VOLTAS 2018-19 Annual Report Analysis

Sun, 31 Mar

VOLTAS 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.

VOLTAS Income Statement Analysis

• Operating income during the year rose 11.6% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 9.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 8.3% in FY19 as against 10.2% in FY18.
• Depreciation charges decreased by 1.5% and finance costs increased by 176.7% YoY, respectively.
• Other income grew by 6.6% YoY.
• Net profit for the year declined by 1.5% YoY.
• Net profit margins during the year declined from 9.0% in FY18 to 7.9% in FY19.

VOLTAS Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	63,809	71,241	11.6%
Other income	Rs m	1,851	1,974	6.6%
Total Revenues	Rs m	65,660	73,215	11.5%
Gross profit	Rs m	6,523	5,888	-9.7%
Depreciation	Rs m	244	240	-1.5%
Interest	Rs m	119	330	176.7%
Profit before tax	Rs m	8,011	7,292	-9.0%
Tax	Rs m	2,270	1,635	-28.0%
Profit after tax	Rs m	5,741	5,657	-1.5%
Gross profit margin	%	10.2	8.3
Effective tax rate	%	28.3	22.4
Net profit margin	%	9.0	7.9

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VOLTAS Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 33 billion as compared to Rs 33 billion in FY18, thereby witnessing an increase of 0.4%.
• Current assets rose 23% and stood at Rs 56 billion, while fixed assets fell 34% and stood at Rs 18 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 74 billion as against Rs 73 billion during FY18, thereby witnessing a growth of 2%.

VOLTAS Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	39,052	41,100	5.2
Current Liabilities	Rs m	32,712	32,853	0.4
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	72,918	74,161	1.7
Current assets	Rs m	45,975	56,472	22.8
Fixed Assets	Rs m	26,943	17,689	-34.3
Total Assets	Rs m	72,918	74,161	1.7

VOLTAS Cash Flow Statement Analysis

• VOLTAS's cash flow from operating activities (CFO) during FY19 stood at Rs -3 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs 4 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -183 million, an improvement of 90% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 531 million from the Rs -553 million net cash flows seen during FY18.

VOLTAS 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	3,253	-3,214	-
Cash Flow from Investing Activities	Rs m	-1,992	3,927	-
Cash Flow from Financing Activities	Rs m	-1,814	-183	-
Net Cash Flow	Rs m	-553	531	-

Current Valuations for VOLTAS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 17.1, an decline from the EPS of Rs 17.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 630.5, stands at 36.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.1 times, while the price to sales ratio stands at 2.9 times.
• The company's price to cash flow (P/CF) ratio stood at 31.9 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	192.8	215.3
TTM Earnings per share	Rs	17.4	17.1
Diluted earnings per share	Rs	17.4	17.1
Price to Cash Flow	x	34.3	31.9
TTM P/E ratio	x	35.7	36.8
Price / Book Value ratio	x	4.6	4.6
Market Cap	Rs m	178,066	187,876
Dividends per share (Unadj.)	Rs	4.0	4.0

Ratio Analysis for VOLTAS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.7x during FY19, from 1.4x 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 23.1x during FY19, from 68.2x 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 13.8% during FY19, from 14.7% 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 18.5% during FY19, from 20.8% 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 improved and stood at 8.1% during FY19, from 8.0% 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	1.4	1.7
Debtors’ Days	Days	9	9
Interest coverage	x	68.2	23.1
Debt to equity ratio	x	0.0	0.0
Return on assets	%	8.0	8.1
Return on equity	%	14.7	13.8
Return on capital employed	%	20.8	18.5

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 620.6 to Rs 630.5, registering a gain of Rs 9.9 or around 1.6%.

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 VOLTAS and quarterly results for VOLTAS)

Read: Latest Annual Report Analysis of VOLTAS