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ARVIND 2020-21 Annual Report Analysis
Wed, 31 Mar

ARVIND 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 Income Statement Analysis

  • Operating income during the year fell 31.1% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 32.8% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 8.7% in FY21 as against 8.9% in FY20.
  • Depreciation charges decreased by 1.8% and finance costs decreased by 6.0% YoY, respectively.
  • Other income declined by 10.5% YoY.
  • Net profit for the year declined by 129.5% YoY.
  • Net profit margins during the year declined from 1.3% in FY20 to 0.5% in FY21.

ARVIND Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 73,690 50,772 -31.1%
Other income Rs m 576 516 -10.5%
Total Revenues Rs m 74,266 51,287 -30.9%
Gross profit Rs m 6,575 4,417 -32.8%
Depreciation Rs m 2,905 2,852 -1.8%
Interest Rs m 2,546 2,395 -6.0%
Profit before tax Rs m 1,701 -314 -118.4%
Tax Rs m 757 -35 -104.7%
Profit after tax Rs m 944 -278 -129.5%
Gross profit margin % 8.9 8.7
Effective tax rate % 44.5 11.2
Net profit margin % 1.3 -0.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Potential 33x Opportunity: 3 Next-Generation Defence Stocks

ARVIND Balance Sheet Analysis

  • The company's current liabilities during FY21 down at Rs 26 billion as compared to Rs 31 billion in FY20, thereby witnessing an decrease of -15.6%.
  • Long-term debt stood at Rs 11 billion as compared to Rs 10 billion during FY20, a growth of 12.1%.
  • Current assets fell 4% and stood at Rs 29 billion, while fixed assets fell 7% and stood at Rs 38 billion in FY21.
  • Overall, the total assets and liabilities for FY21 stood at Rs 67 billion as against Rs 71 billion during FY20, thereby witnessing a fall of 6%.

ARVIND Balance Sheet as on March 2021

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Networth Rs m 26,968 27,074 0.4
 
Current Liabilities Rs m 30,750 25,963 -15.6
Long-term Debt Rs m 10,183 11,419 12.1
Total Liabilities Rs m 71,299 67,129 -5.8
 
Current assets Rs m 30,377 29,046 -4.4
Fixed Assets Rs m 40,922 38,083 -6.9
Total Assets Rs m 71,299 67,129 -5.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



ARVIND Cash Flow Statement Analysis

  • ARVIND's cash flow from operating activities (CFO) during FY21 stood at Rs 8 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY21 stood at Rs -811 million on a YoY basis.
  • Cash flow from financial activities (CFF) during FY21 stood at Rs -7 billion on a YoY basis.
  • Overall, net cash flows for the company during FY21 stood at Rs -216 million from the Rs -199 million net cash flows seen during FY20.

ARVIND 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 8,605 7,763 -9.8%
Cash Flow from Investing Activities Rs m -3,056 -811 -
Cash Flow from Financing Activities Rs m -5,747 -7,168 -
Net Cash Flow Rs m -199 -216 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for ARVIND

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs -1.1, an decline from the EPS of Rs 3.6 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 65.7, stands at -61.5 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 0.6 times, while the price to sales ratio stands at 0.3 times.
  • The company's price to cash flow (P/CF) ratio stood at 5.2 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 284.8 196.1
TTM Earnings per share Rs 3.6 -1.1
Diluted earnings per share Rs 3.6 -1.1
Price to Cash Flow x 1.3 5.2
TTM P/E ratio x 5.5 -61.5
Price / Book Value ratio x 0.5 0.5
Market Cap Rs m 14,543 13,425
Dividends per share (Unadj.) Rs 0.0 0.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for ARVIND

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 1.1x 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 0.9x during FY21, from 1.7x 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 -1.0% during FY21, from 3.5% 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 5.4% during FY21, from 11.4% 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 3.2% during FY21, from 4.9% 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 1.1
Debtors’ Days Days 5 8
Interest coverage x 1.7 0.9
Debt to equity ratio x 0.4 0.4
Return on assets % 4.9 3.2
Return on equity % 3.5 -1.0
Return on capital employed % 11.4 5.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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

ARVIND Share Price Performance

Over the last one year, ARVIND share price has moved up from Rs 19.8 to Rs 65.7, registering a gain of Rs 46.0 or around 232.7%.

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

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

Annual Report FAQs

What is the current share price of ARVIND?

ARVIND currently trades at Rs 99.4 per share. You can check out the latest share price performance of ARVIND here...

What was the revenue of ARVIND in FY21? How does it compare to earlier years?

The revenues of ARVIND stood at Rs 51,287 m in FY21, which was down -30.9% compared to Rs 74,266 m reported in FY20.

ARVIND's revenue has fallen from Rs 92,667 m in FY17 to Rs 51,287 m in FY21.

Over the past 5 years, the revenue of ARVIND has grown at a CAGR of -13.7%.

What was the net profit of ARVIND in FY21? How does it compare to earlier years?

The net loss of ARVIND stood at Rs -278 m in FY21, which was down -129.5% compared to Rs 944 m reported in FY20.

This compares to a net profit of Rs 2,274 m in FY19 and a net profit of Rs 3,131 m in FY18.

Over the past 5 years, ARVIND net profit has grown at a CAGR of NaN%.

What does the cash flow statement of ARVIND reveal?

The cash flow statement is the financial statement that presents the cash inflows and outflows of a company during a given period of time.

This statement is one of the most useful tools for judging a company's liquidity position. The ratios and parameters in this statement helps test a company's financial health.

The cash flow statement of ARVIND reveals:

  • Cash flow from operations decreased in FY21 and stood at Rs 7,763 m as compared to Rs 8,605 m in FY20.
  • Cash flow from investments increased in FY21 and stood at Rs -811 m as compared to Rs -3,056 m in FY20.
  • Cash flow from financial activity decreased in FY21 and stood at Rs -7,168 m as compared to Rs -5,747 m in FY20.

Here's the cash flow statement of ARVIND for the past 5 years.

(Rs m)FY17FY18FY19FY20FY21
From Operations5,5114,28523,5828,6057,763
From Investments665-3,560865-3,056-811
From Financial Activity-6,211-554-10,194-5,747-7,168
Net Cashflow-35197330-199-216

What does the Key Ratio analysis of ARVIND reveal?

Be it the company's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.

The ratio/financial analysis of ARVIND reveals:

  • Operating profit margins witnessed a fall and stood at 8.7% in FY21 as against 8.9% in FY20.
  • Net profit margins declined from 1.3% in FY20 to 0.5% in FY21.
  • Debt to Equity ratio for FY21 stood at 0.4 as compared to 0.4 in FY20.

Here's the ratio/financial analysis of ARVIND for the past 5 years.

 FY17FY18FY19FY20FY21
Operating Profit Margin (%)10.39.89.48.98.7
Net Profit Margin (%)3.54.63.21.3-0.5
Debt to Equity Ratio (x)0.20.20.30.40.4

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