VAKRANGEE - Q4 FY 2017-18 RESULTS - A REVIEW

VAKRANGEE 

Q4 FY 2017-18 RESULTS

A REVIEW

The much awaited results of VAKRANGEE for the 4th quarter ended 31.03.2018 are finally out some time ago.

VAKRANGEE	Q4 FY18	Q3FY18	Q4FY17	YOY	QOQ
INCOME	1847	1802	1145	61.31	2.5
OTHER INCOME	20	8	3	566.67	150
TOTAL INCOME	1867	1810	1148	62.63	3.15
TOTAL EXPENSES	1753*	1447	901
*ONETIME OTHER EXPENSES AMOUNT TO Rs.220 CR
P  B T	113	364	246	-54.07	-68.96
NET PROFIT	76	247	161	-52.8	-69.23
NPT+ONETIME OE	296	247	161	83.85	19.84
TOTAL COMPR.INCOME
	11	266	145
EQUITY(FV RS.1)	106	106	53	100	0
EPS (DIL)	0.72	2.31	1.43	-49.65	-68.83
MP	44
PE	15.28

The results need to be read in the light of the controversies and rumours etc that preceded it in the last 4-5 months.

Income from operations for Q4 FY 18 stands at 61.31 % higher YoY and 2.5% QoQ. This is reasonably good.

Total expenses stands at Rs.1753 crores , against Rs.1447 cr in previous quarter (Q3) and Rs.901 Cr in Q4 FY 17.

The Notes explain that -

"Other expenses includes Rs.219.95 Crores (net off amounts of allowances for credit losses considered in previous years) towards amounts written off as bad debts pertaining to the legacy business of e-governance, during the quarter ended March 31 , 2018."

Bad Debts typically are a one time expense and non-recurring.

If its effect is removed from the results, Net profits go up by 84% YoY and about 20% QoQ. Otherwise, they stand reduced by 53%YOYand 63% QOQ.

Net comprehensive income also has been reduced by some such non recurring amounts.

The results state that -

Other comprehensive income (OCI) I (expenses)
Items that will not be reclassified to profit or loss
Changes in fair value of FVOCI equity instruments (5.950.61)
Remeasuremenl of net defined benefit obligations (net of taxes) (15.89).

There is also a Note which states that -

During the year, Company has made an irrevocable election to present the subsequent changes in the fair value of equity instruments, not held for trading, in the Other Comprehensive Income. The cumulative loss recognised on
disposal of equity instruments for the year ended March 31 , 2018 is Rs.3,086.34 lakhs. Dividend recognised during the year for the investment disposed off is Rs. 46.96 lakhs.

All these seem to be one off, non-recurring items.

About the previous quarter results and the Q4 FY 17 results - the Notes state that - 

"The comparative financial results for the quarter and year ended March 31 , 2017, included in above standalone financial results have been audited by another firm of Chartered Accountants who, vide their report dated May 30,
2017 expressed an unmodified audit opinion.
The comparative financial results for the quarter ended December 31 , 2017, included in above standalone financial results have been reviewed by another firm of Chartered Accountants who, vide their report dated January 22, 2018
expressed an unmodified conclusion on those financial results. "

Normally speaking, I need not be mentioning all these Notes. But, because of the rumours etc that preceded during last several months, I felt, we need to look at all aspects mentioned in the results statements.

The significant factor is - I do not see any significant audit observations to discredit the company.  

This is important for the future of the company.  The company seems to have provided for all liabilities. Audit has not found fault with that.

The EPS for Q4 is 0.72 on the doubled Equity after  bonus , compared to Rs.1.43 on the Equity before the Bonus.

This EPS is after provision of all other expenses etc, which are non-recurring.

At this stage , I leave it to your INDIVIDUAL JUDGEMENTS on how you would like to approach the company's results and its shares. I do hope, from next results onwards, all this past baggage will not be there and it will be a clean slate of straight forward accounts.

If there are any additional factors, I have missed out or not correctly factored in, I will be glad to hear from you and correct myself.

All I would say is -VAKRANGEE should steer clear of all controversies in future and make the best of its business and reward the investors who have lost heavily in recent past.