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VARDHMAN TEXTILES 2021-22 Annual Report Analysis

Tue, 11 Oct

VARDHMAN TEXTILES has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

VARDHMAN TEXTILES Income Statement Analysis

• Operating income during the year rose 56.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 177.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 24.0% in FY22 as against 13.6% in FY21.
• Depreciation charges increased by 1.0% and finance costs decreased by 12.0% YoY, respectively.
• Other income grew by 11.4% YoY.
• Net profit for the year grew by 263.4% YoY.
• Net profit margins during the year grew from 7.0% in FY21 to 16.1% in FY22.

VARDHMAN TEXTILES Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	61,399	96,223	56.7%
Other income	Rs m	2,016	2,245	11.4%
Total Revenues	Rs m	63,414	98,469	55.3%
Gross profit	Rs m	8,345	23,136	177.3%
Depreciation	Rs m	3,638	3,675	1.0%
Interest	Rs m	1,133	997	-12.0%
Profit before tax	Rs m	5,589	20,709	270.5%
Tax	Rs m	1,320	5,197	293.7%
Profit after tax	Rs m	4,269	15,512	263.4%
Gross profit margin	%	13.6	24.0
Effective tax rate	%	23.6	25.1
Net profit margin	%	7.0	16.1

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VARDHMAN TEXTILES Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 19 billion as compared to Rs 14 billion in FY21, thereby witnessing an increase of 35.5%.
• Long-term debt down at Rs 9 billion as compared to Rs 13 billion during FY21, a fall of 29.0%.
• Current assets rose 13% and stood at Rs 59 billion, while fixed assets rose 16% and stood at Rs 51 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 110 billion as against Rs 96 billion during FY21, thereby witnessing a growth of 14%.

VARDHMAN TEXTILES Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	64,503	76,985	19.4
Current Liabilities	Rs m	14,238	19,297	35.5
Long-term Debt	Rs m	12,966	9,211	-29.0
Total Liabilities	Rs m	96,169	109,791	14.2
Current assets	Rs m	52,022	58,553	12.6
Fixed Assets	Rs m	44,147	51,238	16.1
Total Assets	Rs m	96,169	109,791	14.2

VARDHMAN TEXTILES Cash Flow Statement Analysis

• VARDHMAN TEXTILES's cash flow from operating activities (CFO) during FY22 stood at Rs 14 billion, an improvement of 761.5% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -9 billion, an improvement of 675.9% on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -6 billion on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -260 million from the Rs -1 billion net cash flows seen during FY21.

VARDHMAN TEXTILES Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	1,677	14,446	761.5%
Cash Flow from Investing Activities	Rs m	-1,159	-8,992	-
Cash Flow from Financing Activities	Rs m	-1,740	-5,714	-
Net Cash Flow	Rs m	-1,222	-260	-

Current Valuations for VARDHMAN TEXTILES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 54.6, an decline from the EPS of Rs 75.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 353.4, stands at 6.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.3 times, while the price to sales ratio stands at 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 24.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	1,085.5	338.6
TTM Earnings per share	Rs	75.5	54.6
Diluted earnings per share	Rs	14.8	53.7
Price to Cash Flow	x	47.5	24.5
TTM P/E ratio	x	92.5	6.7
Price / Book Value ratio	x	0.8	6.1
Market Cap	Rs m	54,247	470,866
Dividends per share (Unadj.)	Rs	3.5	6.8

Ratio Analysis for VARDHMAN TEXTILES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 3.0x during FY22, from 3.7x during FY21. 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 21.8x during FY22, from 5.9x during FY21. 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 20.1% during FY22, from 6.6% during FY22. 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 25.2% during FY22, from 8.7% during FY21. 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 15.0% during FY22, from 5.6% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	3.7	3.0
Debtors’ Days	Days	6	5
Interest coverage	x	5.9	21.8
Debt to equity ratio	x	0.2	0.1
Return on assets	%	5.6	15.0
Return on equity	%	6.6	20.1
Return on capital employed	%	8.7	25.2

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 down from Rs 1,955.8 to Rs 353.4, registering a loss of Rs 1,602.4 or around 81.9%.

Overall, the S&P BSE SENSEX is down 3.2% over the year.

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