DAVANGERE SUGAR 2022-23 Annual Report Analysis

Thu, 7 Sep

DAVANGERE SUGAR 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.

DAVANGERE SUGAR Income Statement Analysis

• Operating income during the year rose 125.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 62.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 19.9% in FY23 as against 27.7% in FY22.
• Depreciation charges increased by 30.4% and finance costs increased by 42.1% YoY, respectively.
• Other income grew by 174.4% YoY.
• Net profit for the year grew by 132.7% YoY.
• Net profit margins during the year grew from 4.6% in FY22 to 4.7% in FY23.

DAVANGERE SUGAR Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	1,242	2,799	125.3%
Other income	Rs m	2	6	174.4%
Total Revenues	Rs m	1,245	2,806	125.4%
Gross profit	Rs m	344	557	62.0%
Depreciation	Rs m	89	116	30.4%
Interest	Rs m	191	271	42.1%
Profit before tax	Rs m	67	177	165.2%
Tax	Rs m	10	45	352.8%
Profit after tax	Rs m	57	132	132.7%
Gross profit margin	%	27.7	19.9
Effective tax rate	%	14.8	25.3
Net profit margin	%	4.6	4.7

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DAVANGERE SUGAR Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 2 billion as compared to Rs 2 billion in FY22, thereby witnessing an increase of 10.7%.
• Long-term debt down at Rs 949 million as compared to Rs 1 billion during FY22, a fall of 14.9%.
• Current assets rose 9% and stood at Rs 2 billion, while fixed assets rose 1% and stood at Rs 4 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 6 billion as against Rs 6 billion during FY22, thereby witnessing a growth of 4%.

DAVANGERE SUGAR Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	2,513	3,120	24.2
Current Liabilities	Rs m	1,567	1,735	10.7
Long-term Debt	Rs m	1,115	949	-14.9
Total Liabilities	Rs m	5,737	5,967	4.0
Current assets	Rs m	2,195	2,389	8.8
Fixed Assets	Rs m	3,541	3,578	1.0
Total Assets	Rs m	5,737	5,967	4.0

DAVANGERE SUGAR Cash Flow Statement Analysis

• DAVANGERE SUGAR's cash flow from operating activities (CFO) during FY23 stood at Rs 807 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -201 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -652 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -47 million from the Rs -90 million net cash flows seen during FY22.

DAVANGERE SUGAR 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	-681	807	-
Cash Flow from Investing Activities	Rs m	-854	-201	-
Cash Flow from Financing Activities	Rs m	1,444	-652	-
Net Cash Flow	Rs m	-90	-47	-

Current Valuations for DAVANGERE SUGAR

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 1.4, an improvement from the EPS of Rs 1.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 110.7, stands at 77.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.3 times, while the price to sales ratio stands at 3.7 times.
• The company's price to cash flow (P/CF) ratio stood at 19.9 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	22.3	29.8
TTM Earnings per share	Rs	1.0	1.4
Diluted earnings per share	Rs	0.6	1.4
Price to Cash Flow	x	9.3	19.9
TTM P/E ratio	x	26.0	77.1
Price / Book Value ratio	x	0.3	1.6
Market Cap	Rs m	785	4,935
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for DAVANGERE SUGAR

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.4x during FY23, from 1.4x 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 1.7x during FY23, from 1.3x 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 4.2% during FY23, from 2.3% 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 11.0% during FY23, from 7.1% 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 improved and stood at 6.8% during FY23, from 4.3% 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	1.4	1.4
Debtors’ Days	Days	1,047	278
Interest coverage	x	1.3	1.7
Debt to equity ratio	x	0.4	0.3
Return on assets	%	4.3	6.8
Return on equity	%	2.3	4.2
Return on capital employed	%	7.1	11.0

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

DAVANGERE SUGAR Share Price Performance

Over the last one year, DAVANGERE SUGAR share price has moved up from Rs 39.3 to Rs 110.7, registering a gain of Rs 71.4 or around 181.7%.

Overall, the S&P BSE SENSEX is up 11.2% over the year.

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