BALKRISHNA INDUSTRIES 2022-23 Annual Report Analysis

Sun, 2 Jul

BALKRISHNA INDUSTRIES 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.

BALKRISHNA INDUSTRIES Income Statement Analysis

• Operating income during the year rose 17.7% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 14.8% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 17.8% in FY23 as against 24.6% in FY22.
• Depreciation charges increased by 25.4% and finance costs increased by 100.9% YoY, respectively.
• Other income declined by 20.9% YoY.
• Net profit for the year declined by 26.3% YoY.
• Net profit margins during the year declined from 17.3% in FY22 to 10.8% in FY23.

BALKRISHNA INDUSTRIES Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	82,951	97,595	17.7%
Other income	Rs m	4,379	3,465	-20.9%
Total Revenues	Rs m	87,330	101,061	15.7%
Gross profit	Rs m	20,378	17,359	-14.8%
Depreciation	Rs m	4,554	5,708	25.4%
Interest	Rs m	382	768	100.9%
Profit before tax	Rs m	19,822	14,348	-27.6%
Tax	Rs m	5,468	3,774	-31.0%
Profit after tax	Rs m	14,354	10,574	-26.3%
Gross profit margin	%	24.6	17.8
Effective tax rate	%	27.6	26.3
Net profit margin	%	17.3	10.8

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BALKRISHNA INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 33 billion as compared to Rs 32 billion in FY22, thereby witnessing an increase of 3.5%.
• Long-term debt stood at Rs 10 billion as compared to Rs 5 billion during FY22, a growth of 107.2%.
• Current assets rose 1% and stood at Rs 39 billion, while fixed assets rose 19% and stood at Rs 84 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 123 billion as against Rs 110 billion during FY22, thereby witnessing a growth of 12%.

BALKRISHNA INDUSTRIES Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	69,330	75,569	9.0
Current Liabilities	Rs m	32,356	33,493	3.5
Long-term Debt	Rs m	5,010	10,381	107.2
Total Liabilities	Rs m	109,790	123,477	12.5
Current assets	Rs m	38,942	39,280	0.9
Fixed Assets	Rs m	70,848	84,197	18.8
Total Assets	Rs m	109,790	123,477	12.5

BALKRISHNA INDUSTRIES Cash Flow Statement Analysis

• BALKRISHNA INDUSTRIES's cash flow from operating activities (CFO) during FY23 stood at Rs 14 billion, an improvement of 59.5% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -18 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 4 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 234 million from the Rs -90 million net cash flows seen during FY22.

BALKRISHNA INDUSTRIES 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	9,080	14,480	59.5%
Cash Flow from Investing Activities	Rs m	-18,975	-17,831	-
Cash Flow from Financing Activities	Rs m	9,804	3,585	-63.4%
Net Cash Flow	Rs m	-90	234	-

Current Valuations for BALKRISHNA INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 54.7, an decline from the EPS of Rs 74.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,370.1, stands at 43.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.1 times, while the price to sales ratio stands at 4.7 times.
• The company's price to cash flow (P/CF) ratio stood at 25.2 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	429.1	504.8
TTM Earnings per share	Rs	74.2	54.7
Diluted earnings per share	Rs	74.2	54.7
Price to Cash Flow	x	21.9	25.2
TTM P/E ratio	x	28.8	43.3
Price / Book Value ratio	x	6.0	5.4
Market Cap	Rs m	413,447	410,992
Dividends per share (Unadj.)	Rs	28.0	20.0

Ratio Analysis for BALKRISHNA INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.2x during FY23, from 1.2x 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 19.7x during FY23, from 52.8x 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 14.0% during FY23, from 20.7% 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 17.6% during FY23, from 27.2% 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 9.2% during FY23, from 13.4% 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	1.2	1.2
Debtors’ Days	Days	482	417
Interest coverage	x	52.8	19.7
Debt to equity ratio	x	0.1	0.1
Return on assets	%	13.4	9.2
Return on equity	%	20.7	14.0
Return on capital employed	%	27.2	17.6

To see how BALKRISHNA INDUSTRIES has performed over the last 5 years, please visit here.

BALKRISHNA INDUSTRIES Share Price Performance

Over the last one year, BALKRISHNA INDUSTRIES share price has moved up from Rs 2,172.0 to Rs 2,370.1, registering a gain of Rs 198.1 or around 9.1%.

Overall, the S&P BSE SENSEX is up 21.7% over the year.

(To know more, check out historical annual results for BALKRISHNA INDUSTRIES and quarterly results for BALKRISHNA INDUSTRIES)