ARVIND FASHIONS 2020-21 Annual Report Analysis

Wed, 31 Mar

ARVIND FASHIONS 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.

ARVIND FASHIONS Income Statement Analysis

• Operating income during the year fell 39.6% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 156.9% YoY during the fiscal. Operating profit margins witnessed a growth and stood at 4.5% in FY21 as against 4.8% in FY20.
• Depreciation charges decreased by 23.6% and finance costs decreased by 20.1% YoY, respectively.
• Other income grew by 114.7% YoY.
• Net profit for the year grew by 49.3% YoY.
• Net profit margins during the year declined from 10.3% in FY20 to 25.5% in FY21.

ARVIND FASHIONS Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	38,663	23,358	-39.6%
Other income	Rs m	598	1,283	114.7%
Total Revenues	Rs m	39,261	24,642	-37.2%
Gross profit	Rs m	1,855	-1,055	-156.9%
Depreciation	Rs m	4,375	3,341	-23.6%
Interest	Rs m	3,042	2,429	-20.1%
Profit before tax	Rs m	-4,964	-5,541	11.6%
Tax	Rs m	-972	419	-143.1%
Profit after tax	Rs m	-3,992	-5,960	49.3%
Gross profit margin	%	4.8	-4.5
Effective tax rate	%	19.6	-7.6
Net profit margin	%	-10.3	-25.5

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ARVIND FASHIONS Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 21 billion as compared to Rs 27 billion in FY20, thereby witnessing an decrease of -22.0%.
• Long-term debt down at Rs 2 billion as compared to Rs 2 billion during FY20, a fall of 3.4%.
• Current assets fell 17% and stood at Rs 21 billion, while fixed assets fell 17% and stood at Rs 12 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 33 billion as against Rs 40 billion during FY20, thereby witnessing a fall of 17%.

ARVIND FASHIONS Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	5,909	5,108	-13.6
Current Liabilities	Rs m	26,557	20,706	-22.0
Long-term Debt	Rs m	1,628	1,573	-3.4
Total Liabilities	Rs m	39,984	33,093	-17.2
Current assets	Rs m	25,274	20,862	-17.5
Fixed Assets	Rs m	14,711	12,231	-16.9
Total Assets	Rs m	39,984	33,093	-17.2

ARVIND FASHIONS Cash Flow Statement Analysis

• ARVIND FASHIONS's cash flow from operating activities (CFO) during FY21 stood at Rs -790 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -395 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs 1 billion, an improvement of 232% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -57 million from the Rs 27 million net cash flows seen during FY20.

ARVIND FASHIONS 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	2,057	-790	-
Cash Flow from Investing Activities	Rs m	-1,177	-395	-
Cash Flow from Financing Activities	Rs m	-853	1,128	-
Net Cash Flow	Rs m	27	-57	-

Current Valuations for ARVIND FASHIONS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -52.5, an improvement from the EPS of Rs -68.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 139.0, stands at -4.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.6 times, while the price to sales ratio stands at 0.7 times.
• The company's price to cash flow (P/CF) ratio stood at -6.6 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	658.9	205.8
TTM Earnings per share	Rs	-68.0	-52.5
Diluted earnings per share	Rs	-30.1	-45.0
Price to Cash Flow	x	50.5	-6.6
TTM P/E ratio	x	-5.0	-4.4
Price / Book Value ratio	x	5.9	3.4
Market Cap	Rs m	35,149	17,244
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for ARVIND FASHIONS

• Solvency Ratios

Current Ratio: The company's current ratio improved 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 deteriorated and stood at -1.3x during FY21, from -0.6x 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 -116.7% during FY21, from -67.6% 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 -46.6% during FY21, from -25.5% 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 -10.7% during FY21, from -2.4% 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	10
Interest coverage	x	-0.6	-1.3
Debt to equity ratio	x	0.3	0.3
Return on assets	%	-2.4	-10.7
Return on equity	%	-67.6	-116.7
Return on capital employed	%	-25.5	-46.6

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

ARVIND FASHIONS Share Price Performance

Over the last one year, ARVIND FASHIONS share price has moved down from Rs 146.0 to Rs 139.0, registering a loss of Rs 7.1 or around 4.8%.

Overall, the S&P BSE SENSEX is up 74.1% over the year.

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

Read: Latest Annual Report Analysis of ARVIND FASHIONS