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VEDANTA 2019-20 Annual Report Analysis
Tue, 31 Mar

VEDANTA 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.

VEDANTA Income Statement Analysis

  • Operating income during the year fell 8.3% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 85.9% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 3.9% in FY20 as against 25.4% in FY19.
  • Depreciation charges increased by 11.0% and finance costs decreased by 12.5% YoY, respectively.
  • Other income declined by 38.0% YoY.
  • Net profit for the year declined by 148.9% YoY.
  • Net profit margins during the year declined from 10.5% in FY19 to 5.6% in FY20.

VEDANTA Income Statement 2019-20

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Net Sales Rs m 920,480 844,470 -8.3%
Other income Rs m 40,510 25,100 -38.0%
Total Revenues Rs m 960,990 869,570 -9.5%
Gross profit Rs m 233,900 33,010 -85.9%
Depreciation Rs m 81,920 90,930 11.0%
Interest Rs m 56,890 49,770 -12.5%
Profit before tax Rs m 135,600 -82,590 -160.9%
Tax Rs m 38,620 -35,160 -191.0%
Profit after tax Rs m 96,980 -47,430 -148.9%
Gross profit margin % 25.4 3.9
Effective tax rate % 28.5 42.6
Net profit margin % 10.5 -5.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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VEDANTA Balance Sheet Analysis

  • The company's current liabilities during FY20 down at Rs 633 billion as compared to Rs 766 billion in FY19, thereby witnessing an decrease of -17.4%.
  • Long-term debt stood at Rs 367 billion as compared to Rs 347 billion during FY19, a growth of 5.8%.
  • Current assets fell 4% and stood at Rs 575 billion, while fixed assets fell 14% and stood at Rs 1,192 billion in FY20.
  • Overall, the total assets and liabilities for FY20 stood at Rs 1,767 billion as against Rs 1,986 billion during FY19, thereby witnessing a fall of 11%.

VEDANTA Balance Sheet as on March 2020

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Networth Rs m 620,480 543,860 -12.3
 
Current Liabilities Rs m 766,410 633,220 -17.4
Long-term Debt Rs m 347,210 367,240 5.8
Total Liabilities Rs m 1,985,680 1,767,330 -11.0
 
Current assets Rs m 598,280 575,200 -3.9
Fixed Assets Rs m 1,387,400 1,192,130 -14.1
Total Assets Rs m 1,985,680 1,767,330 -11.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



VEDANTA Cash Flow Statement Analysis

  • VEDANTA's cash flow from operating activities (CFO) during FY20 stood at Rs 193 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY20 stood at Rs -59 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY20 stood at Rs -155 billion on a YoY basis.
  • Overall, net cash flows for the company during FY20 stood at Rs -22 billion from the Rs 29 billion net cash flows seen during FY19.

VEDANTA 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 237,540 193,000 -18.8%
Cash Flow from Investing Activities Rs m -105,300 -58,940 -
Cash Flow from Financing Activities Rs m -102,420 -155,470 -
Net Cash Flow Rs m 29,180 -21,720 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for VEDANTA

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs -12.8, an decline from the EPS of Rs 26.1 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 64.8, stands at -5.7 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 0.4 times, while the price to sales ratio stands at 0.3 times.
  • The company's price to cash flow (P/CF) ratio stood at 11.3 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 247.4 227.0
TTM Earnings per share Rs 26.1 -12.8
Diluted earnings per share Rs 26.1 -12.8
Price to Cash Flow x 3.8 11.3
TTM P/E ratio x 5.0 -5.7
Price / Book Value ratio x 1.4 0.9
Market Cap Rs m 854,484 491,040
Dividends per share (Unadj.) Rs 18.9 3.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for VEDANTA

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 0.9x during FY20, from 0.8x 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 -0.7x during FY20, from 3.4x 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 -8.7% during FY20, from 15.6% 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 -3.6% during FY20, from 19.9% 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 0.1% during FY20, from 7.7% 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 0.8 0.9
Debtors’ Days Days 2 1
Interest coverage x 3.4 -0.7
Debt to equity ratio x 0.6 0.7
Return on assets % 7.7 0.1
Return on equity % 15.6 -8.7
Return on capital employed % 19.9 -3.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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

VEDANTA Share Price Performance

Over the last one year, VEDANTA share price has moved down from Rs 183.8 to Rs 64.8, registering a loss of Rs 119.0 or around 64.8%.

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

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

Annual Report FAQs

What is the current share price of VEDANTA?

VEDANTA currently trades at Rs 273.4 per share. You can check out the latest share price performance of VEDANTA here...

What was the revenue of VEDANTA in FY20? How does it compare to earlier years?

The revenues of VEDANTA stood at Rs 869,570 m in FY20, which was down -9.5% compared to Rs 960,990 m reported in FY19.

VEDANTA's revenue has grown from Rs 650,617 m in FY16 to Rs 869,570 m in FY20.

Over the past 5 years, the revenue of VEDANTA has grown at a CAGR of 7.5%.

What was the net profit of VEDANTA in FY20? How does it compare to earlier years?

The net loss of VEDANTA stood at Rs -47,430 m in FY20, which was down -148.9% compared to Rs 96,980 m reported in FY19.

This compares to a net profit of Rs 136,920 m in FY18 and a net profit of Rs 113,190 m in FY17.

Over the past 5 years, VEDANTA net profit has grown at a CAGR of -28.2%.

What does the cash flow statement of VEDANTA reveal?

The cash flow statement is the financial statement that presents the cash inflows and outflows of a company during a given period of time.

This statement is one of the most useful tools for judging a company's liquidity position. The ratios and parameters in this statement helps test a company's financial health.

The cash flow statement of VEDANTA reveals:

  • Cash flow from operations decreased in FY20 and stood at Rs 193,000 m as compared to Rs 237,540 m in FY19.
  • Cash flow from investments increased in FY20 and stood at Rs -58,940 m as compared to Rs -105,300 m in FY19.
  • Cash flow from financial activity decreased in FY20 and stood at Rs -155,470 m as compared to Rs -102,420 m in FY19.

Here's the cash flow statement of VEDANTA for the past 5 years.

(Rs m)FY16FY17FY18FY19FY20
From Operations203,769180,830173,660237,540193,000
From Investments-78,62827,110153,960-105,300-58,940
From Financial Activity-113,030-124,250-392,550-102,420-155,470
Net Cashflow12,06183,390-64,09029,180-21,720

What does the Key Ratio analysis of VEDANTA reveal?

Be it the company's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.

The ratio/financial analysis of VEDANTA reveals:

  • Operating profit margins witnessed a fall and stood at 3.9% in FY20 as against 25.4% in FY19.
  • Net profit margins declined from 10.5% in FY19 to 5.6% in FY20.
  • Debt to Equity ratio for FY20 stood at 0.7 as compared to 0.6 in FY19.

Here's the ratio/financial analysis of VEDANTA for the past 5 years.

 FY16FY17FY18FY19FY20
Operating Profit Margin (%)-30.931.130.625.43.9
Net Profit Margin (%)-29.516.615.110.5-5.6
Debt to Equity Ratio (x)1.10.50.40.60.7

Read: Latest Annual Report Analysis of VEDANTA

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