DEEP ENERGY RESOURCES 2022-23 Annual Report Analysis

Mon, 12 Feb

DEEP ENERGY RESOURCES 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.

DEEP ENERGY RESOURCES Income Statement Analysis

• Operating income during the year rose 1160.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 314.9% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 10.2% in FY23 as against 30.9% in FY22.
• Depreciation charges increased by 2.3% and finance costs increased by 45.1% YoY, respectively.
• Other income grew by 39.3% YoY.
• Net profit for the year grew by 369.0% YoY.
• Net profit margins during the year declined from 17.4% in FY22 to 6.5% in FY23.

DEEP ENERGY RESOURCES Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	27	335	1,160.0%
Other income	Rs m	2	3	39.3%
Total Revenues	Rs m	29	338	1,075.0%
Gross profit	Rs m	8	34	314.9%
Depreciation	Rs m	3	3	2.3%
Interest	Rs m	2	3	45.1%
Profit before tax	Rs m	5	31	477.6%
Tax	Rs m	1	10	1,119.2%
Profit after tax	Rs m	5	22	369.0%
Gross profit margin	%	30.9	10.2
Effective tax rate	%	14.5	30.5
Net profit margin	%	17.4	6.5

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DEEP ENERGY RESOURCES Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 1 billion as compared to Rs 1 billion in FY22, thereby witnessing an decrease of -1.6%.
• Long-term debt stood at Rs 340 million as compared to Rs 3 million during FY22, a growth of 12083.2%.
• Current assets rose 6% and stood at Rs 820 million, while fixed assets rose 3% and stood at Rs 5 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 3%.

DEEP ENERGY RESOURCES Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	4,135	3,995	-3.4
Current Liabilities	Rs m	1,330	1,309	-1.6
Long-term Debt	Rs m	3	340	12,083.2
Total Liabilities	Rs m	5,744	5,931	3.2
Current assets	Rs m	775	820	5.9
Fixed Assets	Rs m	4,970	5,110	2.8
Total Assets	Rs m	5,744	5,931	3.2

DEEP ENERGY RESOURCES Cash Flow Statement Analysis

• DEEP ENERGY RESOURCES's cash flow from operating activities (CFO) during FY23 stood at Rs 98 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -199 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 108 million, an improvement of 57% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 7 million from the Rs -30 million net cash flows seen during FY22.

DEEP ENERGY RESOURCES 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	362	98	-72.8%
Cash Flow from Investing Activities	Rs m	-460	-199	-
Cash Flow from Financing Activities	Rs m	68	108	57.4%
Net Cash Flow	Rs m	-30	7	-

Current Valuations for DEEP ENERGY RESOURCES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.7, an improvement from the EPS of Rs 0.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 106.7, stands at 157.7 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 10.2 times.
• The company's price to cash flow (P/CF) ratio stood at 133.2 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	0.8	10.5
TTM Earnings per share	Rs	0.1	0.7
Diluted earnings per share	Rs	0.1	0.7
Price to Cash Flow	x	217.6	133.2
TTM P/E ratio	x	360.0	157.7
Price / Book Value ratio	x	0.4	0.8
Market Cap	Rs m	1,494	3,298
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for DEEP ENERGY RESOURCES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.6x during FY23, from 0.6x 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 12.0x during FY23, from 3.8x 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 0.5% during FY23, from 0.1% 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 0.8% during FY23, from 0.2% 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 improved and stood at 0.4% during FY23, from 0.1% 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	0.6	0.6
Debtors’ Days	Days	1,149	43
Interest coverage	x	3.8	12.0
Debt to equity ratio	x	0.0	0.1
Return on assets	%	0.1	0.4
Return on equity	%	0.1	0.5
Return on capital employed	%	0.2	0.8

To see how DEEP ENERGY RESOURCES has performed over the last 5 years, please visit here.

DEEP ENERGY RESOURCES Share Price Performance

Over the last one year, DEEP ENERGY RESOURCES share price has moved up from Rs 52.2 to Rs 106.7, registering a gain of Rs 54.5 or around 104.3%.

Overall, the S&P BSE SENSEX is up 1.8% over the year.

(To know more, check out historical annual results for DEEP ENERGY RESOURCES and quarterly results for DEEP ENERGY RESOURCES)