VEDANTA 2021-22 Annual Report Analysis

Wed, 20 Jul

VEDANTA 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.

VEDANTA Income Statement Analysis

• Operating income during the year rose 50.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 65.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 33.2% in FY22 as against 30.3% in FY21.
• Depreciation charges increased by 16.5% and finance costs decreased by 7.9% YoY, respectively.
• Other income declined by 24.0% YoY.
• Net profit for the year grew by 57.7% YoY.
• Net profit margins during the year grew from 17.1% in FY21 to 17.9% in FY22.

VEDANTA Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	880,210	1,327,320	50.8%
Other income	Rs m	34,210	26,000	-24.0%
Total Revenues	Rs m	914,420	1,353,320	48.0%
Gross profit	Rs m	266,400	440,560	65.4%
Depreciation	Rs m	76,380	88,950	16.5%
Interest	Rs m	52,100	47,970	-7.9%
Profit before tax	Rs m	172,130	329,640	91.5%
Tax	Rs m	21,800	92,550	324.5%
Profit after tax	Rs m	150,330	237,090	57.7%
Gross profit margin	%	30.3	33.2
Effective tax rate	%	12.7	28.1
Net profit margin	%	17.1	17.9

Don't Miss: Best Chance to Access Midcap Stocks Research at 80% OFF

VEDANTA Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 657 billion as compared to Rs 591 billion in FY21, thereby witnessing an increase of 11.1%.
• Long-term debt down at Rs 362 billion as compared to Rs 380 billion during FY21, a fall of 4.6%.
• Current assets rose 22% and stood at Rs 686 billion, while fixed assets rose 1% and stood at Rs 1,249 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 1,935 billion as against Rs 1,799 billion during FY21, thereby witnessing a growth of 8%.

VEDANTA Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	621,070	652,470	5.1
Current Liabilities	Rs m	591,380	657,130	11.1
Long-term Debt	Rs m	379,620	362,050	-4.6
Total Liabilities	Rs m	1,798,510	1,935,150	7.6
Current assets	Rs m	562,060	685,750	22.0
Fixed Assets	Rs m	1,236,450	1,249,400	1.0
Total Assets	Rs m	1,798,510	1,935,150	7.6

VEDANTA Cash Flow Statement Analysis

• VEDANTA's cash flow from operating activities (CFO) during FY22 stood at Rs 350 billion, an improvement of 45.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -23 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -289 billion on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 38 billion from the Rs -3 billion net cash flows seen during FY21.

VEDANTA 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	239,800	349,630	45.8%
Cash Flow from Investing Activities	Rs m	-67,500	-22,530	-
Cash Flow from Financing Activities	Rs m	-175,650	-289,030	-
Net Cash Flow	Rs m	-2,630	38,170	-

Current Valuations for VEDANTA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 63.7, an improvement from the EPS of Rs 40.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 254.6, stands at 4.0 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 0.7 times.
• The company's price to cash flow (P/CF) ratio stood at 3.6 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	236.6	356.8
TTM Earnings per share	Rs	40.4	63.7
Diluted earnings per share	Rs	40.4	63.8
Price to Cash Flow	x	3.7	3.6
TTM P/E ratio	x	5.7	4.0
Price / Book Value ratio	x	0.9	1.8
Market Cap	Rs m	545,352	1,167,336
Dividends per share (Unadj.)	Rs	9.5	45.0

Ratio Analysis for VEDANTA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.0x during FY22, from 1.0x 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 7.9x during FY22, from 4.3x 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 36.3% during FY22, from 24.2% 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 37.2% during FY22, from 22.4% 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 14.7% during FY22, from 11.3% 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	1.0	1.0
Debtors’ Days	Days	1	1
Interest coverage	x	4.3	7.9
Debt to equity ratio	x	0.6	0.6
Return on assets	%	11.3	14.7
Return on equity	%	24.2	36.3
Return on capital employed	%	22.4	37.2

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 256.3 to Rs 254.6, registering a loss of Rs 1.8 or around 0.7%.

Overall, the S&P BSE SENSEX is up 5.7% over the year.

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

Read: Latest Annual Report Analysis of VEDANTA