Markets will remain closed on April 17, 2024 on account of Ram Navami.

VODAFONE IDEA 2017-18 Annual Report Analysis

Sat, 31 Mar

VODAFONE IDEA 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.

VODAFONE IDEA Income Statement Analysis

• Operating income during the year fell 20.5% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 40.8% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 21.4% in FY18 as against 28.7% in FY17.
• Depreciation charges increased by 7.4% and finance costs increased by 22.2% YoY, respectively.
• Other income grew by 31.7% YoY.
• Net profit for the year grew by 446.6% YoY.
• Net profit margins during the year declined from 2.3% in FY17 to 15.9% in FY18.

VODAFONE IDEA Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	355,757	282,789	-20.5%
Other income	Rs m	3,690	4,861	31.7%
Total Revenues	Rs m	359,448	287,650	-20.0%
Gross profit	Rs m	102,275	60,545	-40.8%
Depreciation	Rs m	78,272	84,091	7.4%
Interest	Rs m	40,543	49,531	22.2%
Profit before tax	Rs m	-12,851	-68,216	430.8%
Tax	Rs m	-4,635	-23,310	402.9%
Profit after tax	Rs m	-8,215	-44,906	446.6%
Gross profit margin	%	28.7	21.4
Effective tax rate	%	36.1	34.2
Net profit margin	%	-2.3	-15.9

For You: Midcap Stocks Research at Less than Its Launch Price

VODAFONE IDEA Balance Sheet Analysis

• The company's current liabilities during FY18 down at Rs 108 billion as compared to Rs 171 billion in FY17, thereby witnessing an decrease of -36.5%.
• Long-term debt stood at Rs 569 billion as compared to Rs 516 billion during FY17, a growth of 10.3%.
• Current assets rose 34% and stood at Rs 102 billion, while fixed assets fell 2% and stood at Rs 871 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 974 billion as against Rs 967 billion during FY17, thereby witnessing a growth of 1%.

VODAFONE IDEA Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	245,981	271,823	10.5
Current Liabilities	Rs m	170,615	108,309	-36.5
Long-term Debt	Rs m	516,378	569,408	10.3
Total Liabilities	Rs m	966,678	973,720	0.7
Current assets	Rs m	76,325	102,346	34.1
Fixed Assets	Rs m	890,353	871,374	-2.1
Total Assets	Rs m	966,678	973,720	0.7

VODAFONE IDEA Cash Flow Statement Analysis

• VODAFONE IDEA's cash flow from operating activities (CFO) during FY18 stood at Rs 53 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -93 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs 39 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -459 million from the Rs -6 billion net cash flows seen during FY17.

VODAFONE IDEA 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	104,757	53,324	-49.1%
Cash Flow from Investing Activities	Rs m	-155,557	-92,717	-
Cash Flow from Financing Activities	Rs m	45,061	39,249	-12.9%
Net Cash Flow	Rs m	-5,739	-459	-

Current Valuations for VODAFONE IDEA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -10.3, an decline from the EPS of Rs -2.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 75.8, stands at 1,041.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 9.0 times, while the price to sales ratio stands at 1.2 times.
• The company's price to cash flow (P/CF) ratio stood at 10.5 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	98.7	64.9
TTM Earnings per share	Rs	-2.3	-10.3
Diluted earnings per share	Rs	-0.3	-1.4
Price to Cash Flow	x	39.3	10.5
TTM P/E ratio	x	-552.7	1,041.5
Price / Book Value ratio	x	1.4	1.5
Market Cap	Rs m	349,897	413,046
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for VODAFONE IDEA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.9x during FY18, from 0.4x 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 -0.4x during FY18, from 0.7x 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 -16.5% during FY18, from -3.3% 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 -2.2% during FY18, from 3.6% 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 0.5% during FY18, from 3.3% 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	0.4	0.9
Debtors’ Days	Days	13	11
Interest coverage	x	0.7	-0.4
Debt to equity ratio	x	2.1	2.1
Return on assets	%	3.3	0.5
Return on equity	%	-3.3	-16.5
Return on capital employed	%	3.6	-2.2

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

VODAFONE IDEA Share Price Performance

Over the last one year, VODAFONE IDEA share price has moved down from Rs 85.7 to Rs 75.8, registering a loss of Rs 10.0 or around 11.6%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 6,513.3 (down 0.7%). Over the last one year it has moved up from 5,771.5 to 6,513.3, a gain of 742 points (up 12.9%).

Overall, the S&P BSE SENSEX is up 12.1% over the year.

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

Read: Latest Annual Report Analysis of VODAFONE IDEA