VENKYS 2018-19 Annual Report Analysis

Sun, 31 Mar

VENKYS 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.

VENKYS Income Statement Analysis

• Operating income during the year rose 13.3% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 20.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 10.1% in FY19 as against 14.4% in FY18.
• Depreciation charges increased by 4.3% and finance costs decreased by 36.7% YoY, respectively.
• Other income grew by 0.7% YoY.
• Net profit for the year declined by 12.8% YoY.
• Net profit margins during the year declined from 7.4% in FY18 to 5.7% in FY19.

VENKYS Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	26,862	30,431	13.3%
Other income	Rs m	288	290	0.7%
Total Revenues	Rs m	27,150	30,721	13.2%
Gross profit	Rs m	3,861	3,084	-20.1%
Depreciation	Rs m	281	294	4.3%
Interest	Rs m	499	315	-36.7%
Profit before tax	Rs m	3,370	2,765	-17.9%
Tax	Rs m	1,372	1,024	-25.4%
Profit after tax	Rs m	1,997	1,741	-12.8%
Gross profit margin	%	14.4	10.1
Effective tax rate	%	40.7	37.0
Net profit margin	%	7.4	5.7

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VENKYS Balance Sheet Analysis

• The company's current liabilities during FY19 down at Rs 6 billion as compared to Rs 6 billion in FY18, thereby witnessing an decrease of -0.4%.
• Long-term debt down at Rs 399 million as compared to Rs 739 million during FY18, a fall of 45.9%.
• Current assets rose 12% and stood at Rs 9 billion, while fixed assets rose 5% and stood at Rs 7 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 16 billion as against Rs 14 billion during FY18, thereby witnessing a growth of 9%.

VENKYS Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	7,212	8,815	22.2
Current Liabilities	Rs m	5,900	5,877	-0.4
Long-term Debt	Rs m	739	399	-45.9
Total Liabilities	Rs m	14,312	15,573	8.8
Current assets	Rs m	7,938	8,903	12.2
Fixed Assets	Rs m	6,374	6,670	4.6
Total Assets	Rs m	14,312	15,573	8.8

VENKYS Cash Flow Statement Analysis

• VENKYS's cash flow from operating activities (CFO) during FY19 stood at Rs 2 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -383 million, an improvement of 30.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -1 billion, an improvement of 51% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 2 million from the Rs -182 million net cash flows seen during FY18.

VENKYS 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	2,559	1,589	-37.9%
Cash Flow from Investing Activities	Rs m	-293	-383	-
Cash Flow from Financing Activities	Rs m	-2,448	-1,204	-
Net Cash Flow	Rs m	-182	2	-

Current Valuations for VENKYS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 123.6, an decline from the EPS of Rs 141.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,257.7, stands at 18.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.6 times, while the price to sales ratio stands at 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 22.5 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	1,906.5	2,159.8
TTM Earnings per share	Rs	141.7	123.6
Diluted earnings per share	Rs	141.8	123.6
Price to Cash Flow	x	23.9	22.5
TTM P/E ratio	x	27.3	18.3
Price / Book Value ratio	x	5.4	5.2
Market Cap	Rs m	39,162	45,778
Dividends per share (Unadj.)	Rs	8.0	8.0

Ratio Analysis for VENKYS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.5x 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 improved and stood at 9.8x during FY19, from 7.8x 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 19.8% during FY19, from 27.7% 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 33.4% during FY19, from 48.7% 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 13.2% during FY19, from 17.4% 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	1.5
Debtors’ Days	Days	401	366
Interest coverage	x	7.8	9.8
Debt to equity ratio	x	0.1	0.0
Return on assets	%	17.4	13.2
Return on equity	%	27.7	19.8
Return on capital employed	%	48.7	33.4

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 down from Rs 3,872.5 to Rs 2,257.7, registering a loss of Rs 1,614.8 or around 41.7%.

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