RAYMOND 2019-20 Annual Report Analysis

Tue, 31 Mar

RAYMOND has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

RAYMOND Income Statement Analysis

• Operating income during the year fell 1.5% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 2.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 8.5% in FY20 as against 8.6% in FY19.
• Depreciation charges increased by 72.9% and finance costs increased by 30.1% YoY, respectively.
• Other income declined by 26.1% YoY.
• Net profit for the year declined by 72.6% YoY.
• Net profit margins during the year declined from 2.8% in FY19 to 0.8% in FY20.

RAYMOND Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	65,823	64,824	-1.5%
Other income	Rs m	1,299	959	-26.1%
Total Revenues	Rs m	67,121	65,783	-2.0%
Gross profit	Rs m	5,676	5,539	-2.4%
Depreciation	Rs m	1,965	3,398	72.9%
Interest	Rs m	2,326	3,027	30.1%
Profit before tax	Rs m	2,684	73	-97.3%
Tax	Rs m	856	-428	-150.0%
Profit after tax	Rs m	1,828	502	-72.6%
Gross profit margin	%	8.6	8.5
Effective tax rate	%	31.9	-586.2
Net profit margin	%	2.8	0.8

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RAYMOND Balance Sheet Analysis

• The company's current liabilities during FY20 stood at Rs 43 billion as compared to Rs 41 billion in FY19, thereby witnessing an increase of 3.4%.
• Long-term debt down at Rs 4 billion as compared to Rs 4 billion during FY19, a fall of 5.9%.
• Current assets rose 10% and stood at Rs 44 billion, while fixed assets rose 23% and stood at Rs 32 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 76 billion as against Rs 66 billion during FY19, thereby witnessing a growth of 15%.

RAYMOND Balance Sheet as on March 2020

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Networth	Rs m	19,538	23,753	21.6
Current Liabilities	Rs m	41,337	42,748	3.4
Long-term Debt	Rs m	4,113	3,869	-5.9
Total Liabilities	Rs m	65,967	75,669	14.7
Current assets	Rs m	40,179	44,068	9.7
Fixed Assets	Rs m	25,788	31,601	22.5
Total Assets	Rs m	65,967	75,669	14.7

RAYMOND Cash Flow Statement Analysis

• RAYMOND's cash flow from operating activities (CFO) during FY20 stood at Rs 4 billion, an improvement of 55.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY20 stood at Rs -1 billion, an improvement of 11.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY20 stood at Rs -1 billion, an improvement of 13% on a YoY basis.
• Overall, net cash flows for the company during FY20 stood at Rs 1 billion from the Rs -248 million net cash flows seen during FY19.

RAYMOND Cash Flow Statement 2019-20

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-19	Mar-20
Cash Flow from Operating Activities	Rs m	2,507	3,905	55.7%
Cash Flow from Investing Activities	Rs m	-1,226	-1,369	-
Cash Flow from Financing Activities	Rs m	-1,488	-1,299	-
Net Cash Flow	Rs m	-248	1,126	-

Current Valuations for RAYMOND

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 7.7, an decline from the EPS of Rs 29.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 223.0, stands at 29.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.6 times, while the price to sales ratio stands at 0.2 times.
• The company's price to cash flow (P/CF) ratio stood at 8.9 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Sales per share (Unadj.)	Rs	1,072.4	1,001.6
TTM Earnings per share	Rs	29.8	7.7
Diluted earnings per share	Rs	27.5	7.5
Price to Cash Flow	x	14.2	8.9
TTM P/E ratio	x	29.3	29.6
Price / Book Value ratio	x	2.7	1.5
Market Cap	Rs m	53,564	34,893
Dividends per share (Unadj.)	Rs	3.0	0.0

Ratio Analysis for RAYMOND

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.0x during FY20, from 1.0x during FY19. 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 1.0x during FY20, from 2.2x during FY19. 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 2.1% during FY20, from 9.4% during FY20. 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 11.2% during FY20, from 21.2% during FY19. 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 4.7% during FY20, from 6.3% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Current ratio	x	1.0	1.0
Debtors’ Days	Days	698	653
Interest coverage	x	2.2	1.0
Debt to equity ratio	x	0.2	0.2
Return on assets	%	6.3	4.7
Return on equity	%	9.4	2.1
Return on capital employed	%	21.2	11.2

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

RAYMOND Share Price Performance

Over the last one year, RAYMOND share price has moved down from Rs 809.5 to Rs 223.0, registering a loss of Rs 586.5 or around 72.5%.

Overall, the S&P BSE SENSEX is down 24.2% over the year.

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

Read: Latest Annual Report Analysis of RAYMOND