V GUARD INDUSTRIES 2020-21 Annual Report Analysis

Wed, 31 Mar

V GUARD INDUSTRIES 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.

V GUARD INDUSTRIES Income Statement Analysis

• Operating income during the year rose 8.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 21.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 11.5% in FY21 as against 10.3% in FY20.
• Depreciation charges increased by 31.5% and finance costs increased by 46.6% YoY, respectively.
• Other income declined by 17.5% YoY.
• Net profit for the year grew by 7.2% YoY.
• Net profit margins during the year declined from 7.5% in FY20 to 7.4% in FY21.

V GUARD INDUSTRIES Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	25,029	27,212	8.7%
Other income	Rs m	251	207	-17.5%
Total Revenues	Rs m	25,281	27,420	8.5%
Gross profit	Rs m	2,580	3,121	21.0%
Depreciation	Rs m	294	386	31.5%
Interest	Rs m	42	61	46.6%
Profit before tax	Rs m	2,496	2,881	15.4%
Tax	Rs m	613	862	40.6%
Profit after tax	Rs m	1,883	2,019	7.2%
Gross profit margin	%	10.3	11.5
Effective tax rate	%	24.6	29.9
Net profit margin	%	7.5	7.4

Emerging Opportunity: Bluechip Bull Run

V GUARD INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 6 billion as compared to Rs 4 billion in FY20, thereby witnessing an increase of 45.0%.
• Current assets rose 32% and stood at Rs 14 billion, while fixed assets rose 20% and stood at Rs 5 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 19 billion as against Rs 15 billion during FY20, thereby witnessing a growth of 29%.

V GUARD INDUSTRIES Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	9,667	11,812	22.2
Current Liabilities	Rs m	4,089	5,927	45.0
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	14,524	18,712	28.8
Current assets	Rs m	10,605	14,010	32.1
Fixed Assets	Rs m	3,920	4,701	19.9
Total Assets	Rs m	14,524	18,712	28.8

V GUARD INDUSTRIES Cash Flow Statement Analysis

• V GUARD INDUSTRIES's cash flow from operating activities (CFO) during FY21 stood at Rs 2 billion, an improvement of 57.9% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs 409 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -57 million, an improvement of 94% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 3 billion from the Rs -619 million net cash flows seen during FY20.

V GUARD INDUSTRIES 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	1,407	2,222	57.9%
Cash Flow from Investing Activities	Rs m	-1,111	409	-
Cash Flow from Financing Activities	Rs m	-915	-57	-
Net Cash Flow	Rs m	-619	2,573	-

Current Valuations for V GUARD INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 4.7, an improvement from the EPS of Rs 4.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 252.1, stands at 53.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 9.2 times, while the price to sales ratio stands at 4.0 times.
• The company's price to cash flow (P/CF) ratio stood at 36.1 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	58.4	63.3
TTM Earnings per share	Rs	4.4	4.7
Diluted earnings per share	Rs	4.4	4.7
Price to Cash Flow	x	30.7	36.1
TTM P/E ratio	x	35.5	53.9
Price / Book Value ratio	x	9.1	7.4
Market Cap	Rs m	87,521	86,898
Dividends per share (Unadj.)	Rs	0.9	1.2

Ratio Analysis for V GUARD INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.4x during FY21, from 2.6x 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 48.2x during FY21, from 61.0x 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 17.1% during FY21, from 19.5% 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 24.9% during FY21, from 26.2% 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 11.1% during FY21, from 13.2% 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	2.6	2.4
Debtors’ Days	Days	473	521
Interest coverage	x	61.0	48.2
Debt to equity ratio	x	0.0	0.0
Return on assets	%	13.2	11.1
Return on equity	%	19.5	17.1
Return on capital employed	%	26.2	24.9

To see how V GUARD INDUSTRIES has performed over the last 5 years, please visit here.

V GUARD INDUSTRIES Share Price Performance

Over the last one year, V GUARD INDUSTRIES share price has moved up from Rs 154.9 to Rs 252.1, registering a gain of Rs 97.3 or around 62.8%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 21,095.8 (down 0.4%). Over the last one year it has moved up from 10,979.5 to 21,095.8, a gain of 10,116 points (up 92.1%).

Overall, the S&P BSE SENSEX is up 74.1% over the year.

(To know more, check out historical annual results for V GUARD INDUSTRIES and quarterly results for V GUARD INDUSTRIES)

Read: Latest Annual Report Analysis of V GUARD INDUSTRIES