ARVIND 2020-21 Annual Report Analysis

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ARVIND 2020-21 Annual Report Analysis
Wed, 27 Oct

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



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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 130.3, stands at 57.8 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 0.5 times, while the price to sales ratio stands at 0.3 times.
  • The company's price to cash flow (P/CF) ratio stood at 13.1 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 8.8 13.1
TTM P/E ratio x 57.7 57.8
Price / Book Value ratio x 0.5 0.5
Market Cap Rs m 33,717 33,738
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 34.5 to Rs 130.3, registering a gain of Rs 95.8 or around 277.7%.

Overall, the S&P BSE SENSEX is up 52.3% over the year.

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

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