VA TECH WABAG 2018-19 Annual Report Analysis

Sun, 31 Mar

VA TECH WABAG 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.

VA TECH WABAG Income Statement Analysis

• Operating income during the year fell 19.6% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 37.9% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 6.5% in FY19 as against 8.4% in FY18.
• Depreciation charges decreased by 5.9% and finance costs increased by 30.6% YoY, respectively.
• Other income grew by 207.4% YoY.
• Net profit for the year declined by 40.6% YoY.
• Net profit margins during the year declined from 4.2% in FY18 to 3.1% in FY19.

VA TECH WABAG Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	34,573	27,810	-19.6%
Other income	Rs m	57	174	207.4%
Total Revenues	Rs m	34,629	27,983	-19.2%
Gross profit	Rs m	2,918	1,811	-37.9%
Depreciation	Rs m	178	168	-5.9%
Interest	Rs m	577	753	30.6%
Profit before tax	Rs m	2,219	1,064	-52.1%
Tax	Rs m	774	205	-73.5%
Profit after tax	Rs m	1,445	859	-40.6%
Gross profit margin	%	8.4	6.5
Effective tax rate	%	34.9	19.3
Net profit margin	%	4.2	3.1

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VA TECH WABAG Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 24 billion as compared to Rs 23 billion in FY18, thereby witnessing an increase of 5.4%.
• Long-term debt stood at Rs 996 million as compared to Rs 499 million during FY18, a growth of 99.5%.
• Current assets rose 2% and stood at Rs 31 billion, while fixed assets fell 12% and stood at Rs 6 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 37 billion as against Rs 37 billion during FY18, thereby witnessing a fall of 0%.

VA TECH WABAG Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	11,283	10,689	-5.3
Current Liabilities	Rs m	22,947	24,197	5.4
Long-term Debt	Rs m	499	996	99.5
Total Liabilities	Rs m	36,923	36,794	-0.3
Current assets	Rs m	30,198	30,901	2.3
Fixed Assets	Rs m	6,725	5,893	-12.4
Total Assets	Rs m	36,923	36,794	-0.3

VA TECH WABAG Cash Flow Statement Analysis

• VA TECH WABAG's cash flow from operating activities (CFO) during FY19 stood at Rs -763 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs 112 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs 486 million on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -147 million from the Rs -981 million net cash flows seen during FY18.

VA TECH WABAG 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	-2,158	-763	-
Cash Flow from Investing Activities	Rs m	-108	112	-
Cash Flow from Financing Activities	Rs m	1,061	486	-54.2%
Net Cash Flow	Rs m	-981	-147	-

Current Valuations for VA TECH WABAG

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 15.7, an decline from the EPS of Rs 26.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 331.7, stands at 23.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.9 times, while the price to sales ratio stands at 0.7 times.
• The company's price to cash flow (P/CF) ratio stood at 20.9 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	632.5	508.5
TTM Earnings per share	Rs	26.4	15.7
Diluted earnings per share	Rs	23.2	13.8
Price to Cash Flow	x	19.0	20.9
TTM P/E ratio	x	21.3	23.5
Price / Book Value ratio	x	2.9	2.0
Market Cap	Rs m	33,095	21,462
Dividends per share (Unadj.)	Rs	4.0	0.0

Ratio Analysis for VA TECH WABAG

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.3x during FY19, from 1.3x 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 2.4x during FY19, from 4.8x 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 8.0% during FY19, from 12.8% 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 15.5% during FY19, from 23.7% 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 4.4% during FY19, from 5.5% 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	1.3	1.3
Debtors’ Days	Days	1,375	1,773
Interest coverage	x	4.8	2.4
Debt to equity ratio	x	0.0	0.1
Return on assets	%	5.5	4.4
Return on equity	%	12.8	8.0
Return on capital employed	%	23.7	15.5

To see how VA TECH WABAG has performed over the last 5 years, please visit here.

VA TECH WABAG Share Price Performance

Over the last one year, VA TECH WABAG share price has moved down from Rs 495.9 to Rs 331.7, registering a loss of Rs 164.2 or around 33.1%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 18,472.0 (up 0.5%). Over the last one year it has moved down from 18,476.7 to 18,472.0, a loss of 5 points (down 0.0%).

Overall, the S&P BSE SENSEX is up 16.3% over the year.

(To know more, check out historical annual results for VA TECH WABAG and quarterly results for VA TECH WABAG)

Read: Latest Annual Report Analysis of VA TECH WABAG