VARDHMAN TEXTILES 2023-24 Annual Report Analysis

Mon, 2 Sep

VARDHMAN TEXTILES has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during FY23-24.

VARDHMAN TEXTILES Income Statement Analysis

• Operating income during the year fell 6.2% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 25.6% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 10.7% in FY24 as against 13.5% in FY23.
• Depreciation charges increased by 2.6% and finance costs increased by 0.1% YoY, respectively.
• Other income grew by 69.8% YoY.
• Net profit for the year declined by 20.9% YoY.
• Net profit margins during the year declined from 7.9% in FY23 to 6.7% in FY24.

VARDHMAN TEXTILES Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	101,375	95,047	-6.2%
Other income	Rs m	1,920	3,259	69.8%
Total Revenues	Rs m	103,294	98,306	-4.8%
Gross profit	Rs m	13,645	10,159	-25.6%
Depreciation	Rs m	3,944	4,046	2.6%
Interest	Rs m	1,022	1,023	0.1%
Profit before tax	Rs m	10,599	8,349	-21.2%
Tax	Rs m	2,552	1,982	-22.3%
Profit after tax	Rs m	8,048	6,367	-20.9%
Gross profit margin	%	13.5	10.7
Effective tax rate	%	24.1	23.7
Net profit margin	%	7.9	6.7

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VARDHMAN TEXTILES Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 21 billion as compared to Rs 14 billion in FY23, thereby witnessing an increase of 42.7%.
• Long-term debt down at Rs 4 billion as compared to Rs 9 billion during FY23, a fall of 55.6%.
• Current assets rose 11% and stood at Rs 64 billion, while fixed assets rose 0% and stood at Rs 55 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 120 billion as against Rs 113 billion during FY23, thereby witnessing a growth of 6%.

VARDHMAN TEXTILES Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	85,628	91,001	6.3
Current Liabilities	Rs m	14,448	20,621	42.7
Long-term Debt	Rs m	9,314	4,131	-55.6
Total Liabilities	Rs m	113,326	119,808	5.7
Current assets	Rs m	57,844	64,315	11.2
Fixed Assets	Rs m	55,480	55,492	0.0
Total Assets	Rs m	113,326	119,808	5.7

VARDHMAN TEXTILES Cash Flow Statement Analysis

• VARDHMAN TEXTILES's cash flow from operating activities (CFO) during FY24 stood at Rs -11 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs 11 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -897 million, an improvement of 78% on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs -413 million from the Rs 90 million net cash flows seen during FY23.

VARDHMAN TEXTILES Cash Flow Statement 2023-24

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-23	Mar-24
Cash Flow from Operating Activities	Rs m	18,528	-10,552	-
Cash Flow from Investing Activities	Rs m	-14,447	11,036	-
Cash Flow from Financing Activities	Rs m	-3,992	-897	-
Net Cash Flow	Rs m	90	-413	-

Current Valuations for VARDHMAN TEXTILES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 22.4, an decline from the EPS of Rs 28.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 486.9, stands at 20.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.5 times, while the price to sales ratio stands at 1.5 times.
• The company's price to cash flow (P/CF) ratio stood at 10.2 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Sales per share (Unadj.)	Rs	356.4	334.1
TTM Earnings per share	Rs	28.3	22.4
Diluted earnings per share	Rs	27.8	22.0
Price to Cash Flow	x	7.1	10.2
TTM P/E ratio	x	11.1	20.3
Price / Book Value ratio	x	1.2	1.2
Market Cap	Rs m	102,009	106,408
Dividends per share (Unadj.)	Rs	3.5	4.0

Ratio Analysis for VARDHMAN TEXTILES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 3.1x during FY24, from 4.0x during FY23. 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 9.2x during FY24, from 11.4x during FY23. 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 7.0% during FY24, from 9.4% during FY24. 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 9.9% during FY24, from 12.2% during FY23. 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 6.2% during FY24, from 8.0% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Current ratio	x	4.0	3.1
Debtors’ Days	Days	4	5
Interest coverage	x	11.4	9.2
Debt to equity ratio	x	0.1	0.0
Return on assets	%	8.0	6.2
Return on equity	%	9.4	7.0
Return on capital employed	%	12.2	9.9

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

VARDHMAN TEXTILES Share Price Performance

Over the last one year, VARDHMAN TEXTILES share price has moved up from Rs 391.9 to Rs 486.9, registering a gain of Rs 95.1 or around 24.3%.

Overall, the S&P BSE SENSEX is up 26.8% over the year.

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