VINATI ORGANICS 2019-20 Annual Report Analysis

Tue, 31 Mar

VINATI ORGANICS 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.

VINATI ORGANICS Income Statement Analysis

• Operating income during the year fell 8.8% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 2.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 40.3% in FY20 as against 37.6% in FY19.
• Depreciation charges increased by 21.1% and finance costs decreased by 6.5% YoY, respectively.
• Other income grew by 49.1% YoY.
• Net profit for the year grew by 18.2% YoY.
• Net profit margins during the year grew from 25.0% in FY19 to 32.4% in FY20.

VINATI ORGANICS Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	11,279	10,289	-8.8%
Other income	Rs m	302	450	49.1%
Total Revenues	Rs m	11,581	10,739	-7.3%
Gross profit	Rs m	4,246	4,149	-2.3%
Depreciation	Rs m	274	332	21.1%
Interest	Rs m	22	20	-6.5%
Profit before tax	Rs m	4,252	4,247	-0.1%
Tax	Rs m	1,428	908	-36.4%
Profit after tax	Rs m	2,825	3,338	18.2%
Gross profit margin	%	37.6	40.3
Effective tax rate	%	33.6	21.4
Net profit margin	%	25.0	32.4

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VINATI ORGANICS Balance Sheet Analysis

• The company's current liabilities during FY20 stood at Rs 890 million as compared to Rs 888 million in FY19, thereby witnessing an increase of 0.2%.
• Current assets rose 21% and stood at Rs 6 billion, while fixed assets rose 15% and stood at Rs 8 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 14 billion as against Rs 12 billion during FY19, thereby witnessing a growth of 18%.

VINATI ORGANICS Balance Sheet as on March 2020

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Networth	Rs m	10,513	12,794	21.7
Current Liabilities	Rs m	888	890	0.2
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	12,276	14,430	17.5
Current assets	Rs m	5,311	6,426	21.0
Fixed Assets	Rs m	6,965	8,004	14.9
Total Assets	Rs m	12,276	14,430	17.5

VINATI ORGANICS Cash Flow Statement Analysis

• VINATI ORGANICS's cash flow from operating activities (CFO) during FY20 stood at Rs 4 billion, an improvement of 107.6% on a YoY basis.
• Cash flow from investing activities (CFI) during FY20 stood at Rs -2 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY20 stood at Rs -1 billion on a YoY basis.
• Overall, net cash flows for the company during FY20 stood at Rs 1 billion from the Rs -826 million net cash flows seen during FY19.

VINATI ORGANICS 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	2,004	4,159	107.6%
Cash Flow from Investing Activities	Rs m	-2,427	-1,975	-
Cash Flow from Financing Activities	Rs m	-403	-1,091	-
Net Cash Flow	Rs m	-826	1,094	-

Current Valuations for VINATI ORGANICS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 32.5, an decline from the EPS of Rs 55.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 769.4, stands at 23.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.2 times, while the price to sales ratio stands at 7.7 times.
• The company's price to cash flow (P/CF) ratio stood at 44.3 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	219.5	100.1
TTM Earnings per share	Rs	55.0	32.5
Diluted earnings per share	Rs	27.5	32.5
Price to Cash Flow	x	54.5	44.3
TTM P/E ratio	x	59.8	23.7
Price / Book Value ratio	x	6.3	12.7
Market Cap	Rs m	66,706	162,498
Dividends per share (Unadj.)	Rs	3.5	5.5

Ratio Analysis for VINATI ORGANICS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 7.2x during FY20, from 6.0x 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 improved and stood at 209.6x during FY20, from 196.2x 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 26.1% during FY20, from 26.9% 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 33.4% during FY20, from 40.7% 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 improved and stood at 23.3% during FY20, from 23.2% 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	6.0	7.2
Debtors’ Days	Days	790	716
Interest coverage	x	196.2	209.6
Debt to equity ratio	x	0.0	0.0
Return on assets	%	23.2	23.3
Return on equity	%	26.9	26.1
Return on capital employed	%	40.7	33.4

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

VINATI ORGANICS Share Price Performance

Over the last one year, VINATI ORGANICS share price has moved down from Rs 1,643.9 to Rs 769.4, registering a loss of Rs 874.5 or around 53.2%.

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

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

Read: Latest Annual Report Analysis of VINATI ORGANICS