DCM 2022-23 Annual Report Analysis

Wed, 8 Nov

DCM 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 Income Statement Analysis

• Operating income during the year fell 0.5% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 71.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 3.3% in FY23 as against 11.6% in FY22.
• Depreciation charges decreased by 14.0% and finance costs decreased by 62.9% YoY, respectively.
• Other income declined by 69.1% YoY.
• Net profit for the year declined by 92.3% YoY.
• Net profit margins during the year declined from 43.2% in FY22 to 3.4% in FY23.

DCM Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	698	694	-0.5%
Other income	Rs m	381	118	-69.1%
Total Revenues	Rs m	1,078	812	-24.7%
Gross profit	Rs m	81	23	-71.5%
Depreciation	Rs m	81	70	-14.0%
Interest	Rs m	59	22	-62.9%
Profit before tax	Rs m	321	49	-84.8%
Tax	Rs m	20	26	29.2%
Profit after tax	Rs m	302	23	-92.3%
Gross profit margin	%	11.6	3.3
Effective tax rate	%	6.2	52.3
Net profit margin	%	43.2	3.4

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DCM Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 641 million as compared to Rs 719 million in FY22, thereby witnessing an decrease of -10.9%.
• Current assets fell 6% and stood at Rs 456 million, while fixed assets rose 0% and stood at Rs 679 million in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 1 billion as against Rs 1 billion during FY22, thereby witnessing a fall of 2%.

DCM Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	119	150	25.3
Current Liabilities	Rs m	719	641	-10.9
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	1,163	1,134	-2.5
Current assets	Rs m	485	456	-6.1
Fixed Assets	Rs m	678	679	0.1
Total Assets	Rs m	1,163	1,134	-2.5

DCM Cash Flow Statement Analysis

• DCM's cash flow from operating activities (CFO) during FY23 stood at Rs 178 million, an improvement of 53.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -29 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -151 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -3 million from the Rs 40 million net cash flows seen during FY22.

DCM 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	116	178	53.1%
Cash Flow from Investing Activities	Rs m	7	-29	-
Cash Flow from Financing Activities	Rs m	-84	-151	-
Net Cash Flow	Rs m	40	-3	-

Current Valuations for DCM

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 1.2, an decline from the EPS of Rs 16.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 77.4, stands at 82.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 9.7 times, while the price to sales ratio stands at 2.1 times.
• The company's price to cash flow (P/CF) ratio stood at 15.5 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	37.4	37.2
TTM Earnings per share	Rs	16.1	1.2
Diluted earnings per share	Rs	16.2	1.2
Price to Cash Flow	x	4.0	15.5
TTM P/E ratio	x	6.2	82.6
Price / Book Value ratio	x	13.1	9.6
Market Cap	Rs m	1,569	1,442
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for DCM

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.7x during FY23, from 0.7x 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 3.2x during FY23, from 6.4x 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 15.6% during FY23, from 252.7% 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 47.4% during FY23, from 318.7% 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 4.0% during FY23, from 31.0% 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	0.7	0.7
Debtors’ Days	Days	804	631
Interest coverage	x	6.4	3.2
Debt to equity ratio	x	0.0	0.0
Return on assets	%	31.0	4.0
Return on equity	%	252.7	15.6
Return on capital employed	%	318.7	47.4

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

DCM Share Price Performance

Over the last one year, DCM share price has moved down from Rs 78.2 to Rs 77.4, registering a loss of Rs 0.7 or around 0.9%.

Overall, the S&P BSE SENSEX is up 6.1% over the year.

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