VOLTAS 2017-18 Annual Report Analysis

Sat, 31 Mar

VOLTAS has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

VOLTAS Income Statement Analysis

• Operating income during the year rose 6.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 14.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 10.2% in FY18 as against 9.5% in FY17.
• Depreciation charges decreased by 0.4% and finance costs decreased by 25.7% YoY, respectively.
• Other income declined by 12.7% YoY.
• Net profit for the year grew by 6.5% YoY.
• Net profit margins during the year declined from 9.0% in FY17 to 9.0% in FY18.

VOLTAS Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	59,706	63,809	6.9%
Other income	Rs m	2,120	1,851	-12.7%
Total Revenues	Rs m	61,826	65,660	6.2%
Gross profit	Rs m	5,680	6,523	14.8%
Depreciation	Rs m	245	244	-0.4%
Interest	Rs m	160	119	-25.7%
Profit before tax	Rs m	7,395	8,011	8.3%
Tax	Rs m	2,004	2,270	13.3%
Profit after tax	Rs m	5,391	5,741	6.5%
Gross profit margin	%	9.5	10.2
Effective tax rate	%	27.1	28.3
Net profit margin	%	9.0	9.0

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VOLTAS Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 33 billion as compared to Rs 30 billion in FY17, thereby witnessing an increase of 7.5%.
• Current assets rose 15% and stood at Rs 46 billion, while fixed assets rose 10% and stood at Rs 27 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 73 billion as against Rs 64 billion during FY17, thereby witnessing a growth of 13%.

VOLTAS Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	33,066	39,052	18.1
Current Liabilities	Rs m	30,421	32,712	7.5
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	64,491	72,918	13.1
Current assets	Rs m	39,896	45,975	15.2
Fixed Assets	Rs m	24,595	26,943	9.5
Total Assets	Rs m	64,491	72,918	13.1

VOLTAS Cash Flow Statement Analysis

• VOLTAS's cash flow from operating activities (CFO) during FY18 stood at Rs 3 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -2 billion, an improvement of 171.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -2 billion, an improvement of 14% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -553 million from the Rs 1 billion net cash flows seen during FY17.

VOLTAS Cash Flow Statement 2017-18

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-17	Mar-18
Cash Flow from Operating Activities	Rs m	4,281	3,253	-24.0%
Cash Flow from Investing Activities	Rs m	-733	-1,992	-
Cash Flow from Financing Activities	Rs m	-2,115	-1,814	-
Net Cash Flow	Rs m	1,433	-553	-

Current Valuations for VOLTAS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 17.4, an improvement from the EPS of Rs 16.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 620.6, stands at 35.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.6 times, while the price to sales ratio stands at 2.8 times.
• The company's price to cash flow (P/CF) ratio stood at 29.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Sales per share (Unadj.)	Rs	180.4	192.8
TTM Earnings per share	Rs	16.3	17.4
Diluted earnings per share	Rs	16.3	17.4
Price to Cash Flow	x	24.2	29.8
TTM P/E ratio	x	26.7	35.7
Price / Book Value ratio	x	3.5	4.6
Market Cap	Rs m	114,436	178,066
Dividends per share (Unadj.)	Rs	3.5	4.0

Ratio Analysis for VOLTAS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x during FY18, from 1.3x during FY17. 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 68.2x during FY18, from 47.1x during FY17. 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 14.7% during FY18, from 16.3% during FY18. 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 20.8% during FY18, from 22.8% during FY17. 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 8.0% during FY18, from 8.6% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Current ratio	x	1.3	1.4
Debtors’ Days	Days	9	9
Interest coverage	x	47.1	68.2
Debt to equity ratio	x	0.0	0.0
Return on assets	%	8.6	8.0
Return on equity	%	16.3	14.7
Return on capital employed	%	22.8	20.8

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

VOLTAS Share Price Performance

Over the last one year, VOLTAS share price has moved up from Rs 412.2 to Rs 620.6, registering a gain of Rs 208.5 or around 50.6%.

Meanwhile, the S&P BSE CONSUMER DURABLES Index is trading at Rs 22,261.9 (up 0.2%). Over the last one year it has moved up from 15,257.3 to 22,261.9, a gain of 7,005 points (up 45.9%).

Overall, the S&P BSE SENSEX is up 12.1% over the year.

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

Read: Latest Annual Report Analysis of VOLTAS