DCM SHRIRAM 2022-23 Annual Report Analysis

Wed, 28 Jun

DCM SHRIRAM 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.

DCM SHRIRAM Income Statement Analysis

• Operating income during the year rose 14.3% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 14.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 14.2% in FY23 as against 19.0% in FY22.
• Depreciation charges increased by 7.6% and finance costs decreased by 38.3% YoY, respectively.
• Other income grew by 130.2% YoY.
• Net profit for the year declined by 9.8% YoY.
• Net profit margins during the year declined from 11.3% in FY22 to 8.9% in FY23.

DCM SHRIRAM Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	94,055	107,465	14.3%
Other income	Rs m	1,014	2,335	130.2%
Total Revenues	Rs m	95,069	109,799	15.5%
Gross profit	Rs m	17,869	15,296	-14.4%
Depreciation	Rs m	2,380	2,560	7.6%
Interest	Rs m	854	527	-38.3%
Profit before tax	Rs m	15,650	14,545	-7.1%
Tax	Rs m	4,989	4,930	-1.2%
Profit after tax	Rs m	10,661	9,615	-9.8%
Gross profit margin	%	19.0	14.2
Effective tax rate	%	31.9	33.9
Net profit margin	%	11.3	8.9

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DCM SHRIRAM Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 42 billion as compared to Rs 36 billion in FY22, thereby witnessing an increase of 14.5%.
• Long-term debt stood at Rs 12 billion as compared to Rs 10 billion during FY22, a growth of 21.3%.
• Current assets fell 4% and stood at Rs 62 billion, while fixed assets rose 48% and stood at Rs 62 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 124 billion as against Rs 106 billion during FY22, thereby witnessing a growth of 17%.

DCM SHRIRAM Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	55,018	62,685	13.9
Current Liabilities	Rs m	36,414	41,676	14.5
Long-term Debt	Rs m	9,513	11,537	21.3
Total Liabilities	Rs m	106,317	124,003	16.6
Current assets	Rs m	64,399	61,794	-4.0
Fixed Assets	Rs m	41,919	61,976	47.8
Total Assets	Rs m	106,317	124,003	16.6

DCM SHRIRAM Cash Flow Statement Analysis

• DCM SHRIRAM's cash flow from operating activities (CFO) during FY23 stood at Rs 13 billion, an improvement of 6.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -16 billion, an improvement of 72.4% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -2 billion, an improvement of 11% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -5 billion from the Rs 616 million net cash flows seen during FY22.

DCM SHRIRAM 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	12,244	13,064	6.7%
Cash Flow from Investing Activities	Rs m	-9,043	-15,589	-
Cash Flow from Financing Activities	Rs m	-2,585	-2,288	-
Net Cash Flow	Rs m	616	-4,814	-

Current Valuations for DCM SHRIRAM

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 61.7, an decline from the EPS of Rs 68.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 910.5, stands at 15.6 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 1.3 times.
• The company's price to cash flow (P/CF) ratio stood at 12.8 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	603.1	689.1
TTM Earnings per share	Rs	68.4	61.7
Diluted earnings per share	Rs	68.4	61.7
Price to Cash Flow	x	13.5	12.8
TTM P/E ratio	x	16.5	15.6
Price / Book Value ratio	x	2.5	2.5
Market Cap	Rs m	135,950	155,467
Dividends per share (Unadj.)	Rs	14.7	14.0

Ratio Analysis for DCM SHRIRAM

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.5x during FY23, from 1.8x 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 improved and stood at 28.6x during FY23, from 19.3x 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 declined and down at 15.3% during FY23, from 19.4% 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 20.3% during FY23, from 25.6% 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 8.2% during FY23, from 10.8% 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	1.8	1.5
Debtors’ Days	Days	4	3
Interest coverage	x	19.3	28.6
Debt to equity ratio	x	0.2	0.2
Return on assets	%	10.8	8.2
Return on equity	%	19.4	15.3
Return on capital employed	%	25.6	20.3

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

DCM SHRIRAM Share Price Performance

Over the last one year, DCM SHRIRAM share price has moved down from Rs 954.8 to Rs 910.5, registering a loss of Rs 44.4 or around 4.6%.

Overall, the S&P BSE SENSEX is up 19.3% over the year.

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