FORCE MOTORS 2022-23 Annual Report Analysis

Tue, 3 Oct

FORCE MOTORS 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.

FORCE MOTORS Income Statement Analysis

• Operating income during the year rose 55.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 929.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 10.3% in FY23 as against 1.6% in FY22.
• Depreciation charges increased by 26.1% and finance costs increased by 66.7% YoY, respectively.
• Other income grew by 19.6% YoY.
• Net profit for the year declined by NA YoY.
• Net profit margins during the year grew from 2.8% in FY22 to 2.7% in FY23.

FORCE MOTORS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	32,404	50,290	55.2%
Other income	Rs m	519	620	19.6%
Total Revenues	Rs m	32,923	50,910	54.6%
Gross profit	Rs m	505	5,195	929.6%
Depreciation	Rs m	1,909	2,407	26.1%
Interest	Rs m	410	684	66.7%
Profit before tax	Rs m	-1,296	2,724	NA
Tax	Rs m	-387	1,387	NA
Profit after tax	Rs m	-910	1,337	NA
Gross profit margin	%	1.6	10.3
Effective tax rate	%	29.8	50.9
Net profit margin	%	-2.8	2.7

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FORCE MOTORS Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 15 billion as compared to Rs 13 billion in FY22, thereby witnessing an increase of 17.7%.
• Long-term debt down at Rs 6 billion as compared to Rs 6 billion during FY22, a fall of 0.9%.
• Current assets rose 52% and stood at Rs 16 billion, while fixed assets fell 4% and stood at Rs 24 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 40 billion as against Rs 36 billion during FY22, thereby witnessing a growth of 12%.

FORCE MOTORS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	17,479	18,750	7.3
Current Liabilities	Rs m	12,826	15,094	17.7
Long-term Debt	Rs m	6,006	5,950	-0.9
Total Liabilities	Rs m	35,669	40,076	12.4
Current assets	Rs m	10,269	15,652	52.4
Fixed Assets	Rs m	25,400	24,424	-3.8
Total Assets	Rs m	35,669	40,076	12.4

FORCE MOTORS Cash Flow Statement Analysis

• FORCE MOTORS's cash flow from operating activities (CFO) during FY23 stood at Rs 5 billion, an improvement of 2,786.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -3 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -2 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 684 million from the Rs 375 million net cash flows seen during FY22.

FORCE MOTORS 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	184	5,317	2,786.8%
Cash Flow from Investing Activities	Rs m	-3,557	-2,565	-
Cash Flow from Financing Activities	Rs m	3,748	-2,069	-
Net Cash Flow	Rs m	375	684	82.7%

Current Valuations for FORCE MOTORS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 101.5, an improvement from the EPS of Rs -69.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 3,875.2, stands at 21.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.7 times, while the price to sales ratio stands at 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 4.5 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	2,458.6	3,815.6
TTM Earnings per share	Rs	-69.0	101.5
Diluted earnings per share	Rs	-69.1	101.5
Price to Cash Flow	x	13.5	4.5
TTM P/E ratio	x	-18.2	21.6
Price / Book Value ratio	x	1.0	0.9
Market Cap	Rs m	17,854	16,746
Dividends per share (Unadj.)	Rs	10.0	10.0

Ratio Analysis for FORCE MOTORS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.0x during FY23, from 0.8x 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 5.0x during FY23, from -2.2x 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 improved and stood at 7.1% during FY23, from -5.2% 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 13.8% during FY23, from -3.8% 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 5.0% during FY23, from -1.4% 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	0.8	1.0
Debtors’ Days	Days	213	143
Interest coverage	x	-2.2	5.0
Debt to equity ratio	x	0.3	0.3
Return on assets	%	-1.4	5.0
Return on equity	%	-5.2	7.1
Return on capital employed	%	-3.8	13.8

To see how FORCE MOTORS has performed over the last 5 years, please visit here.

FORCE MOTORS Share Price Performance

Over the last one year, FORCE MOTORS share price has moved up from Rs 1,217.2 to Rs 3,875.2, registering a gain of Rs 2,658.0 or around 218.4%.

Meanwhile, the S&P BSE AUTO Index is trading at Rs 36,151.7 (down 1.3%). Over the last one year it has moved up from 28,560.8 to 36,151.7, a gain of 7,591 points (up 26.6%).

Overall, the S&P BSE SENSEX is up 15.7% over the year.

(To know more, check out historical annual results for FORCE MOTORS and quarterly results for FORCE MOTORS)