BHARAT FORGE 2022-23 Annual Report Analysis

Wed, 19 Jul

BHARAT FORGE 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.

BHARAT FORGE Income Statement Analysis

• Operating income during the year rose 23.4% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 20.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 12.6% in FY23 as against 19.4% in FY22.
• Depreciation charges increased by 0.7% and finance costs increased by 86.2% YoY, respectively.
• Other income declined by 2.3% YoY.
• Net profit for the year declined by 52.8% YoY.
• Net profit margins during the year declined from 10.3% in FY22 to 3.9% in FY23.

BHARAT FORGE Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	104,611	129,103	23.4%
Other income	Rs m	2,438	2,383	-2.3%
Total Revenues	Rs m	107,049	131,485	22.8%
Gross profit	Rs m	20,274	16,229	-20.0%
Depreciation	Rs m	7,303	7,356	0.7%
Interest	Rs m	1,604	2,986	86.2%
Profit before tax	Rs m	13,805	8,269	-40.1%
Tax	Rs m	3,035	3,186	5.0%
Profit after tax	Rs m	10,771	5,084	-52.8%
Gross profit margin	%	19.4	12.6
Effective tax rate	%	22.0	38.5
Net profit margin	%	10.3	3.9

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BHARAT FORGE Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 83 billion as compared to Rs 61 billion in FY22, thereby witnessing an increase of 35.4%.
• Long-term debt down at Rs 18 billion as compared to Rs 18 billion during FY22, a fall of 2.0%.
• Current assets rose 14% and stood at Rs 90 billion, while fixed assets rose 22% and stood at Rs 92 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 182 billion as against Rs 155 billion during FY22, thereby witnessing a growth of 18%.

BHARAT FORGE Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	65,690	67,018	2.0
Current Liabilities	Rs m	61,142	82,769	35.4
Long-term Debt	Rs m	17,873	17,513	-2.0
Total Liabilities	Rs m	154,918	182,347	17.7
Current assets	Rs m	79,310	90,020	13.5
Fixed Assets	Rs m	75,609	92,326	22.1
Total Assets	Rs m	154,918	182,347	17.7

BHARAT FORGE Cash Flow Statement Analysis

• BHARAT FORGE's cash flow from operating activities (CFO) during FY23 stood at Rs 13 billion, an improvement of 155.9% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -17 billion, an improvement of 142.2% 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 -497 million from the Rs 1 billion net cash flows seen during FY22.

BHARAT FORGE 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	5,058	12,945	155.9%
Cash Flow from Investing Activities	Rs m	-6,901	-16,713	-
Cash Flow from Financing Activities	Rs m	3,102	2,803	-9.6%
Net Cash Flow	Rs m	1,111	-497	-

Current Valuations for BHARAT FORGE

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 10.9, an decline from the EPS of Rs 23.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 854.2, stands at 73.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.9 times, while the price to sales ratio stands at 3.1 times.
• The company's price to cash flow (P/CF) ratio stood at 28.4 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	224.7	277.3
TTM Earnings per share	Rs	23.1	10.9
Diluted earnings per share	Rs	23.1	10.9
Price to Cash Flow	x	18.1	28.4
TTM P/E ratio	x	29.4	73.4
Price / Book Value ratio	x	5.0	5.3
Market Cap	Rs m	326,750	353,149
Dividends per share (Unadj.)	Rs	7.0	7.0

Ratio Analysis for BHARAT FORGE

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.1x 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 3.8x during FY23, from 9.6x 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 7.6% during FY23, from 16.4% 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 13.3% during FY23, from 18.4% 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 declined and down at 4.4% during FY23, from 8.0% 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	1.1
Debtors’ Days	Days	75	87
Interest coverage	x	9.6	3.8
Debt to equity ratio	x	0.3	0.3
Return on assets	%	8.0	4.4
Return on equity	%	16.4	7.6
Return on capital employed	%	18.4	13.3

To see how BHARAT FORGE has performed over the last 5 years, please visit here.

BHARAT FORGE Share Price Performance

Over the last one year, BHARAT FORGE share price has moved up from Rs 668.5 to Rs 854.2, registering a gain of Rs 185.7 or around 27.8%.

Overall, the S&P BSE SENSEX is up 22.6% over the year.

(To know more, check out historical annual results for BHARAT FORGE and quarterly results for BHARAT FORGE)