CHEMBOND CHEMICALS 2022-23 Annual Report Analysis

Wed, 16 Aug

CHEMBOND CHEMICALS 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.

CHEMBOND CHEMICALS Income Statement Analysis

• Operating income during the year rose 26.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 102.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 7.9% in FY23 as against 4.9% in FY22.
• Depreciation charges increased by 0.6% and finance costs increased by 51.1% YoY, respectively.
• Other income declined by 46.2% YoY.
• Net profit for the year grew by 77.1% YoY.
• Net profit margins during the year grew from 4.0% in FY22 to 5.6% in FY23.

CHEMBOND CHEMICALS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	3,487	4,397	26.1%
Other income	Rs m	86	46	-46.2%
Total Revenues	Rs m	3,574	4,443	24.3%
Gross profit	Rs m	171	346	102.3%
Depreciation	Rs m	45	45	0.6%
Interest	Rs m	7	10	51.1%
Profit before tax	Rs m	205	337	63.9%
Tax	Rs m	66	89	35.8%
Profit after tax	Rs m	140	248	77.1%
Gross profit margin	%	4.9	7.9
Effective tax rate	%	31.9	26.4
Net profit margin	%	4.0	5.6

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CHEMBOND CHEMICALS Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 769 million as compared to Rs 540 million in FY22, thereby witnessing an increase of 42.5%.
• Long-term debt stood at Rs 8 million as compared to Rs 7 million during FY22, a growth of 11.8%.
• Current assets rose 8% and stood at Rs 2 billion, while fixed assets rose 14% and stood at Rs 2 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 4 billion as against Rs 4 billion during FY22, thereby witnessing a growth of 11%.

CHEMBOND CHEMICALS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	3,040	3,219	5.9
Current Liabilities	Rs m	540	769	42.5
Long-term Debt	Rs m	7	8	11.8
Total Liabilities	Rs m	3,588	3,986	11.1
Current assets	Rs m	1,936	2,094	8.2
Fixed Assets	Rs m	1,652	1,886	14.2
Total Assets	Rs m	3,588	3,986	11.1

CHEMBOND CHEMICALS Cash Flow Statement Analysis

• CHEMBOND CHEMICALS's cash flow from operating activities (CFO) during FY23 stood at Rs 22 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs 1 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -21 million, an improvement of 50% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 2 million from the Rs -164 million net cash flows seen during FY22.

CHEMBOND CHEMICALS 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	-105	22	-
Cash Flow from Investing Activities	Rs m	-19	1	-
Cash Flow from Financing Activities	Rs m	-41	-21	-
Net Cash Flow	Rs m	-164	2	-

Current Valuations for CHEMBOND CHEMICALS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 18.4, an improvement from the EPS of Rs 10.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 403.8, stands at 15.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.7 times, while the price to sales ratio stands at 1.2 times.
• The company's price to cash flow (P/CF) ratio stood at 10.6 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	259.3	326.9
TTM Earnings per share	Rs	10.4	18.4
Diluted earnings per share	Rs	10.4	18.4
Price to Cash Flow	x	13.0	10.6
TTM P/E ratio	x	17.2	15.6
Price / Book Value ratio	x	1.0	1.0
Market Cap	Rs m	3,039	3,097
Dividends per share (Unadj.)	Rs	5.0	3.0

Ratio Analysis for CHEMBOND CHEMICALS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.7x during FY23, from 3.6x 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 33.3x during FY23, from 30.8x 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 7.7% during FY23, from 4.6% 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 10.8% during FY23, from 7.0% 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 6.5% during FY23, from 4.1% 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	3.6	2.7
Debtors’ Days	Days	938	956
Interest coverage	x	30.8	33.3
Debt to equity ratio	x	0.0	0.0
Return on assets	%	4.1	6.5
Return on equity	%	4.6	7.7
Return on capital employed	%	7.0	10.8

To see how CHEMBOND CHEMICALS has performed over the last 5 years, please visit here.

CHEMBOND CHEMICALS Share Price Performance

Over the last one year, CHEMBOND CHEMICALS share price has moved up from Rs 169.6 to Rs 403.8, registering a gain of Rs 234.2 or around 138.1%.

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

(To know more, check out historical annual results for CHEMBOND CHEMICALS and quarterly results for CHEMBOND CHEMICALS)