ARVIND 2022-23 Annual Report Analysis

Wed, 12 Jul

ARVIND has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

ARVIND Income Statement Analysis

• Operating income during the year rose 4.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 8.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 10.6% in FY23 as against 10.2% in FY22.
• Depreciation charges decreased by 0.4% and finance costs decreased by 2.5% YoY, respectively.
• Other income declined by 10.5% YoY.
• Net profit for the year grew by 55.5% YoY.
• Net profit margins during the year grew from 3.3% in FY22 to 5.0% in FY23.

ARVIND Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	80,099	83,825	4.7%
Other income	Rs m	497	445	-10.5%
Total Revenues	Rs m	80,596	84,270	4.6%
Gross profit	Rs m	8,199	8,877	8.3%
Depreciation	Rs m	2,540	2,530	-0.4%
Interest	Rs m	1,968	1,919	-2.5%
Profit before tax	Rs m	4,189	4,873	16.3%
Tax	Rs m	1,510	706	-53.3%
Profit after tax	Rs m	2,679	4,167	55.5%
Gross profit margin	%	10.2	10.6
Effective tax rate	%	36.0	14.5
Net profit margin	%	3.3	5.0

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ARVIND Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 28 billion as compared to Rs 36 billion in FY22, thereby witnessing an decrease of -21.9%.
• Long-term debt down at Rs 4 billion as compared to Rs 8 billion during FY22, a fall of 50.1%.
• Current assets fell 23% and stood at Rs 31 billion, while fixed assets rose 3% and stood at Rs 38 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 69 billion as against Rs 77 billion during FY22, thereby witnessing a fall of 10%.

ARVIND Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	29,388	33,445	13.8
Current Liabilities	Rs m	36,360	28,399	-21.9
Long-term Debt	Rs m	7,577	3,783	-50.1
Total Liabilities	Rs m	76,966	68,975	-10.4
Current assets	Rs m	40,397	31,170	-22.8
Fixed Assets	Rs m	36,568	37,805	3.4
Total Assets	Rs m	76,966	68,975	-10.4

ARVIND Cash Flow Statement Analysis

• ARVIND's cash flow from operating activities (CFO) during FY23 stood at Rs 7 billion, an improvement of 12.0% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -1 billion, an improvement of 11.6% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -5 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -34 million from the Rs 343 million net cash flows seen during FY22.

ARVIND Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	5,946	6,661	12.0%
Cash Flow from Investing Activities	Rs m	-1,214	-1,354	-
Cash Flow from Financing Activities	Rs m	-4,389	-5,340	-
Net Cash Flow	Rs m	343	-34	-

Current Valuations for ARVIND

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 15.9, an improvement from the EPS of Rs 10.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 136.2, stands at 8.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.1 times, while the price to sales ratio stands at 0.4 times.
• The company's price to cash flow (P/CF) ratio stood at 4.2 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	307.4	320.6
TTM Earnings per share	Rs	10.3	15.9
Diluted earnings per share	Rs	10.2	15.9
Price to Cash Flow	x	5.8	4.2
TTM P/E ratio	x	11.4	8.6
Price / Book Value ratio	x	1.0	0.8
Market Cap	Rs m	28,352	28,268
Dividends per share (Unadj.)	Rs	0.0	5.8

Ratio Analysis for ARVIND

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.1x during FY23, from 1.1x during FY22. 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 improved and stood at 3.5x during FY23, from 3.1x during FY22. 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 improved and stood at 12.5% during FY23, from 9.1% during FY23. 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 improved and stood at 18.2% during FY23, from 16.7% during FY22. 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 improved and stood at 8.8% during FY23, from 6.0% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	1.1	1.1
Debtors’ Days	Days	5	4
Interest coverage	x	3.1	3.5
Debt to equity ratio	x	0.3	0.1
Return on assets	%	6.0	8.8
Return on equity	%	9.1	12.5
Return on capital employed	%	16.7	18.2

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 88.0 to Rs 136.2, registering a gain of Rs 48.3 or around 54.9%.

Overall, the S&P BSE SENSEX is up 20.5% over the year.

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