3M INDIA 2022-23 Annual Report Analysis

Mon, 14 Aug

3M INDIA 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.

3M INDIA Income Statement Analysis

• Operating income during the year rose 18.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 55.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 15.3% in FY23 as against 11.7% in FY22.
• Depreciation charges increased by 4.6% and finance costs increased by 95.4% YoY, respectively.
• Other income grew by 83.5% YoY.
• Net profit for the year grew by 65.8% YoY.
• Net profit margins during the year grew from 8.2% in FY22 to 11.4% in FY23.

3M INDIA Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	33,358	39,594	18.7%
Other income	Rs m	371	681	83.5%
Total Revenues	Rs m	33,730	40,275	19.4%
Gross profit	Rs m	3,892	6,043	55.2%
Depreciation	Rs m	551	577	4.6%
Interest	Rs m	37	73	95.4%
Profit before tax	Rs m	3,675	6,074	65.3%
Tax	Rs m	955	1,564	63.7%
Profit after tax	Rs m	2,720	4,510	65.8%
Gross profit margin	%	11.7	15.3
Effective tax rate	%	26.0	25.8
Net profit margin	%	8.2	11.4

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3M INDIA Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 10 billion as compared to Rs 8 billion in FY22, thereby witnessing an increase of 28.9%.
• Current assets fell 13% and stood at Rs 21 billion, while fixed assets rose 4% and stood at Rs 6 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 27 billion as against Rs 30 billion during FY22, thereby witnessing a fall of 10%.

3M INDIA Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	21,836	16,775	-23.2
Current Liabilities	Rs m	7,605	9,803	28.9
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	29,731	26,871	-9.6
Current assets	Rs m	24,370	21,274	-12.7
Fixed Assets	Rs m	5,361	5,597	4.4
Total Assets	Rs m	29,731	26,871	-9.6

3M INDIA Cash Flow Statement Analysis

• 3M INDIA's cash flow from operating activities (CFO) during FY23 stood at Rs 5 billion, an improvement of 42.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -155 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -10 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -5 billion from the Rs 3 billion net cash flows seen during FY22.

3M INDIA 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	3,274	4,655	42.2%
Cash Flow from Investing Activities	Rs m	-407	-155	-
Cash Flow from Financing Activities	Rs m	-212	-9,797	-
Net Cash Flow	Rs m	2,654	-5,297	-

Current Valuations for 3M INDIA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 400.2, an improvement from the EPS of Rs 241.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 28,928.1, stands at 65.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 19.4 times, while the price to sales ratio stands at 8.2 times.
• The company's price to cash flow (P/CF) ratio stood at 47.1 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	2,959.9	3,513.2
TTM Earnings per share	Rs	241.3	400.2
Diluted earnings per share	Rs	241.4	400.4
Price to Cash Flow	x	67.7	47.1
TTM P/E ratio	x	81.5	65.7
Price / Book Value ratio	x	13.0	14.3
Market Cap	Rs m	283,519	239,609
Dividends per share (Unadj.)	Rs	0.0	950.0

Ratio Analysis for 3M INDIA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.2x during FY23, from 3.2x 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 84.6x during FY23, from 99.8x 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 improved and stood at 26.9% during FY23, from 12.5% 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 36.6% during FY23, from 17.0% 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 17.1% during FY23, from 9.3% 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	3.2	2.2
Debtors’ Days	Days	577	585
Interest coverage	x	99.8	84.6
Debt to equity ratio	x	0.0	0.0
Return on assets	%	9.3	17.1
Return on equity	%	12.5	26.9
Return on capital employed	%	17.0	36.6

To see how 3M INDIA has performed over the last 5 years, please visit here.

3M INDIA Share Price Performance

Over the last one year, 3M INDIA share price has moved up from Rs 22,436.2 to Rs 28,928.1, registering a gain of Rs 6,491.9 or around 28.9%.

Overall, the S&P BSE SENSEX is up 10.5% over the year.

(To know more, check out historical annual results for 3M INDIA and quarterly results for 3M INDIA)