VOLTAS 2022-23 Annual Report Analysis

Tue, 30 May

VOLTAS has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

VOLTAS Income Statement Analysis

• Operating income during the year fell 3.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 145.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 18.3% in FY23 as against 7.2% in FY22.
• Depreciation charges decreased by 2.5% and finance costs decreased by 51.8% YoY, respectively.
• Other income declined by 7.4% YoY.
• Net profit for the year grew by 177.7% YoY.
• Net profit margins during the year grew from 6.4% in FY22 to 18.3% in FY23.

VOLTAS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	79,345	76,749	-3.3%
Other income	Rs m	1,892	1,752	-7.4%
Total Revenues	Rs m	81,236	78,501	-3.4%
Gross profit	Rs m	5,712	14,018	145.4%
Depreciation	Rs m	373	363	-2.5%
Interest	Rs m	259	125	-51.8%
Profit before tax	Rs m	6,973	15,282	119.2%
Tax	Rs m	1,913	1,229	-35.8%
Profit after tax	Rs m	5,060	14,053	177.7%
Gross profit margin	%	7.2	18.3
Effective tax rate	%	27.4	8.0
Net profit margin	%	6.4	18.3

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VOLTAS Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 31 billion as compared to Rs 41 billion in FY22, thereby witnessing an decrease of -22.8%.
• Long-term debt stood at Rs 425 million as compared to Rs 127 million during FY22, a growth of 235.1%.
• Current assets fell 23% and stood at Rs 45 billion, while fixed assets rose 45% and stood at Rs 55 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 100 billion as against Rs 97 billion during FY22, thereby witnessing a growth of 4%.

VOLTAS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	54,996	67,731	23.2
Current Liabilities	Rs m	40,559	31,300	-22.8
Long-term Debt	Rs m	127	425	235.1
Total Liabilities	Rs m	97,023	100,423	3.5
Current assets	Rs m	58,792	45,095	-23.3
Fixed Assets	Rs m	38,231	55,327	44.7
Total Assets	Rs m	97,023	100,423	3.5

VOLTAS Cash Flow Statement Analysis

• VOLTAS's cash flow from operating activities (CFO) during FY23 stood at Rs 353 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -716 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -419 million, an improvement of 61% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -783 million from the Rs 1 billion net cash flows seen during FY22.

VOLTAS Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	5,842	353	-94.0%
Cash Flow from Investing Activities	Rs m	-3,646	-716	-
Cash Flow from Financing Activities	Rs m	-1,070	-419	-
Net Cash Flow	Rs m	1,126	-783	-

Current Valuations for VOLTAS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 42.5, an improvement from the EPS of Rs 15.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 827.6, stands at 106.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.0 times, while the price to sales ratio stands at 3.6 times.
• The company's price to cash flow (P/CF) ratio stood at 23.9 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	239.8	232.0
TTM Earnings per share	Rs	15.3	42.5
Diluted earnings per share	Rs	15.3	42.5
Price to Cash Flow	x	75.8	23.9
TTM P/E ratio	x	66.8	106.6
Price / Book Value ratio	x	6.8	5.1
Market Cap	Rs m	376,365	345,005
Dividends per share (Unadj.)	Rs	5.5	4.3

Ratio Analysis for VOLTAS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.4x during FY23, from 1.4x during FY22. 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 123.6x during FY23, from 28.0x during FY22. 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 improved and stood at 20.7% during FY23, from 9.2% during FY23. 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 improved and stood at 22.6% during FY23, from 13.1% during FY22. 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 14.1% during FY23, from 5.5% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	1.4	1.4
Debtors’ Days	Days	10	6
Interest coverage	x	28.0	123.6
Debt to equity ratio	x	0.0	0.0
Return on assets	%	5.5	14.1
Return on equity	%	9.2	20.7
Return on capital employed	%	13.1	22.6

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 down from Rs 1,039.9 to Rs 827.6, registering a loss of Rs 212.3 or around 20.4%.

Meanwhile, the S&P BSE CONSUMER DURABLES Index is trading at Rs 40,843.4 (up 0.4%). Over the last one year it has moved up from 38,295.0 to 40,843.4, a gain of 2,548 points (up 6.7%).

Overall, the S&P BSE SENSEX is up 16.0% over the year.

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