VARDHMAN TEXTILES 2017-18 Annual Report Analysis

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VARDHMAN TEXTILES 2017-18 Annual Report Analysis
Tue, 18 Dec

VARDHMAN TEXTILES 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.

VARDHMAN TEXTILES Income Statement Analysis

  • Operating income during the year rose 4.2% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 24.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 14.5% in FY18 as against 20.0% in FY17.
  • Depreciation charges decreased by 30.1% and finance costs decreased by 8.2% YoY, respectively.
  • Other income declined by 64.4% YoY.
  • Net profit for the year declined by 40.4% YoY.
  • Net profit margins during the year declined from 15.2% in FY17 to 9.2% in FY18.

VARDHMAN TEXTILES Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 59,975 62,483 4.2%
Other income Rs m 5,539 1,974 -64.4%
Total Revenues Rs m 65,513 64,456 -1.6%
Gross profit Rs m 11,993 9,030 -24.7%
Depreciation Rs m 3,434 2,400 -30.1%
Interest Rs m 1,287 1,182 -8.2%
Profit before tax Rs m 12,811 7,421 -42.1%
Tax Rs m 3,237 1,672 -48.3%
Profit after tax Rs m 9,943 5,924 -40.4%
Gross profit margin % 20.0 14.5
Effective tax rate % 25.3 22.5
Net profit margin % 15.2 9.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



VARDHMAN TEXTILES Balance Sheet Analysis

  • The company's current liabilities during FY18 down at Rs 17 billion as compared to Rs 21 billion in FY17, thereby witnessing an decrease of -19.2%.
  • Long-term debt stood at Rs 12 billion as compared to Rs 7 billion during FY17, a growth of 62.9%.
  • Current assets rose 18% and stood at Rs 45 billion, while fixed assets rose 4% and stood at Rs 27 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 82 billion as against Rs 75 billion during FY17, thereby witnessing a growth of 10%.

VARDHMAN TEXTILES Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 42,732 49,537 15.9
 
Current Liabilities Rs m 20,860 16,857 -19.2
Long-term Debt Rs m 7,427 12,098 62.9
Total Liabilities Rs m 75,011 82,441 9.9
 
Current assets Rs m 38,384 45,456 18.4
Fixed Assets Rs m 26,203 27,203 3.8
Total Assets Rs m 75,011 82,441 9.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



VARDHMAN TEXTILES Cash Flow Statement Analysis

  • VARDHMAN TEXTILES's cash flow from operating activities (CFO) during FY18 stood at Rs 1 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -2 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs 921 million, an improvement of 108% on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs 281 million from the Rs -2 billion net cash flows seen during FY17.

VARDHMAN TEXTILES 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 13,503 1,023 -92.4%
Cash Flow from Investing Activities Rs m -3,432 -1,663 -
Cash Flow from Financing Activities Rs m -11,802 921 -
Net Cash Flow Rs m -1,731 281 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for VARDHMAN TEXTILES

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 105.0, an decline from the EPS of Rs 181.1 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 1,070.0, stands at 10.6 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.5 times, while the price to sales ratio stands at 1.2 times.
  • The company's price to cash flow (P/CF) ratio stood at 8.4 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 1,092.2 1,107.3
TTM Earnings per share Rs 181.1 105.0
Diluted earnings per share Rs 156.2 93.1
Price to Cash Flow x 4.5 8.4
TTM P/E ratio x 9.1 10.6
Price / Book Value ratio x 1.4 1.5
Market Cap Rs m 58,754 68,106
Dividends per share (Unadj.) Rs 15.0 15.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for VARDHMAN TEXTILES

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 2.7x during FY18, from 1.8x 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 7.3x during FY18, from 11.0x 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 12.0% during FY18, from 23.3% 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 14.2% during FY18, from 28.8% 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 8.6% during FY18, from 15.0% 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 1.8 2.7
Debtors’ Days Days 45 44
Interest coverage x 11.0 7.3
Debt to equity ratio x 0.2 0.2
Return on assets % 15.0 8.6
Return on equity % 23.3 12.0
Return on capital employed % 28.8 14.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

VARDHMAN TEXTILES Share Price Performance

Over the last one year, VARDHMAN TEXTILES share price has moved up from Rs 1,315.3 to Rs 1,070.0, registering a loss of Rs 245.3 or around 18.6%.

Overall, the S&P BSE SENSEX is up 7.4% over the year.

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

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Nov 12, 2019 | Updated on Nov 12, 2019

For the quarter ended September 2019, VARDHMAN TEXTILES has posted a net profit of Rs 1 bn (down 40.1% YoY). Sales on the other hand came in at Rs 17 bn (down 1.3% YoY). Read on for a complete analysis of VARDHMAN TEXTILES's quarterly results.

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