V2 RETAIL 2020-21 Annual Report Analysis

Wed, 31 Mar

V2 RETAIL 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.

V2 RETAIL Income Statement Analysis

• Operating income during the year fell 23.2% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 44.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 9.3% in FY21 as against 12.8% in FY20.
• Depreciation charges increased by 8.9% and finance costs decreased by 0.4% YoY, respectively.
• Other income grew by 827.9% YoY.
• Net profit for the year declined by 246.2% YoY.
• Net profit margins during the year declined from 1.3% in FY20 to 2.4% in FY21.

V2 RETAIL Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	7,012	5,386	-23.2%
Other income	Rs m	25	230	827.9%
Total Revenues	Rs m	7,037	5,616	-20.2%
Gross profit	Rs m	900	499	-44.5%
Depreciation	Rs m	510	555	8.9%
Interest	Rs m	328	327	-0.4%
Profit before tax	Rs m	87	-153	-276.3%
Tax	Rs m	-1	-24	2,105.4%
Profit after tax	Rs m	88	-128	-246.2%
Gross profit margin	%	12.8	9.3
Effective tax rate	%	-1.3	16.0
Net profit margin	%	1.3	-2.4

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V2 RETAIL Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 2 billion as compared to Rs 2 billion in FY20, thereby witnessing an increase of 42.1%.
• Long-term debt down at Rs 1 million as compared to Rs 49 million during FY20, a fall of 97.6%.
• Current assets rose 18% and stood at Rs 4 billion, while fixed assets rose 9% and stood at Rs 4 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 8 billion as against Rs 7 billion during FY20, thereby witnessing a growth of 13%.

V2 RETAIL Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	2,778	2,649	-4.6
Current Liabilities	Rs m	1,631	2,319	42.1
Long-term Debt	Rs m	49	1	-97.6
Total Liabilities	Rs m	6,989	7,889	12.9
Current assets	Rs m	3,079	3,628	17.8
Fixed Assets	Rs m	3,910	4,261	9.0
Total Assets	Rs m	6,989	7,889	12.9

V2 RETAIL Cash Flow Statement Analysis

• V2 RETAIL's cash flow from operating activities (CFO) during FY21 stood at Rs 34 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -203 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -216 million, an improvement of 24% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -386 million from the Rs 522 million net cash flows seen during FY20.

V2 RETAIL 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	741	34	-95.4%
Cash Flow from Investing Activities	Rs m	65	-203	-
Cash Flow from Financing Activities	Rs m	-284	-216	-
Net Cash Flow	Rs m	522	-386	-

Current Valuations for V2 RETAIL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -3.8, an decline from the EPS of Rs 2.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 125.9, stands at -33.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.6 times, while the price to sales ratio stands at 0.8 times.
• The company's price to cash flow (P/CF) ratio stood at 7.9 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	205.6	157.9
TTM Earnings per share	Rs	2.6	-3.8
Diluted earnings per share	Rs	2.6	-3.7
Price to Cash Flow	x	3.0	7.9
TTM P/E ratio	x	18.4	-33.7
Price / Book Value ratio	x	2.0	1.3
Market Cap	Rs m	5,604	3,383
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for V2 RETAIL

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.6x during FY21, from 1.9x 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 0.5x during FY21, from 1.3x 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 -4.8% during FY21, from 3.2% 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 6.6% during FY21, from 14.7% 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 2.5% during FY21, from 5.9% 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	1.9	1.6
Debtors’ Days	Days	0	4
Interest coverage	x	1.3	0.5
Debt to equity ratio	x	0.0	0.0
Return on assets	%	5.9	2.5
Return on equity	%	3.2	-4.8
Return on capital employed	%	14.7	6.6

To see how V2 RETAIL has performed over the last 5 years, please visit here.

V2 RETAIL Share Price Performance

Over the last one year, V2 RETAIL share price has moved up from Rs 51.7 to Rs 125.9, registering a gain of Rs 74.2 or around 143.7%.

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

(To know more, check out historical annual results for V2 RETAIL and quarterly results for V2 RETAIL)

Read: Latest Annual Report Analysis of V2 RETAIL