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CHEMCON SPECIALITY CHEMICALS 2022-23 Annual Report Analysis

Mon, 25 Sep

CHEMCON SPECIALITY 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.

CHEMCON SPECIALITY CHEMICALS Income Statement Analysis

• Operating income during the year rose 17.8% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 13.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 23.3% in FY23 as against 31.7% in FY22.
• Depreciation charges increased by 33.5% and finance costs increased by 161.7% YoY, respectively.
• Other income grew by 44.4% YoY.
• Net profit for the year declined by 12.2% YoY.
• Net profit margins during the year declined from 24.4% in FY22 to 18.2% in FY23.

CHEMCON SPECIALITY CHEMICALS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	2,571	3,029	17.8%
Other income	Rs m	92	133	44.4%
Total Revenues	Rs m	2,663	3,162	18.7%
Gross profit	Rs m	816	707	-13.4%
Depreciation	Rs m	63	84	33.5%
Interest	Rs m	6	15	161.7%
Profit before tax	Rs m	840	742	-11.7%
Tax	Rs m	212	190	-10.3%
Profit after tax	Rs m	628	551	-12.2%
Gross profit margin	%	31.7	23.3
Effective tax rate	%	25.3	25.7
Net profit margin	%	24.4	18.2

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CHEMCON SPECIALITY CHEMICALS Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 913 million as compared to Rs 776 million in FY22, thereby witnessing an increase of 17.7%.
• Long-term debt stood at Rs 7 million as compared to Rs 6 million during FY22, a growth of 21.6%.
• Current assets fell 17% and stood at Rs 3 billion, while fixed assets rose 98% and stood at Rs 2 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 6 billion as against Rs 5 billion during FY22, thereby witnessing a growth of 11%.

CHEMCON SPECIALITY CHEMICALS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	4,172	4,574	9.6
Current Liabilities	Rs m	776	913	17.7
Long-term Debt	Rs m	6	7	21.6
Total Liabilities	Rs m	4,980	5,534	11.1
Current assets	Rs m	3,757	3,114	-17.1
Fixed Assets	Rs m	1,223	2,420	97.9
Total Assets	Rs m	4,980	5,534	11.1

CHEMCON SPECIALITY CHEMICALS Cash Flow Statement Analysis

• CHEMCON SPECIALITY CHEMICALS's cash flow from operating activities (CFO) during FY23 stood at Rs 127 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -163 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 120 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 86 million from the Rs 115 million net cash flows seen during FY22.

CHEMCON SPECIALITY 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	741	127	-82.8%
Cash Flow from Investing Activities	Rs m	-925	-163	-
Cash Flow from Financing Activities	Rs m	298	120	-59.6%
Net Cash Flow	Rs m	115	86	-25.3%

Current Valuations for CHEMCON SPECIALITY CHEMICALS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 15.0, an decline from the EPS of Rs 17.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 283.0, stands at 29.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.3 times, while the price to sales ratio stands at 3.4 times.
• The company's price to cash flow (P/CF) ratio stood at 20.2 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	70.2	82.7
TTM Earnings per share	Rs	17.1	15.0
Diluted earnings per share	Rs	17.1	15.0
Price to Cash Flow	x	14.1	20.2
TTM P/E ratio	x	15.6	29.2
Price / Book Value ratio	x	3.6	2.8
Market Cap	Rs m	15,227	12,797
Dividends per share (Unadj.)	Rs	0.0	4.0

Ratio Analysis for CHEMCON SPECIALITY CHEMICALS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 3.4x during FY23, from 4.8x 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 50.8x during FY23, from 148.6x 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 declined and down at 12.0% during FY23, from 15.0% 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 declined and down at 16.5% during FY23, from 20.2% 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 10.2% during FY23, from 12.7% 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	4.8	3.4
Debtors’ Days	Days	1,455	815
Interest coverage	x	148.6	50.8
Debt to equity ratio	x	0.0	0.0
Return on assets	%	12.7	10.2
Return on equity	%	15.0	12.0
Return on capital employed	%	20.2	16.5

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

CHEMCON SPECIALITY CHEMICALS Share Price Performance

Over the last one year, CHEMCON SPECIALITY CHEMICALS share price has moved down from Rs 444.6 to Rs 283.0, registering a loss of Rs 161.6 or around 36.3%.

Overall, the S&P BSE SENSEX is up 11.0% over the year.

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