CARE RATING 2022-23 Annual Report Analysis

Sun, 9 Jul

CARE RATING 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.

CARE RATING Income Statement Analysis

• Operating income during the year rose 12.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 24.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 35.6% in FY23 as against 32.1% in FY22.
• Depreciation charges increased by 36.6% and finance costs increased by 115.9% YoY, respectively.
• Other income grew by 39.5% YoY.
• Net profit for the year grew by 11.2% YoY.
• Net profit margins during the year declined from 31.0% in FY22 to 30.6% in FY23.

CARE RATING Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	2,476	2,790	12.7%
Other income	Rs m	272	379	39.5%
Total Revenues	Rs m	2,748	3,169	15.3%
Gross profit	Rs m	796	993	24.8%
Depreciation	Rs m	77	105	36.6%
Interest	Rs m	5	10	115.9%
Profit before tax	Rs m	986	1,257	27.5%
Tax	Rs m	218	403	84.8%
Profit after tax	Rs m	768	855	11.2%
Gross profit margin	%	32.1	35.6
Effective tax rate	%	22.1	32.0
Net profit margin	%	31.0	30.6

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CARE RATING Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 2 billion as compared to Rs 6 billion in FY22, thereby witnessing an decrease of -57.3%.
• Current assets fell 28% and stood at Rs 8 billion, while fixed assets rose 4% and stood at Rs 2 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 10 billion as against Rs 13 billion during FY22, thereby witnessing a fall of 24%.

CARE RATING Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	6,396	6,658	4.1
Current Liabilities	Rs m	5,836	2,489	-57.3
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	12,574	9,607	-23.6
Current assets	Rs m	10,963	7,929	-27.7
Fixed Assets	Rs m	1,611	1,678	4.2
Total Assets	Rs m	12,574	9,607	-23.6

CARE RATING Cash Flow Statement Analysis

• CARE RATING's cash flow from operating activities (CFO) during FY23 stood at Rs 822 million, an improvement of 20.9% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs 129 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -633 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 318 million from the Rs 55 million net cash flows seen during FY22.

CARE RATING 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	680	822	20.9%
Cash Flow from Investing Activities	Rs m	-273	129	-
Cash Flow from Financing Activities	Rs m	-351	-633	-
Net Cash Flow	Rs m	55	318	473.1%

Current Valuations for CARE RATING

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 28.8, an improvement from the EPS of Rs 25.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 710.3, stands at 24.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.2 times, while the price to sales ratio stands at 7.6 times.
• The company's price to cash flow (P/CF) ratio stood at 17.0 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	83.5	93.9
TTM Earnings per share	Rs	25.9	28.8
Diluted earnings per share	Rs	25.8	28.7
Price to Cash Flow	x	18.0	17.0
TTM P/E ratio	x	19.8	24.7
Price / Book Value ratio	x	2.8	2.5
Market Cap	Rs m	17,805	16,346
Dividends per share (Unadj.)	Rs	17.0	25.0

Ratio Analysis for CARE RATING

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.2x during FY23, from 1.9x 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 126.5x during FY23, from 213.6x 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 improved and stood at 12.8% during FY23, from 12.0% 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 19.0% during FY23, from 15.5% 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 9.0% during FY23, from 6.1% 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	1.9	3.2
Debtors’ Days	Days	245	281
Interest coverage	x	213.6	126.5
Debt to equity ratio	x	0.0	0.0
Return on assets	%	6.1	9.0
Return on equity	%	12.0	12.8
Return on capital employed	%	15.5	19.0

To see how CARE RATING has performed over the last 5 years, please visit here.

CARE RATING Share Price Performance

Over the last one year, CARE RATING share price has moved up from Rs 420.5 to Rs 710.3, registering a gain of Rs 289.8 or around 68.9%.

Overall, the S&P BSE SENSEX is up 22.9% over the year.

(To know more, check out historical annual results for CARE RATING and quarterly results for CARE RATING)