WELSPUN INDIA 2017-18 Annual Report Analysis

Sat, 31 Mar

WELSPUN INDIA has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

WELSPUN INDIA Income Statement Analysis

• Operating income during the year fell 8.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 0.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 18.6% in FY18 as against 16.9% in FY17.
• Depreciation charges decreased by 0.2% and finance costs decreased by 11.1% YoY, respectively.
• Other income grew by 0.8% YoY.
• Net profit for the year grew by 9.9% YoY.
• Net profit margins during the year grew from 5.5% in FY17 to 6.6% in FY18.

WELSPUN INDIA Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	66,353	60,494	-8.8%
Other income	Rs m	806	812	0.8%
Total Revenues	Rs m	67,158	61,306	-8.7%
Gross profit	Rs m	11,186	11,234	0.4%
Depreciation	Rs m	5,054	5,042	-0.2%
Interest	Rs m	1,583	1,408	-11.1%
Profit before tax	Rs m	5,355	5,597	4.5%
Tax	Rs m	1,731	1,615	-6.7%
Profit after tax	Rs m	3,624	3,982	9.9%
Gross profit margin	%	16.9	18.6
Effective tax rate	%	32.3	28.9
Net profit margin	%	5.5	6.6

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WELSPUN INDIA Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 25 billion as compared to Rs 24 billion in FY17, thereby witnessing an increase of 1.7%.
• Long-term debt down at Rs 17 billion as compared to Rs 20 billion during FY17, a fall of 15.5%.
• Current assets rose 2% and stood at Rs 35 billion, while fixed assets fell 4% and stood at Rs 37 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 72 billion as against Rs 73 billion during FY17, thereby witnessing a fall of 1%.

WELSPUN INDIA Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	23,971	26,057	8.7
Current Liabilities	Rs m	24,275	24,686	1.7
Long-term Debt	Rs m	20,160	17,028	-15.5
Total Liabilities	Rs m	72,581	71,870	-1.0
Current assets	Rs m	34,292	35,108	2.4
Fixed Assets	Rs m	38,289	36,762	-4.0
Total Assets	Rs m	72,581	71,870	-1.0

WELSPUN INDIA Cash Flow Statement Analysis

• WELSPUN INDIA's cash flow from operating activities (CFO) during FY18 stood at Rs 5 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -3 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -3 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -47 million from the Rs 178 million net cash flows seen during FY17.

WELSPUN INDIA Cash Flow Statement 2017-18

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-17	Mar-18
Cash Flow from Operating Activities	Rs m	8,322	5,450	-34.5%
Cash Flow from Investing Activities	Rs m	-7,124	-3,015	-
Cash Flow from Financing Activities	Rs m	-990	-2,500	-
Net Cash Flow	Rs m	178	-47	-

Current Valuations for WELSPUN INDIA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 4.0, an improvement from the EPS of Rs 3.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 58.0, stands at 8.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.2 times, while the price to sales ratio stands at 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 8.7 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Sales per share (Unadj.)	Rs	66.0	60.2
TTM Earnings per share	Rs	3.6	4.0
Diluted earnings per share	Rs	3.7	4.0
Price to Cash Flow	x	10.0	8.7
TTM P/E ratio	x	24.3	8.8
Price / Book Value ratio	x	3.5	3.0
Market Cap	Rs m	83,518	78,946
Dividends per share (Unadj.)	Rs	0.7	0.7

Ratio Analysis for WELSPUN INDIA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x during FY18, from 1.4x during FY17. 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 5.0x during FY18, from 4.4x during FY17. 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 15.3% during FY18, from 15.1% during FY18. 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 16.3% during FY18, from 15.7% during FY17. 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 7.5% during FY18, from 7.2% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Current ratio	x	1.4	1.4
Debtors’ Days	Days	53	56
Interest coverage	x	4.4	5.0
Debt to equity ratio	x	0.8	0.7
Return on assets	%	7.2	7.5
Return on equity	%	15.1	15.3
Return on capital employed	%	15.7	16.3

To see how WELSPUN INDIA has performed over the last 5 years, please visit here.

WELSPUN INDIA Share Price Performance

Over the last one year, WELSPUN INDIA share price has moved down from Rs 87.6 to Rs 58.0, registering a loss of Rs 29.6 or around 33.8%.

Overall, the S&P BSE SENSEX is up 12.1% over the year.

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

Read: Latest Annual Report Analysis of WELSPUN LIVING