ELECON ENGINEERING 2022-23 Annual Report Analysis

Thu, 8 Jun

ELECON ENGINEERING has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

ELECON ENGINEERING Income Statement Analysis

• Operating income during the year fell 0.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 14.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 23.0% in FY23 as against 19.9% in FY22.
• Depreciation charges decreased by 19.1% and finance costs decreased by 69.1% YoY, respectively.
• Other income grew by 40.3% YoY.
• Net profit for the year grew by 35.3% YoY.
• Net profit margins during the year grew from 11.6% in FY22 to 15.7% in FY23.

ELECON ENGINEERING Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	12,036	11,970	-0.5%
Other income	Rs m	160	224	40.3%
Total Revenues	Rs m	12,195	12,194	0.0%
Gross profit	Rs m	2,398	2,751	14.7%
Depreciation	Rs m	486	393	-19.1%
Interest	Rs m	381	118	-69.1%
Profit before tax	Rs m	1,691	2,465	45.8%
Tax	Rs m	300	583	94.1%
Profit after tax	Rs m	1,391	1,881	35.3%
Gross profit margin	%	19.9	23.0
Effective tax rate	%	17.8	23.7
Net profit margin	%	11.6	15.7

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ELECON ENGINEERING Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 3 billion as compared to Rs 5 billion in FY22, thereby witnessing an decrease of -47.2%.
• Current assets fell 26% and stood at Rs 7 billion, while fixed assets fell 8% and stood at Rs 8 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 14 billion as against Rs 17 billion during FY22, thereby witnessing a fall of 17%.

ELECON ENGINEERING Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	10,502	10,794	2.8
Current Liabilities	Rs m	5,395	2,849	-47.2
Long-term Debt	Rs m	197	0	-100.0
Total Liabilities	Rs m	17,146	14,157	-17.4
Current assets	Rs m	8,865	6,572	-25.9
Fixed Assets	Rs m	8,281	7,585	-8.4
Total Assets	Rs m	17,146	14,157	-17.4

ELECON ENGINEERING Cash Flow Statement Analysis

• ELECON ENGINEERING's cash flow from operating activities (CFO) during FY23 stood at Rs 3 billion, an improvement of 18.0% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -1 billion, an improvement of 1,121.8% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -1 billion, an improvement of 44% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 103 million from the Rs -118 million net cash flows seen during FY22.

ELECON ENGINEERING Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	2,500	2,952	18.0%
Cash Flow from Investing Activities	Rs m	-118	-1,447	-
Cash Flow from Financing Activities	Rs m	-2,500	-1,401	-
Net Cash Flow	Rs m	-118	103	-

Current Valuations for ELECON ENGINEERING

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 16.8, an improvement from the EPS of Rs 12.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 562.7, stands at 27.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.8 times, while the price to sales ratio stands at 5.3 times.
• The company's price to cash flow (P/CF) ratio stood at 15.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	107.3	106.7
TTM Earnings per share	Rs	12.4	16.8
Diluted earnings per share	Rs	12.4	16.8
Price to Cash Flow	x	8.6	15.3
TTM P/E ratio	x	11.6	27.0
Price / Book Value ratio	x	1.5	3.2
Market Cap	Rs m	15,733	34,712
Dividends per share (Unadj.)	Rs	1.4	2.0

Ratio Analysis for ELECON ENGINEERING

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.3x during FY23, from 1.6x during FY22. 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 22.0x during FY23, from 5.4x during FY22. 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 17.4% during FY23, from 13.2% during FY23. 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 23.9% during FY23, from 19.4% during FY22. 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 14.1% during FY23, from 10.3% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	1.6	2.3
Debtors’ Days	Days	1,259	913
Interest coverage	x	5.4	22.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	10.3	14.1
Return on equity	%	13.2	17.4
Return on capital employed	%	19.4	23.9

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

ELECON ENGINEERING Share Price Performance

Over the last one year, ELECON ENGINEERING share price has moved up from Rs 250.1 to Rs 562.7, registering a gain of Rs 312.7 or around 125.0%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 38,993.2 (up 0.5%). Over the last one year it has moved up from 26,517.5 to 38,993.2, a gain of 12,476 points (up 47.0%).

Overall, the S&P BSE SENSEX is up 13.7% over the year.

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