WELSPUN INDIA 2018-19 Annual Report Analysis

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WELSPUN INDIA 2018-19 Annual Report Analysis
Mon, 23 Sep

WELSPUN INDIA 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.

WELSPUN INDIA Income Statement Analysis

  • Operating income during the year rose 7.9% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 5.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 16.3% in FY19 as against 18.6% in FY18.
  • Depreciation charges decreased by 13.6% and finance costs increased by 13.2% YoY, respectively.
  • Other income grew by 0.7% YoY.
  • Net profit for the year declined by 43.2% YoY.
  • Net profit margins during the year declined from 6.5% in FY18 to 3.4% in FY19.

WELSPUN INDIA Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 60,506 65,266 7.9%
Other income Rs m 812 818 0.7%
Total Revenues Rs m 61,318 66,084 7.8%
Gross profit Rs m 11,234 10,649 -5.2%
Depreciation Rs m 5,042 4,358 -13.6%
Interest Rs m 1,408 1,593 13.2%
Profit before tax Rs m 5,597 5,516 -1.4%
Tax Rs m 1,615 608 -62.4%
Profit after tax Rs m 3,982 2,262 -43.2%
Gross profit margin % 18.6 16.3
Effective tax rate % 28.9 11.0
Net profit margin % 6.5 3.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



WELSPUN INDIA Balance Sheet Analysis

  • The company's current liabilities during FY19 stood at Rs 29 billion as compared to Rs 25 billion in FY18, thereby witnessing an increase of 17.2%.
  • Long-term debt down at Rs 16 billion as compared to Rs 17 billion during FY18, a fall of 8.8%.
  • Current assets rose 3% and stood at Rs 36 billion, while fixed assets rose 7% and stood at Rs 38 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 77 billion as against Rs 72 billion during FY18, thereby witnessing a growth of 7%.

WELSPUN INDIA Balance Sheet as on March 2019

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 27,061 28,798 6.4
 
Current Liabilities Rs m 24,686 28,935 17.2
Long-term Debt Rs m 17,029 15,537 -8.8
Total Liabilities Rs m 72,249 77,423 7.2
 
Current assets Rs m 35,108 36,306 3.4
Fixed Assets Rs m 35,427 37,946 7.1
Total Assets Rs m 72,249 77,423 7.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



WELSPUN INDIA Cash Flow Statement Analysis

  • WELSPUN INDIA's cash flow from operating activities (CFO) during FY19 stood at Rs 9 billion, an improvement of 69.6% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs -7 billion, an improvement of 118.0% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY19 stood at Rs -2 billion, an improvement of 7% on a YoY basis.
  • Overall, net cash flows for the company during FY19 stood at Rs 352 million from the Rs -47 million net cash flows seen during FY18.

WELSPUN INDIA 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 5,450 9,243 69.6%
Cash Flow from Investing Activities Rs m -3,015 -6,572 -
Cash Flow from Financing Activities Rs m -2,500 -2,319 -
Net Cash Flow Rs m -47 352 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for WELSPUN INDIA

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 22.5, an decline from the EPS of Rs 39.6 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 53.9, stands at 21.7 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 0.2 times, while the price to sales ratio stands at 0.1 times.
  • The company's price to cash flow (P/CF) ratio stood at 8.2 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 602.2 649.6
TTM Earnings per share Rs 39.6 22.5
Diluted earnings per share Rs 4.0 2.3
Price to Cash Flow x 0.6 8.2
TTM P/E ratio x 2.2 21.7
Price / Book Value ratio x 0.3 0.2
Market Cap Rs m 5,415 54,116
Dividends per share (Unadj.) Rs 0.7 0.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for WELSPUN INDIA

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 1.3x 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 4.5x during FY19, from 5.0x 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 7.9% during FY19, from 14.7% 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 10.1% during FY19, from 15.9% 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 5.0% during FY19, from 7.5% 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 1.4 1.3
Debtors’ Days Days 56 60
Interest coverage x 5.0 4.5
Debt to equity ratio x 0.6 0.5
Return on assets % 7.5 5.0
Return on equity % 14.7 7.9
Return on capital employed % 15.9 10.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 64.8 to Rs 53.9, registering a loss of Rs 10.9 or around 16.8%.

Overall, the S&P BSE SENSEX is up 5.3% over the year.

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

Equitymaster requests your view! Post a comment on "WELSPUN INDIA 2018-19 Annual Report Analysis". Click here!

1 Responses to "WELSPUN INDIA 2018-19 Annual Report Analysis"

Ajay Sanghi

Apr 1, 2020

I am a long term investor in the Company and was attracted by its export volumes and apparent forward-looking management. But the performance of the Company has been disappointing. They are regularly mired in debt. The points of concern are :
1. Despite the accumulation of substantial debt, they continue to proceed with investments. These must be iun-necessary. Because the top line is virtually stagnant, despite the depreciating rupee.
2. It is not clear where these investments are headed. Are they going to Group Companies ?
3. There may be a SEBI type examination of the books soon,!if the Arms length compliances have not been maintained. This could be disastrous for share prices.
4. The Group website is not easy to navigate. They are discouraging access to their Balance Sheet. I might need to source the same from MCA by payment of 100/-.

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Equitymaster requests your view! Post a comment on "WELSPUN INDIA 2018-19 Annual Report Analysis". Click here!

Related Views on News

WELSPUN INDIA Announces Quarterly Results (3QFY20); Net Profit Up 49.9% (Quarterly Result Update)

Feb 17, 2020 | Updated on Feb 17, 2020

For the quarter ended December 2019, WELSPUN INDIA has posted a net profit of Rs 751 m (up 49.9% YoY). Sales on the other hand came in at Rs 17 bn (up 1.5% YoY). Read on for a complete analysis of WELSPUN INDIA's quarterly results.

WELSPUN INDIA Announces Quarterly Results (2QFY20); Net Profit Up 66.5% (Quarterly Result Update)

Oct 25, 2019 | Updated on Oct 25, 2019

For the quarter ended September 2019, WELSPUN INDIA has posted a net profit of Rs 2 bn (up 66.5% YoY). Sales on the other hand came in at Rs 18 bn (up 2.5% YoY). Read on for a complete analysis of WELSPUN INDIA's quarterly results.

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