VOLTAS 2020-21 Annual Report Analysis

Wed, 31 Mar

VOLTAS 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.

VOLTAS Income Statement Analysis

• Operating income during the year fell 1.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 0.9% YoY during the fiscal. Operating profit margins witnessed a fall and down at 8.5% in FY21 as against 8.3% in FY20.
• Depreciation charges increased by 6.0% and finance costs increased by 23.9% YoY, respectively.
• Other income declined by 21.0% YoY.
• Net profit for the year grew by 1.5% YoY.
• Net profit margins during the year grew from 6.8% in FY20 to 7.0% in FY21.

VOLTAS Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	76,581	75,558	-1.3%
Other income	Rs m	1,619	1,279	-21.0%
Total Revenues	Rs m	78,200	76,837	-1.7%
Gross profit	Rs m	6,355	6,414	0.9%
Depreciation	Rs m	320	339	6.0%
Interest	Rs m	211	262	23.9%
Profit before tax	Rs m	7,443	7,092	-4.7%
Tax	Rs m	2,233	1,804	-19.2%
Profit after tax	Rs m	5,211	5,288	1.5%
Gross profit margin	%	8.3	8.5
Effective tax rate	%	30.0	25.4
Net profit margin	%	6.8	7.0

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VOLTAS Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 35 billion as compared to Rs 37 billion in FY20, thereby witnessing an decrease of -5.6%.
• Long-term debt stood at Rs 57 million as compared to Rs 54 million during FY20, a growth of 4.6%.
• Current assets fell 7% and stood at Rs 52 billion, while fixed assets rose 36% and stood at Rs 34 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 86 billion as against Rs 81 billion during FY20, thereby witnessing a growth of 6%.

VOLTAS Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	42,802	49,934	16.7
Current Liabilities	Rs m	37,138	35,041	-5.6
Long-term Debt	Rs m	54	57	4.6
Total Liabilities	Rs m	80,832	85,997	6.4
Current assets	Rs m	55,784	51,894	-7.0
Fixed Assets	Rs m	25,048	34,103	36.2
Total Assets	Rs m	80,832	85,997	6.4

VOLTAS Cash Flow Statement Analysis

• VOLTAS's cash flow from operating activities (CFO) during FY21 stood at Rs 6 billion, an improvement of 20.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -3 billion, an improvement of 21.6% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -1 billion, an improvement of 59% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 2 billion from the Rs -417 million net cash flows seen during FY20.

VOLTAS 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	4,625	5,561	20.3%
Cash Flow from Investing Activities	Rs m	-2,105	-2,559	-
Cash Flow from Financing Activities	Rs m	-2,937	-1,215	-
Net Cash Flow	Rs m	-417	1,787	-

Current Valuations for VOLTAS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 16.0, an improvement from the EPS of Rs 15.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,001.9, stands at 56.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.6 times, while the price to sales ratio stands at 4.4 times.
• The company's price to cash flow (P/CF) ratio stood at 45.8 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	231.4	228.4
TTM Earnings per share	Rs	15.7	16.0
Diluted earnings per share	Rs	15.7	16.0
Price to Cash Flow	x	28.7	45.8
TTM P/E ratio	x	26.9	56.2
Price / Book Value ratio	x	4.6	5.2
Market Cap	Rs m	196,827	257,958
Dividends per share (Unadj.)	Rs	4.0	5.0

Ratio Analysis for VOLTAS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.5x during FY21, from 1.5x 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 28.1x during FY21, from 36.3x 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 10.6% during FY21, from 12.2% 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 14.7% during FY21, from 17.9% 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 6.5% during FY21, from 6.7% 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	1.5	1.5
Debtors’ Days	Days	9	9
Interest coverage	x	36.3	28.1
Debt to equity ratio	x	0.0	0.0
Return on assets	%	6.7	6.5
Return on equity	%	12.2	10.6
Return on capital employed	%	17.9	14.7

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 478.9 to Rs 1,001.9, registering a gain of Rs 523.0 or around 109.2%.

Meanwhile, the S&P BSE CONSUMER DURABLES Index is trading at Rs 32,825.9 (up 0.8%). Over the last one year it has moved up from 19,363.0 to 32,825.9, a gain of 13,463 points (up 69.5%).

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