CESC 2022-23 Annual Report Analysis

Fri, 21 Jul

CESC 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.

CESC Income Statement Analysis

• Operating income during the year rose 13.6% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 5.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 24.9% in FY23 as against 30.0% in FY22.
• Depreciation charges decreased by 0.8% and finance costs decreased by 0.5% YoY, respectively.
• Other income grew by 6.1% YoY.
• Net profit for the year declined by 0.5% YoY.
• Net profit margins during the year declined from 11.2% in FY22 to 9.8% in FY23.

CESC Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	125,439	142,464	13.6%
Other income	Rs m	2,911	3,088	6.1%
Total Revenues	Rs m	128,349	145,551	13.4%
Gross profit	Rs m	37,570	35,497	-5.5%
Depreciation	Rs m	8,847	8,779	-0.8%
Interest	Rs m	12,479	12,415	-0.5%
Profit before tax	Rs m	19,155	17,391	-9.2%
Tax	Rs m	5,114	3,418	-33.2%
Profit after tax	Rs m	14,041	13,973	-0.5%
Gross profit margin	%	30.0	24.9
Effective tax rate	%	26.7	19.7
Net profit margin	%	11.2	9.8

Download Now: 7 Unstoppable Growth Engines of India's $10 Trillion Bull Run...

CESC Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 94 billion as compared to Rs 88 billion in FY22, thereby witnessing an increase of 6.2%.
• Long-term debt down at Rs 96 billion as compared to Rs 106 billion during FY22, a fall of 9.5%.
• Current assets rose 5% and stood at Rs 141 billion, while fixed assets fell 2% and stood at Rs 236 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 377 billion as against Rs 375 billion during FY22, thereby witnessing a growth of 1%.

CESC Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	103,964	109,104	4.9
Current Liabilities	Rs m	88,345	93,842	6.2
Long-term Debt	Rs m	105,770	95,689	-9.5
Total Liabilities	Rs m	374,935	377,119	0.6
Current assets	Rs m	134,756	141,468	5.0
Fixed Assets	Rs m	240,178	235,651	-1.9
Total Assets	Rs m	374,935	377,119	0.6

CESC Cash Flow Statement Analysis

• CESC's cash flow from operating activities (CFO) during FY23 stood at Rs 20 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -5 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -25 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -10 billion from the Rs 13 billion net cash flows seen during FY22.

CESC 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	24,991	19,784	-20.8%
Cash Flow from Investing Activities	Rs m	-5,750	-5,447	-
Cash Flow from Financing Activities	Rs m	-6,109	-24,572	-
Net Cash Flow	Rs m	13,131	-10,235	-

Current Valuations for CESC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 10.5, an decline from the EPS of Rs 10.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 74.9, stands at 7.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.9 times, while the price to sales ratio stands at 0.7 times.
• The company's price to cash flow (P/CF) ratio stood at 4.4 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	94.6	107.5
TTM Earnings per share	Rs	10.6	10.5
Diluted earnings per share	Rs	10.6	10.5
Price to Cash Flow	x	4.4	4.4
TTM P/E ratio	x	7.2	7.1
Price / Book Value ratio	x	6.2	0.9
Market Cap	Rs m	644,360	99,583
Dividends per share (Unadj.)	Rs	4.5	4.5

Ratio Analysis for CESC

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.5x during FY23, from 1.5x 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 2.4x during FY23, from 2.5x 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 12.8% during FY23, from 13.5% 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 declined and down at 14.6% during FY23, from 15.1% 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 7.0% during FY23, from 7.1% 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	1.5	1.5
Debtors’ Days	Days	6	6
Interest coverage	x	2.5	2.4
Debt to equity ratio	x	1.0	0.9
Return on assets	%	7.1	7.0
Return on equity	%	13.5	12.8
Return on capital employed	%	15.1	14.6

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

CESC Share Price Performance

Over the last one year, CESC share price has moved down from Rs 75.0 to Rs 74.9, registering a loss of Rs 0.1 or around 0.1%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 4,020.3 (down 0.0%). Over the last one year it has moved down from 4,501.5 to 4,020.3, a loss of 481 points (down 10.7%).

Overall, the S&P BSE SENSEX is up 20.4% over the year.

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