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BIRLA CORPORATION 2022-23 Annual Report Analysis

Thu, 7 Sep

BIRLA CORPORATION 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.

BIRLA CORPORATION Income Statement Analysis

• Operating income during the year rose 16.4% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 27.6% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 9.0% in FY23 as against 14.4% in FY22.
• Depreciation charges increased by 28.5% and finance costs increased by 39.6% YoY, respectively.
• Other income grew by 11.7% YoY.
• Net profit for the year declined by 89.8% YoY.
• Net profit margins during the year declined from 5.3% in FY22 to 0.5% in FY23.

BIRLA CORPORATION Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	74,612	86,823	16.4%
Other income	Rs m	1,012	1,131	11.7%
Total Revenues	Rs m	75,625	87,953	16.3%
Gross profit	Rs m	10,761	7,787	-27.6%
Depreciation	Rs m	3,969	5,099	28.5%
Interest	Rs m	2,427	3,387	39.6%
Profit before tax	Rs m	5,378	431	-92.0%
Tax	Rs m	1,392	26	-98.1%
Profit after tax	Rs m	3,986	405	-89.8%
Gross profit margin	%	14.4	9.0
Effective tax rate	%	25.9	6.1
Net profit margin	%	5.3	0.5

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BIRLA CORPORATION Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 23 billion as compared to Rs 21 billion in FY22, thereby witnessing an increase of 9.3%.
• Long-term debt stood at Rs 38 billion as compared to Rs 38 billion during FY22, a growth of 1.3%.
• Current assets rose 5% and stood at Rs 30 billion, while fixed assets rose 1% and stood at Rs 111 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 141 billion as against Rs 139 billion during FY22, thereby witnessing a growth of 2%.

BIRLA CORPORATION Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	60,489	59,808	-1.1
Current Liabilities	Rs m	21,357	23,340	9.3
Long-term Debt	Rs m	37,906	38,383	1.3
Total Liabilities	Rs m	138,525	140,720	1.6
Current assets	Rs m	28,660	30,192	5.3
Fixed Assets	Rs m	109,855	110,521	0.6
Total Assets	Rs m	138,525	140,720	1.6

BIRLA CORPORATION Cash Flow Statement Analysis

• BIRLA CORPORATION's cash flow from operating activities (CFO) during FY23 stood at Rs 8 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -4 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -3 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 1 billion from the Rs -62 million net cash flows seen during FY22.

BIRLA CORPORATION 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	10,392	8,055	-22.5%
Cash Flow from Investing Activities	Rs m	-7,751	-3,650	-
Cash Flow from Financing Activities	Rs m	-2,703	-3,183	-
Net Cash Flow	Rs m	-62	1,221	-

Current Valuations for BIRLA CORPORATION

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 5.3, an decline from the EPS of Rs 51.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,235.2, stands at 248.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.6 times, while the price to sales ratio stands at 1.1 times.
• The company's price to cash flow (P/CF) ratio stood at 14.4 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	968.9	1,127.4
TTM Earnings per share	Rs	51.8	5.3
Diluted earnings per share	Rs	51.8	5.3
Price to Cash Flow	x	11.4	14.4
TTM P/E ratio	x	22.8	248.4
Price / Book Value ratio	x	1.6	1.3
Market Cap	Rs m	98,084	79,115
Dividends per share (Unadj.)	Rs	10.0	2.5

Ratio Analysis for BIRLA CORPORATION

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.3x during FY23, from 1.3x 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 1.1x during FY23, from 3.2x 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 0.7% during FY23, from 6.6% 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 3.9% during FY23, from 7.9% 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 2.7% during FY23, from 4.6% 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	1.3	1.3
Debtors’ Days	Days	1	1
Interest coverage	x	3.2	1.1
Debt to equity ratio	x	0.6	0.6
Return on assets	%	4.6	2.7
Return on equity	%	6.6	0.7
Return on capital employed	%	7.9	3.9

To see how BIRLA CORPORATION has performed over the last 5 years, please visit here.

BIRLA CORPORATION Share Price Performance

Over the last one year, BIRLA CORPORATION share price has moved up from Rs 1,048.5 to Rs 1,235.2, registering a gain of Rs 186.7 or around 17.8%.

Overall, the S&P BSE SENSEX is up 11.6% over the year.

(To know more, check out historical annual results for BIRLA CORPORATION and quarterly results for BIRLA CORPORATION)