ADF FOODS 2022-23 Annual Report Analysis

Wed, 19 Jul

ADF FOODS 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.

ADF FOODS Income Statement Analysis

• Operating income during the year rose 6.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 21.1% YoY during the fiscal. Operating profit margins witnessed a fall and down at 17.9% in FY23 as against 15.8% in FY22.
• Depreciation charges increased by 51.2% and finance costs increased by 46.7% YoY, respectively.
• Other income grew by 18.5% YoY.
• Net profit for the year grew by 15.1% YoY.
• Net profit margins during the year grew from 11.5% in FY22 to 12.4% in FY23.

ADF FOODS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	4,212	4,503	6.9%
Other income	Rs m	95	112	18.5%
Total Revenues	Rs m	4,307	4,615	7.2%
Gross profit	Rs m	666	806	21.1%
Depreciation	Rs m	91	137	51.2%
Interest	Rs m	18	27	46.7%
Profit before tax	Rs m	651	755	15.9%
Tax	Rs m	166	196	18.0%
Profit after tax	Rs m	485	559	15.1%
Gross profit margin	%	15.8	17.9
Effective tax rate	%	25.5	26.0
Net profit margin	%	11.5	12.4

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ADF FOODS Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 431 million as compared to Rs 558 million in FY22, thereby witnessing an decrease of -22.8%.
• Current assets rose 10% and stood at Rs 3 billion, while fixed assets rose 13% and stood at Rs 2 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 5 billion as against Rs 5 billion during FY22, thereby witnessing a growth of 11%.

ADF FOODS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	3,339	4,192	25.6
Current Liabilities	Rs m	558	431	-22.8
Long-term Debt	Rs m	107	0	-100.0
Total Liabilities	Rs m	4,679	5,204	11.2
Current assets	Rs m	2,994	3,299	10.2
Fixed Assets	Rs m	1,684	1,905	13.1
Total Assets	Rs m	4,679	5,204	11.2

ADF FOODS Cash Flow Statement Analysis

• ADF FOODS's cash flow from operating activities (CFO) during FY23 stood at Rs 505 million, an improvement of 48.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -629 million, an improvement of 16.9% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -48 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -144 million from the Rs 144 million net cash flows seen during FY22.

ADF FOODS 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	341	505	48.2%
Cash Flow from Investing Activities	Rs m	-538	-629	-
Cash Flow from Financing Activities	Rs m	330	-48	-
Net Cash Flow	Rs m	144	-144	-

Current Valuations for ADF FOODS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 25.4, an improvement from the EPS of Rs 23.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,071.6, stands at 42.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.6 times, while the price to sales ratio stands at 5.2 times.
• The company's price to cash flow (P/CF) ratio stood at 24.2 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	200.9	205.0
TTM Earnings per share	Rs	23.1	25.4
Diluted earnings per share	Rs	22.1	25.4
Price to Cash Flow	x	29.5	24.2
TTM P/E ratio	x	35.0	42.2
Price / Book Value ratio	x	5.4	4.0
Market Cap	Rs m	18,077	16,832
Dividends per share (Unadj.)	Rs	4.0	5.0

Ratio Analysis for ADF FOODS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 7.7x during FY23, from 5.4x 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 deteriorated and stood at 29.4x during FY23, from 37.0x 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 declined and down at 13.3% during FY23, from 14.5% 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 declined and down at 18.6% 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 11.2% during FY23, from 10.8% 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	5.4	7.7
Debtors’ Days	Days	615	764
Interest coverage	x	37.0	29.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	10.8	11.2
Return on equity	%	14.5	13.3
Return on capital employed	%	19.4	18.6

To see how ADF FOODS has performed over the last 5 years, please visit here.

ADF FOODS Share Price Performance

Over the last one year, ADF FOODS share price has moved up from Rs 703.1 to Rs 1,071.6, registering a gain of Rs 368.5 or around 52.4%.

Overall, the S&P BSE SENSEX is up 22.7% over the year.

(To know more, check out historical annual results for ADF FOODS and quarterly results for ADF FOODS)