WELSPUN ENTERPRISES 2020-21 Annual Report Analysis

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WELSPUN ENTERPRISES 2020-21 Annual Report Analysis
Mon, 1 Nov

WELSPUN ENTERPRISES has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

WELSPUN ENTERPRISES Income Statement Analysis

  • Operating income during the year fell 15.4% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 18.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 11.2% in FY21 as against 11.6% in FY20.
  • Depreciation charges decreased by 29.1% and finance costs increased by 42.8% YoY, respectively.
  • Other income grew by 27.0% YoY.
  • Net profit for the year declined by 19.1% YoY.
  • Net profit margins during the year declined from 8.9% in FY20 to 8.2% in FY21.

WELSPUN ENTERPRISES Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 18,076 15,295 -15.4%
Other income Rs m 1,118 1,420 27.0%
Total Revenues Rs m 19,194 16,715 -12.9%
Gross profit Rs m 2,096 1,714 -18.2%
Depreciation Rs m 225 160 -29.1%
Interest Rs m 774 1,105 42.8%
Profit before tax Rs m 2,215 1,870 -15.6%
Tax Rs m 516 495 -4.0%
Profit after tax Rs m 1,699 1,374 -19.1%
Gross profit margin % 11.6 11.2
Effective tax rate % 23.3 26.5
Net profit margin % 8.9 8.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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WELSPUN ENTERPRISES Balance Sheet Analysis

  • The company's current liabilities during FY21 down at Rs 10 billion as compared to Rs 10 billion in FY20, thereby witnessing an decrease of -1.1%.
  • Long-term debt stood at Rs 20 billion as compared to Rs 5 billion during FY20, a growth of 327.8%.
  • Current assets fell 6% and stood at Rs 13 billion, while fixed assets rose 106% and stood at Rs 35 billion in FY21.
  • Overall, the total assets and liabilities for FY21 stood at Rs 48 billion as against Rs 31 billion during FY20, thereby witnessing a growth of 54%.

WELSPUN ENTERPRISES Balance Sheet as on March 2021

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Networth Rs m 15,592 16,646 6.8
 
Current Liabilities Rs m 10,249 10,140 -1.1
Long-term Debt Rs m 4,778 20,438 327.8
Total Liabilities Rs m 31,008 47,829 54.2
 
Current assets Rs m 14,248 13,325 -6.5
Fixed Assets Rs m 16,761 34,504 105.9
Total Assets Rs m 31,008 47,829 54.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



WELSPUN ENTERPRISES Cash Flow Statement Analysis

  • WELSPUN ENTERPRISES's cash flow from operating activities (CFO) during FY21 stood at Rs 87 million on a YoY basis.
  • Cash flow from investing activities (CFI) during FY21 stood at Rs -9 billion, an improvement of 1,378.4% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY21 stood at Rs 8 billion, an improvement of 611% on a YoY basis.
  • Overall, net cash flows for the company during FY21 stood at Rs -2 billion from the Rs -15 million net cash flows seen during FY20.

WELSPUN ENTERPRISES Cash Flow Statement 2020-21

Particulars No. of months 12 12 % Change
Year Ending Mar-20 Mar-21
Cash Flow from Operating Activities Rs m -579 87 -
Cash Flow from Investing Activities Rs m -621 -9,175 -
Cash Flow from Financing Activities Rs m 1,060 7,531 610.8%
Net Cash Flow Rs m -15 -1,557 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for WELSPUN ENTERPRISES

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 9.2, an decline from the EPS of Rs 11.4 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 97.9, stands at 10.8 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 0.8 times, while the price to sales ratio stands at 0.8 times.
  • The company's price to cash flow (P/CF) ratio stood at 9.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-20* 12 Mar-21*
Sales per share (Unadj.) Rs 121.8 102.7
TTM Earnings per share Rs 11.4 9.2
Diluted earnings per share Rs 11.4 9.2
Price to Cash Flow x 7.6 9.5
TTM P/E ratio x 10.8 10.8
Price / Book Value ratio x 0.8 0.8
Market Cap Rs m 14,534 14,584
Dividends per share (Unadj.) Rs 2.0 1.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for WELSPUN ENTERPRISES

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 1.3x during FY21, from 1.4x during FY20. 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 2.7x during FY21, from 3.9x during FY20. 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 FY21, from 10.9% during FY21. 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 8.0% during FY21, from 14.7% during FY20. 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 5.2% during FY21, from 8.0% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-20* 12 Mar-21*
Current ratio x 1.4 1.3
Debtors’ Days Days 377 321
Interest coverage x 3.9 2.7
Debt to equity ratio x 0.3 1.2
Return on assets % 8.0 5.2
Return on equity % 10.9 8.3
Return on capital employed % 14.7 8.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



To see how WELSPUN ENTERPRISES has performed over the last 5 years, please visit here.

WELSPUN ENTERPRISES Share Price Performance

Over the last one year, WELSPUN ENTERPRISES share price has moved up from Rs 75.1 to Rs 97.9, registering a gain of Rs 22.9 or around 30.4%.

Meanwhile, the S&P BSE REALTY Index is trading at Rs 3,985.3 (up 0.5%). Over the last one year it has moved up from 1,804.1 to 3,985.3, a gain of 2,181 points (up 120.9%).

Overall, the S&P BSE SENSEX is up 48.6% over the year.

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

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