 16.20%

Return on asset - RoA 11.41% 10.84% 11.52%

Return on capital employed - RoCE 22.53% 23.11% 25.11%

Return on equity - RoE 21.31% 20.71% 20.59%

Return on common equity It is calculated by divding net income from average common equity .ie total equity minus preferred equity)

Liquidity ratios

Current ratio (x) 2.04 ( 1.60) ( 1.68)

Quick ratio (x) ( 0.99) ( 0.75) ( 0.79)

Cash ratio (x) ( 0.40) ( 0.22) ( 0.19)

Cash conversion cycle (Refer working capital days)

( 56.20) ( 46.77) ( 37.16)

Activity Turnover ratios

Working capital days

- Receivables days 38.00 38.16 39.20

- Inventory days 104.42 104.35 101.78

- Payables days 86.22 95.74 103.82

Working capital days 56.20 46.77 37.16

Turnover

Receivables turnover 9.61 9.56 9.31

Inventory turnover 3.50 3.50 3.59

Payables turnover 4.23 3.81 3.52

Asset turnover 1.86 1.69 1.70

Fixed asset turnover ( 8.17) ( 5.77) ( 5.38)

Solvency ratios

Debt to asset ratio ( 0.16) ( 0.14) ( 0.12)

Debt to capital ratio ( 0.24) ( 0.21) ( 0.18)

Debt to equity ratio (x) ( 0.31) ( 0.27) ( 0.22)

Financial leverage ratio ( 1.87) ( 1.91) ( 1.79)

Interest coverage ratios ( 10.48) ( 9.67) ( 11.43)

Fixed charge coverage ratios ( 8.98) ( 3.27) ( 8.76)

Valuation ratios

Price earnings ratio 17.65 27.35 26.05

Basic EPS 6.06 6.76 7.68

EBITDA per share 9.72 11.25 13.72

Dividends per share 3.65 4.71 5.75

Dividend payout ratio 0.35 0.38 0.39

Retention rate (%) 0.40 0.30 0.25

Du Pont Analysis

Net profit margin 0.069 0.069 0.070

Asset turnover 1.86 1.69 1.70

Financial leverage (Total asset / Total
equity) 1.87 1.91 1.79
Financial Analysis

Particulars Mar '12 Mar '13 Mar '14 Mar '15

Revenues ( 2,662.1) ( 3,024) ( 3,385) ( 3,807)

Direct costs

Material consumption ( 1,787.4) ( 1,920) ( 2,085) ( 2,256)

67.1% 63.5% 61.6% 59.3%

Power & fuel ( 25.1) ( 28) ( 34) ( 37)

0.9% 0.9% 1.0% 1.0%

Stock adjustements ( (73.2) ( (41) ( (27) ( (25)

-2.7% -1.4% -0.8% -0.6%

Other mfg exp ( -  ) ( -  ) ( -  ) ( -  )

0.0% 0.0% 0.0% 0.0%

Total costs ( 1,739.3) ( 1,906) ( 2,091) ( 2,269)

65.3% 63.0% 61.8% 59.6%

Gross profit ( 922.8) ( 1,118) ( 1,294) ( 1,538)

34.7% 37.0% 38.2% 40.4%

Indirect costs

Employee costs ( 122.3) ( 140) ( 159) ( 178)

4.6% 4.6% 4.7% 4.7%

SGA ( -  ) ( -  ) ( -  ) ( -  )

0.0% 0.0% 0.0% 0.0%

Misc. exp ( 523.0) ( 641) ( 745) ( 884)

19.6% 21.2% 22.0% 23.2%

Less: pre-op exp ( -  ) ( -  ) ( -  ) ( -  )

0.0% 0.0% 0.0% 0.0%

Total indirect ( 645.3) ( 781) ( 904) ( 1,063)

24.2% 25.8% 26.7% 27.9%

Total costs ( 2,384.6) ( 2,688) ( 2,995) ( 3,331)

89.6% 88.9% 88.5% 87.5%

EBITDA ( 277.5) ( 336) ( 390) ( 475)

10.4% 11.1% 11.5% 12.5%

Depreciation ( 37.6) ( 46) ( 58) ( 79)

1.4% 1.5% 1.7% 2.1%

EBIT ( 239.9) ( 290) ( 331) ( 397)

9.0% 9.6% 9.8% 10.4%

Interest costs ( 22.4) ( 28) ( 34) ( 35)

0.8% 0.9% 1.0% 0.9%

EBT (pre-other income) ( 217.6) ( 262.4) ( 297.1) ( 362.1)

8.2% 8.7% 8.8% 9.5%

Other income (positive) ( 30.6) ( 31) ( 31) ( 34)

( 30.6) ( 31) ( 31) ( 34)

1.2% 1.0% 0.9% 0.9%

EBT (post-other income) ( 248.2) ( 293.1) ( 327.7) ( 396.3)

9.3% 9.7% 9.7% 10.4%

Taxes

- Income tax ( 70.8) ( 83) ( 93) ( 130)

- FBT ( -  ) ( -  ) ( -  ) ( -  )

- Deferred Tax ( -  ) ( -  ) ( -  ) ( -  )

Total taxes ( 70.8) ( 83) ( 93) ( 130)

effective tax rate 28.5% 28.4% 28.5% 32.9%

PAT ( 177.4) ( 209.8) ( 234.3) ( 266.0)

6.7% 6.9% 6.9% 7.0%

Dividend 56.32 ( 73) ( 89) ( 104)

Preference Dividend 0 0 0 0

Equity Dividend % 70 ( 90) ( 110) ( 125)

EPS - Unit Curr 5.12 6.06 6.76 3.84

Balance Sheet

SOURCES OF FUNDS :

Share capital ( 69.2) ( 69) ( 69) ( 69)

Reserves ( 686.4) ( 915) ( 1,062) ( 1,223)

Others ( -  ) ( -  ) ( -  ) ( -  )

Equity capital ( 755.6) ( 984) ( 1,131) ( 1,292)

Secured Loans ( 71.9) ( 148) ( 300) ( 213)

Unsecured loans ( 98.0) ( 155) ( 3) ( 75)

Total Debt ( 169.9) ( 303) ( 303) ( 288)

Total funds employed ( 925.5) ( 1,287) ( 1,434) ( 1,580)

Other Liabilities ( -  ) ( -  ) ( -  ) ( -  )

Current Liabilities and Provisions

Current Liabilities ( 430.8) ( 470) ( 627) ( 663)

Provisions ( 64.0) ( 81) ( 99) ( 65)

Total Current Liabilities ( 494.8) ( 551) ( 726) ( 729)

Deferred Tax Liability ( -  ) ( -  ) ( -  ) ( -  )

Other business liabilities ( 494.8) ( 551) ( 726) ( 729)

Total Liabilities ( 1,420.3) ( 1,839) ( 2,160) ( 2,309)

APPLICATION OF FUNDS :

Gross Block ( 514.2) ( 602) ( 879) ( 1,051)

Less : Accumulated Depreciation ( 242.2) ( 280) ( 331) ( 403)

Less:Impairment of Assets ( 90.0) ( -  ) ( 1) ( 1)

Net Block ( 182.0) ( 322) ( 548) ( 647)

Lease Adjustment ( -  ) ( -  ) ( -  ) ( -  )

Capital Work in Progress ( 65.9) ( 171) ( 132) ( 88)

Total fixed assets ( 247.8) ( 493) ( 680) ( 734)

Investments ( 79.6) ( 91) ( 187) ( 244)

Current Assets

Inventories ( 514.0) ( 577) ( 619) ( 647)

Sundry Debtors ( 305.2) ( 325) ( 383) ( 434)

Cash and Bank ( 176.3) ( 223) ( 163) ( 141)

( 995.4) ( 1,124) ( 1,165) ( 1,222)

Loans and Advances ( 97.4) ( 131) ( 128) ( 109)

Total Current Assets, Loans & advances ( 1,092.9) ( 1,255) ( 1,293) ( 1,331)

Miscellaneous Expenses not written off ( -  ) ( -  ) ( -  ) ( -  )

Deferred Tax Assets ( -  ) ( -  ) ( -  ) ( -  )

Other Assets ( -  ) ( -  ) ( -  ) ( -  )

Total Assets ( 1,420.3) ( 1,839) ( 2,160) ( 2,309)

( - ) ( - ) ( - ) ( - )

Other key balance sheet parameters

Current assets ( 995.4) ( 1,124) ( 1,165) ( 1,222)

Current liabilite ( 494.8) ( 551) ( 726) ( 729)

Net current assets ( 500.6) ( 573) ( 439) ( 493)

Change in W/c ( (77) ( 60) ( (24)

Net debt ( (6.4) ( 80) ( 140) ( 147)

Capital employed ( 925.5) ( 1,287) ( 1,434) ( 1,580)

Capex ( 88) ( 277) ( 171)

Average

- Equity ( 870) ( 1,058) ( 1,212)

- Debt ( 236) ( 303) ( 296)

- Total capital ( 1,106) ( 1,361) ( 1,507)

- Assets ( 1,630) ( 1,999) ( 2,235)

- CE ( 1,106) ( 1,361) ( 1,507)

- debtors ( 315) ( 354) ( 409)

- inventory ( 545) ( 598) ( 633)

- creditors ( 450) ( 549) ( 645)

Earnings per share 5.12 6.06 6.76 3.84

Market price - High 118 ( 213) ( 256) ( 227)

Market price - Low 78 ( 107) ( 185) ( 200)

Market price - Average 98 160 220.5 213.5

Book value per share 21.83 28.4 32.64 18.64

Cash flow per share 6.6 ( 8) ( 9) ( 10)

Sales per share 85.2 ( 97) ( 112) ( 125)

No of shares - in crores 34.6153 34.629 34.6481 69.3284

Cash Flow Statements

At Beginning of the year ( 122.8) ( 176.3) ( 222.5) ( 163.1)

Operating Activities ( 119.9) ( 176.6) ( 335.5) ( 312.0)

Investing Activities ( (67.1) ( (192.6) ( (304.0) ( (168.7)

Financing Activities ( 0.6) ( 62.2) ( (90.9) ( (165.2)

Net Inc/(Dec) in Cash and Cash Equivalent ( 53.5) ( 46.3) ( (59.5) ( (21.9)

At End of the year ( 176.3) ( 222.5) ( 163.1) ( 141.2)

Net income less ocf ( 95.0) ( 79.5) ( (43.0) ( 32.6)