VENKYS 2017-18 Annual Report Analysis

Sat, 31 Mar

VENKYS 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.

VENKYS Income Statement Analysis

• Operating income during the year rose 8.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 39.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 14.4% in FY18 as against 11.2% in FY17.
• Depreciation charges decreased by 1.3% and finance costs decreased by 35.3% YoY, respectively.
• Other income declined by 15.5% YoY.
• Net profit for the year grew by 60.1% YoY.
• Net profit margins during the year grew from 5.0% in FY17 to 7.4% in FY18.

VENKYS Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	24,756	26,862	8.5%
Other income	Rs m	341	288	-15.5%
Total Revenues	Rs m	25,097	27,150	8.2%
Gross profit	Rs m	2,774	3,861	39.2%
Depreciation	Rs m	285	281	-1.3%
Interest	Rs m	771	499	-35.3%
Profit before tax	Rs m	2,059	3,370	63.7%
Tax	Rs m	812	1,372	69.1%
Profit after tax	Rs m	1,247	1,997	60.1%
Gross profit margin	%	11.2	14.4
Effective tax rate	%	39.4	40.7
Net profit margin	%	5.0	7.4

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VENKYS Balance Sheet Analysis

• The company's current liabilities during FY18 down at Rs 6 billion as compared to Rs 6 billion in FY17, thereby witnessing an decrease of -4.9%.
• Long-term debt down at Rs 739 million as compared to Rs 2 billion during FY17, a fall of 56.3%.
• Current assets rose 10% and stood at Rs 8 billion, while fixed assets rose 0% and stood at Rs 6 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 14 billion as against Rs 14 billion during FY17, thereby witnessing a growth of 5%.

VENKYS Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	5,310	7,212	35.8
Current Liabilities	Rs m	6,202	5,900	-4.9
Long-term Debt	Rs m	1,691	739	-56.3
Total Liabilities	Rs m	13,604	14,312	5.2
Current assets	Rs m	7,235	7,938	9.7
Fixed Assets	Rs m	6,370	6,374	0.1
Total Assets	Rs m	13,604	14,312	5.2

VENKYS Cash Flow Statement Analysis

• VENKYS's cash flow from operating activities (CFO) during FY18 stood at Rs 3 billion, an improvement of 21.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -293 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -2 billion, an improvement of 13% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -182 million from the Rs -120 million net cash flows seen during FY17.

VENKYS 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	2,113	2,559	21.1%
Cash Flow from Investing Activities	Rs m	571	-293	-
Cash Flow from Financing Activities	Rs m	-2,804	-2,448	-
Net Cash Flow	Rs m	-120	-182	-

Current Valuations for VENKYS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 141.7, an improvement from the EPS of Rs 88.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 3,872.5, stands at 27.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 7.6 times, while the price to sales ratio stands at 2.0 times.
• The company's price to cash flow (P/CF) ratio stood at 17.2 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	1,757.0	1,906.5
TTM Earnings per share	Rs	88.5	141.7
Diluted earnings per share	Rs	88.6	141.8
Price to Cash Flow	x	9.4	17.2
TTM P/E ratio	x	11.5	27.3
Price / Book Value ratio	x	1.9	5.4
Market Cap	Rs m	9,994	39,162
Dividends per share (Unadj.)	Rs	6.0	8.0

Ratio Analysis for VENKYS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.3x during FY18, from 1.2x 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 7.8x during FY18, from 3.7x 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 27.7% during FY18, from 23.5% 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 48.7% during FY18, from 40.4% 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 17.4% during FY18, from 14.8% 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	1.2	1.3
Debtors’ Days	Days	390	401
Interest coverage	x	3.7	7.8
Debt to equity ratio	x	0.3	0.1
Return on assets	%	14.8	17.4
Return on equity	%	23.5	27.7
Return on capital employed	%	40.4	48.7

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

VENKYS Share Price Performance

Over the last one year, VENKYS share price has moved up from Rs 1,017.5 to Rs 3,872.5, registering a gain of Rs 2,855.0 or around 280.6%.

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

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

Read: Latest Annual Report Analysis of VENKYS