ARVIND LTD. 2017-18 Annual Report Analysis

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ARVIND LTD. 2017-18 Annual Report Analysis
Tue, 22 Jan

ARVIND LTD. has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

ARVIND LTD. Income Statement Analysis

  • Operating income during the year rose 16.9% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 3.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 8.9% in FY18 as against 10.1% in FY17.
  • Depreciation charges increased by 22.1% and finance costs decreased by 10.6% YoY, respectively.
  • Other income declined by 23.3% YoY.
  • Net profit for the year declined by 1.6% YoY.
  • Net profit margins during the year declined from 3.4% in FY17 to 2.9% in FY18.

ARVIND LTD. Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 92,577 108,261 16.9%
Other income Rs m 817 626 -23.3%
Total Revenues Rs m 93,394 108,888 16.6%
Gross profit Rs m 9,388 9,677 3.1%
Depreciation Rs m 2,943 3,593 22.1%
Interest Rs m 2,884 2,579 -10.6%
Profit before tax Rs m 4,378 4,131 -5.6%
Tax Rs m 989 746 -24.6%
Profit after tax Rs m 3,209 3,158 -1.6%
Gross profit margin % 10.1 8.9
Effective tax rate % 22.6 18.1
Net profit margin % 3.4 2.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



ARVIND LTD. Balance Sheet Analysis

  • The company's current liabilities during FY18 stood at Rs 51 billion as compared to Rs 39 billion in FY17, thereby witnessing an increase of 29.9%.
  • Long-term debt stood at Rs 8 billion as compared to Rs 8 billion during FY17, a growth of 12.2%.
  • Current assets rose 36% and stood at Rs 55 billion, while fixed assets fell 1% and stood at Rs 37 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 103 billion as against Rs 87 billion during FY17, thereby witnessing a growth of 18%.

ARVIND LTD. Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 35,682 37,826 6.0
 
Current Liabilities Rs m 39,289 51,048 29.9
Long-term Debt Rs m 7,566 8,487 12.2
Total Liabilities Rs m 86,680 102,584 18.3
 
Current assets Rs m 40,834 55,394 35.7
Fixed Assets Rs m 37,684 37,153 -1.4
Total Assets Rs m 86,680 102,584 18.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



ARVIND LTD. Cash Flow Statement Analysis

  • ARVIND LTD.'s cash flow from operating activities (CFO) during FY18 stood at Rs 4 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -4 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -554 million, an improvement of 91% on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs 197 million from the Rs -35 million net cash flows seen during FY17.

ARVIND LTD. Cash Flow Statement 2017-18

Particulars No. of months 12 12 % Change
Year Ending Mar-17 Mar-18
Cash Flow from Operating Activities Rs m 5,511 4,285 -22.2%
Cash Flow from Investing Activities Rs m 665 -3,560 -
Cash Flow from Financing Activities Rs m -6,211 -554 -
Net Cash Flow Rs m -35 197 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for ARVIND LTD.

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 12.2, an decline from the EPS of Rs 12.4 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 90.8, stands at 7.5 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.8 times, while the price to sales ratio stands at 1.0 times.
  • The company's price to cash flow (P/CF) ratio stood at 3.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Sales per share (Unadj.) Rs 358.5 419.2
TTM Earnings per share Rs 12.4 12.2
Diluted earnings per share Rs 12.4 12.2
Price to Cash Flow x 3.8 3.5
TTM P/E ratio x 7.5 7.5
Price / Book Value ratio x 2.5 2.8
Market Cap Rs m 23,435 23,432
Dividends per share (Unadj.) Rs 2.4 2.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for ARVIND LTD.

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 1.1x during FY18, from 1.0x during FY17. 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 2.6x during FY18, from 2.5x during FY17. 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 8.3% during FY18, from 9.0% during FY18. 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 14.0% during FY18, from 16.4% during FY17. 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 5.6% during FY18, from 7.0% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Current ratio x 1.0 1.1
Debtors’ Days Days 31 60
Interest coverage x 2.5 2.6
Debt to equity ratio x 0.2 0.2
Return on assets % 7.0 5.6
Return on equity % 9.0 8.3
Return on capital employed % 16.4 14.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

ARVIND LTD. Share Price Performance

Over the last one year, ARVIND LTD. share price has moved up from Rs 157.2 to Rs 90.8, registering a loss of Rs 66.5 or around 42.3%.

Overall, the S&P BSE SENSEX is up 1.7% over the year.

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

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For the quarter ended September 2019, ARVIND has posted a net profit of Rs 498 m (down 10.9% YoY). Sales on the other hand came in at Rs 20 bn (up 9.4% YoY). Read on for a complete analysis of ARVIND's quarterly results.

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