LWS KNITWEAR 2021-22 Annual Report Analysis

Wed, 7 Sep

LWS KNITWEAR has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

LWS KNITWEAR Income Statement Analysis

• Operating income during the year rose 35.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 48.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 1.2% in FY22 as against 1.1% in FY21.
• Depreciation charges increased by 2.0% and finance costs increased by 328.1% YoY, respectively.
• Other income grew by 0.0% YoY.
• Net profit for the year grew by 4.8% YoY.
• Net profit margins during the year declined from 0.5% in FY21 to 0.4% in FY22.

LWS KNITWEAR Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	456	618	35.3%
Other income	Rs m	0	0	0.0%
Total Revenues	Rs m	456	618	35.3%
Gross profit	Rs m	5	7	48.0%
Depreciation	Rs m	1	1	2.0%
Interest	Rs m	1	3	328.1%
Profit before tax	Rs m	3	4	7.6%
Tax	Rs m	1	1	16.3%
Profit after tax	Rs m	2	3	4.8%
Gross profit margin	%	1.1	1.2
Effective tax rate	%	24.4	26.3
Net profit margin	%	0.5	0.4

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LWS KNITWEAR Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 206 million as compared to Rs 161 million in FY21, thereby witnessing an increase of 27.8%.
• Long-term debt stood at Rs 11 million as compared to Rs 5 million during FY21, a growth of 99.8%.
• Current assets rose 36% and stood at Rs 262 million, while fixed assets fell 22% and stood at Rs 59 million in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 322 million as against Rs 269 million during FY21, thereby witnessing a growth of 20%.

LWS KNITWEAR Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	103	105	2.4
Current Liabilities	Rs m	161	206	27.8
Long-term Debt	Rs m	5	11	99.8
Total Liabilities	Rs m	269	322	19.5
Current assets	Rs m	194	262	35.6
Fixed Assets	Rs m	75	59	-21.5
Total Assets	Rs m	269	322	19.5

LWS KNITWEAR Cash Flow Statement Analysis

• LWS KNITWEAR's cash flow from operating activities (CFO) during FY22 stood at Rs -61 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs 15 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs 44 million, an improvement of 7,971% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -2 million from the Rs 2 million net cash flows seen during FY21.

LWS KNITWEAR Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	2	-61	-
Cash Flow from Investing Activities	Rs m	-1	15	-
Cash Flow from Financing Activities	Rs m	1	44	7,970.9%
Net Cash Flow	Rs m	2	-2	-

Current Valuations for LWS KNITWEAR

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.5, an improvement from the EPS of Rs 0.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 13.5, stands at 24.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.6 times, while the price to sales ratio stands at 0.1 times.
• The company's price to cash flow (P/CF) ratio stood at 24.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	90.2	122.0
TTM Earnings per share	Rs	0.5	0.5
Diluted earnings per share	Rs	0.5	0.5
Price to Cash Flow	x	5.2	24.8
TTM P/E ratio	x	7.2	24.1
Price / Book Value ratio	x	0.1	0.9
Market Cap	Rs m	14	90
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for LWS KNITWEAR

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.3x during FY22, from 1.2x during FY21. 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 2.3x during FY22, from 6.1x during FY21. 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 2.5% during FY22, from 2.4% during FY22. 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 5.4% during FY22, from 3.6% during FY21. 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 1.7% during FY22, from 1.2% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	1.2	1.3
Debtors’ Days	Days	56,752,181	41,124,966
Interest coverage	x	6.1	2.3
Debt to equity ratio	x	0.1	0.1
Return on assets	%	1.2	1.7
Return on equity	%	2.4	2.5
Return on capital employed	%	3.6	5.4

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

LWS KNITWEAR Share Price Performance

Over the last one year, LWS KNITWEAR share price has moved up from Rs 10.1 to Rs 13.5, registering a gain of Rs 3.4 or around 33.8%.

Overall, the S&P BSE SENSEX is up 1.3% over the year.

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