VOLTAS 2018-19 Annual Report Analysis

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VOLTAS 2018-19 Annual Report Analysis
Thu, 18 Jul

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 11.2% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 7.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 8.6% in FY19 as against 10.3% in FY18.
  • Depreciation charges decreased by 1.5% and finance costs increased by 176.7% YoY, respectively.
  • Other income grew by 7.0% YoY.
  • Net profit for the year declined by 11.1% YoY.
  • Net profit margins during the year declined from 8.8% in FY18 to 7.0% in FY19.

VOLTAS Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 64,044 71,241 11.2%
Other income Rs m 1,741 1,863 7.0%
Total Revenues Rs m 65,785 73,103 11.1%
Gross profit Rs m 6,626 6,117 -7.7%
Depreciation Rs m 244 240 -1.5%
Interest Rs m 119 330 176.7%
Profit before tax Rs m 8,005 7,410 -7.4%
Tax Rs m 2,270 1,635 -28.0%
Profit after tax Rs m 5,779 5,139 -11.1%
Gross profit margin % 10.3 8.6
Effective tax rate % 28.4 22.1
Net profit margin % 8.8 7.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 rose 27% and stood at Rs 3 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 75 billion as against Rs 73 billion during FY18, thereby witnessing a growth of 3%.

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 73,097 75,220 2.9
 
Current assets Rs m 45,975 56,472 22.8
Fixed Assets Rs m 2,193 2,775 26.5
Total Assets Rs m 73,097 75,220 2.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for VOLTAS

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 15.5, an decline from the EPS of Rs 17.5 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 587.5, stands at 34.3 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 2.6 times.
  • The company's price to cash flow (P/CF) ratio stood at 33.0 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 193.6 215.3
TTM Earnings per share Rs 17.5 15.5
Diluted earnings per share Rs 17.5 15.5
Price to Cash Flow x 32.5 33.0
TTM P/E ratio x 34.3 34.3
Price / Book Value ratio x 4.6 4.6
Market Cap Rs m 194,392 194,395
Dividends per share (Unadj.) Rs 4.0 4.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 23.5x 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 12.5% during FY19, from 14.8% 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 17.3% during FY19, from 20.9% 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 7.3% during FY19, from 8.1% 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 89 92
Interest coverage x 68.2 23.5
Debt to equity ratio x 0.0 0.0
Return on assets % 8.1 7.3
Return on equity % 14.8 12.5
Return on capital employed % 20.9 17.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 535.6 to Rs 587.5, registering a gain of Rs 51.9 or around 9.7%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 18,472.8 (down 0.3%). Over the last one year it has moved up from 17,649.2 to 18,472.8, a gain of 824 points (up 4.7%).

Overall, the S&P BSE SENSEX is up 7.2% over the year.

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

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