VIP INDUSTRIES 2018-19 Annual Report Analysis

Sun, 31 Mar

VIP INDUSTRIES has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

VIP INDUSTRIES Income Statement Analysis

• Operating income during the year rose 27.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 16.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 12.7% in FY19 as against 13.9% in FY18.
• Depreciation charges increased by 29.3% and finance costs increased by 60.8% YoY, respectively.
• Other income declined by 6.1% YoY.
• Net profit for the year grew by 14.6% YoY.
• Net profit margins during the year declined from 9.0% in FY18 to 8.1% in FY19.

VIP INDUSTRIES Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	14,028	17,847	27.2%
Other income	Rs m	97	91	-6.1%
Total Revenues	Rs m	14,126	17,938	27.0%
Gross profit	Rs m	1,951	2,263	16.0%
Depreciation	Rs m	129	166	29.3%
Interest	Rs m	24	39	60.8%
Profit before tax	Rs m	1,895	2,149	13.4%
Tax	Rs m	628	697	11.0%
Profit after tax	Rs m	1,268	1,453	14.6%
Gross profit margin	%	13.9	12.7
Effective tax rate	%	33.1	32.4
Net profit margin	%	9.0	8.1

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VIP INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 5 billion as compared to Rs 3 billion in FY18, thereby witnessing an increase of 74.7%.
• Current assets rose 38% and stood at Rs 9 billion, while fixed assets rose 47% and stood at Rs 2 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 11 billion as against Rs 8 billion during FY18, thereby witnessing a growth of 39%.

VIP INDUSTRIES Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	4,891	5,801	18.6
Current Liabilities	Rs m	2,720	4,753	74.7
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	7,673	10,661	39.0
Current assets	Rs m	6,593	9,073	37.6
Fixed Assets	Rs m	1,080	1,588	47.1
Total Assets	Rs m	7,673	10,661	39.0

VIP INDUSTRIES Cash Flow Statement Analysis

• VIP INDUSTRIES's cash flow from operating activities (CFO) during FY19 stood at Rs -559 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs 159 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs 306 million, an improvement of 170% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -94 million from the Rs 126 million net cash flows seen during FY18.

VIP INDUSTRIES Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	852	-559	-
Cash Flow from Investing Activities	Rs m	-287	159	-
Cash Flow from Financing Activities	Rs m	-440	306	-
Net Cash Flow	Rs m	126	-94	-

Current Valuations for VIP INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 10.3, an improvement from the EPS of Rs 9.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 486.1, stands at 47.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 11.9 times, while the price to sales ratio stands at 3.8 times.
• The company's price to cash flow (P/CF) ratio stood at 41.9 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	99.3	126.3
TTM Earnings per share	Rs	9.0	10.3
Diluted earnings per share	Rs	9.0	10.3
Price to Cash Flow	x	32.1	41.9
TTM P/E ratio	x	35.4	47.3
Price / Book Value ratio	x	8.2	11.7
Market Cap	Rs m	39,873	67,772
Dividends per share (Unadj.)	Rs	3.0	3.2

Ratio Analysis for VIP INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.9x during FY19, from 2.4x during FY18. 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 56.7x during FY19, from 80.0x during FY18. 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 25.0% during FY19, from 25.9% during FY19. 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 37.7% during FY19, from 39.2% during FY18. 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 14.0% during FY19, from 16.8% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	2.4	1.9
Debtors’ Days	Days	5	6
Interest coverage	x	80.0	56.7
Debt to equity ratio	x	0.0	0.0
Return on assets	%	16.8	14.0
Return on equity	%	25.9	25.0
Return on capital employed	%	39.2	37.7

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

VIP INDUSTRIES Share Price Performance

Over the last one year, VIP INDUSTRIES share price has moved up from Rs 316.8 to Rs 486.1, registering a gain of Rs 169.3 or around 53.4%.

Meanwhile, the S&P BSE CONSUMER DURABLES Index is trading at Rs 23,856.7 (up 0.7%). Over the last one year it has moved up from 22,261.9 to 23,856.7, a gain of 1,595 points (up 7.2%).

Overall, the S&P BSE SENSEX is up 16.3% over the year.

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

Read: Latest Annual Report Analysis of VIP INDUSTRIES