AAREY DRUGS 2022-23 Annual Report Analysis

Thu, 17 Aug

AAREY DRUGS 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.

AAREY DRUGS Income Statement Analysis

• Operating income during the year fell 15.0% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 32.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 1.8% in FY23 as against 2.3% in FY22.
• Depreciation charges decreased by 20.8% and finance costs increased by 40.7% YoY, respectively.
• Other income grew by 2.3% YoY.
• Net profit for the year declined by 42.5% YoY.
• Net profit margins during the year declined from 1.3% in FY22 to 0.9% in FY23.

AAREY DRUGS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	4,928	4,190	-15.0%
Other income	Rs m	27	27	2.3%
Total Revenues	Rs m	4,954	4,217	-14.9%
Gross profit	Rs m	114	77	-32.2%
Depreciation	Rs m	20	16	-20.8%
Interest	Rs m	20	29	40.7%
Profit before tax	Rs m	100	60	-40.1%
Tax	Rs m	35	22	-35.7%
Profit after tax	Rs m	66	38	-42.5%
Gross profit margin	%	2.3	1.8
Effective tax rate	%	34.7	37.3
Net profit margin	%	1.3	0.9

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AAREY DRUGS Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 2 billion as compared to Rs 1 billion in FY22, thereby witnessing an increase of 32.7%.
• Long-term debt stood at Rs 44 million as compared to Rs 33 million during FY22, a growth of 30.6%.
• Current assets rose 24% and stood at Rs 3 billion, while fixed assets fell 21% and stood at Rs 207 million in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 3 billion as against Rs 2 billion during FY22, thereby witnessing a growth of 19%.

AAREY DRUGS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	1,113	1,151	3.4
Current Liabilities	Rs m	1,267	1,681	32.7
Long-term Debt	Rs m	33	44	30.6
Total Liabilities	Rs m	2,452	2,913	18.8
Current assets	Rs m	2,188	2,706	23.7
Fixed Assets	Rs m	264	207	-21.4
Total Assets	Rs m	2,452	2,913	18.8

AAREY DRUGS Cash Flow Statement Analysis

• AAREY DRUGS's cash flow from operating activities (CFO) during FY23 stood at Rs -13 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs 4 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 14 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 5 million from the Rs -5 million net cash flows seen during FY22.

AAREY DRUGS 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	5	-13	-
Cash Flow from Investing Activities	Rs m	-32	4	-
Cash Flow from Financing Activities	Rs m	23	14	-39.9%
Net Cash Flow	Rs m	-5	5	-

Current Valuations for AAREY DRUGS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 1.5, an decline from the EPS of Rs 2.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 46.0, stands at 31.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.0 times, while the price to sales ratio stands at 0.3 times.
• The company's price to cash flow (P/CF) ratio stood at 17.3 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	194.2	165.1
TTM Earnings per share	Rs	2.6	1.5
Diluted earnings per share	Rs	2.6	1.5
Price to Cash Flow	x	12.3	17.3
TTM P/E ratio	x	16.1	31.6
Price / Book Value ratio	x	1.0	0.8
Market Cap	Rs m	1,099	925
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for AAREY DRUGS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.6x during FY23, from 1.7x 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 3.1x during FY23, from 5.9x 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 3.3% during FY23, from 5.9% 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 7.4% during FY23, from 10.5% 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 declined and down at 2.3% during FY23, from 3.5% 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	1.7	1.6
Debtors’ Days	Days	1,009	1,653
Interest coverage	x	5.9	3.1
Debt to equity ratio	x	0.0	0.0
Return on assets	%	3.5	2.3
Return on equity	%	5.9	3.3
Return on capital employed	%	10.5	7.4

To see how AAREY DRUGS has performed over the last 5 years, please visit here.

AAREY DRUGS Share Price Performance

Over the last one year, AAREY DRUGS share price has moved up from Rs 35.3 to Rs 46.0, registering a gain of Rs 10.7 or around 30.3%.

Overall, the S&P BSE SENSEX is up 8.9% over the year.

(To know more, check out historical annual results for AAREY DRUGS and quarterly results for AAREY DRUGS)