EIH 2022-23 Annual Report Analysis

Mon, 24 Jul

EIH 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.

EIH Income Statement Analysis

• Operating income during the year rose 104.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 2930.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 27.1% in FY23 as against 1.8% in FY22.
• Depreciation charges increased by 1.5% and finance costs increased by 1.9% YoY, respectively.
• Other income grew by 32.0% YoY.
• Net profit for the year declined by NA YoY.
• Net profit margins during the year grew from 8.5% in FY22 to 16.8% in FY23.

EIH Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	9,853	20,188	104.9%
Other income	Rs m	588	776	32.0%
Total Revenues	Rs m	10,441	20,964	100.8%
Gross profit	Rs m	181	5,480	2,930.2%
Depreciation	Rs m	1,243	1,262	1.5%
Interest	Rs m	349	356	1.9%
Profit before tax	Rs m	-823	4,639	NA
Tax	Rs m	17	1,247	7,068.6%
Profit after tax	Rs m	-840	3,392	NA
Gross profit margin	%	1.8	27.1
Effective tax rate	%	-2.1	26.9
Net profit margin	%	-8.5	16.8

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EIH Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 5 billion as compared to Rs 6 billion in FY22, thereby witnessing an decrease of -18.4%.
• Long-term debt down at Rs 360 million as compared to Rs 2 billion during FY22, a fall of 78.2%.
• Current assets rose 45% and stood at Rs 9 billion, while fixed assets rose 1% and stood at Rs 35 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 44 billion as against Rs 42 billion during FY22, thereby witnessing a growth of 5%.

EIH Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	30,267	33,746	11.5
Current Liabilities	Rs m	6,227	5,078	-18.4
Long-term Debt	Rs m	1,652	360	-78.2
Total Liabilities	Rs m	41,749	44,043	5.5
Current assets	Rs m	6,028	8,764	45.4
Fixed Assets	Rs m	35,051	35,279	0.7
Total Assets	Rs m	41,749	44,043	5.5

EIH Cash Flow Statement Analysis

• EIH's cash flow from operating activities (CFO) during FY23 stood at Rs 6 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -3 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -3 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 156 million from the Rs 251 million net cash flows seen during FY22.

EIH 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	-187	6,143	-
Cash Flow from Investing Activities	Rs m	235	-2,980	-
Cash Flow from Financing Activities	Rs m	203	-2,988	-
Net Cash Flow	Rs m	251	156	-38.0%

Current Valuations for EIH

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 5.4, an improvement from the EPS of Rs -1.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 218.7, stands at 42.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.1 times, while the price to sales ratio stands at 6.8 times.
• The company's price to cash flow (P/CF) ratio stood at 21.9 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	15.8	32.3
TTM Earnings per share	Rs	-1.3	5.4
Diluted earnings per share	Rs	-1.3	5.4
Price to Cash Flow	x	239.7	21.9
TTM P/E ratio	x	-199.9	42.8
Price / Book Value ratio	x	2.5	3.0
Market Cap	Rs m	76,294	101,919
Dividends per share (Unadj.)	Rs	0.0	1.1

Ratio Analysis for EIH

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.7x during FY23, from 1.0x 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 14.0x during FY23, from -1.4x 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 improved and stood at 10.1% during FY23, from -2.8% 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 14.6% during FY23, from -1.5% 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 8.5% during FY23, from -1.2% 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	1.0	1.7
Debtors’ Days	Days	43	41
Interest coverage	x	-1.4	14.0
Debt to equity ratio	x	0.1	0.0
Return on assets	%	-1.2	8.5
Return on equity	%	-2.8	10.1
Return on capital employed	%	-1.5	14.6

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

EIH Share Price Performance

Over the last one year, EIH share price has moved up from Rs 140.3 to Rs 218.7, registering a gain of Rs 78.4 or around 55.9%.

Overall, the S&P BSE SENSEX is up 19.8% over the year.

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