EKI ENERGY SERVICES 2022-23 Annual Report Analysis

Mon, 9 Oct

EKI ENERGY SERVICES 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.

EKI ENERGY SERVICES Income Statement Analysis

• Operating income during the year fell 28.5% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 68.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 12.6% in FY23 as against 28.6% in FY22.
• Depreciation charges increased by 312.9% and finance costs increased by 838.6% YoY, respectively.
• Other income grew by 885.6% YoY.
• Net profit for the year declined by 68.8% YoY.
• Net profit margins during the year declined from 21.3% in FY22 to 9.3% in FY23.

EKI ENERGY SERVICES Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	18,001	12,864	-28.5%
Other income	Rs m	13	129	885.6%
Total Revenues	Rs m	18,014	12,993	-27.9%
Gross profit	Rs m	5,157	1,624	-68.5%
Depreciation	Rs m	10	40	312.9%
Interest	Rs m	6	57	838.6%
Profit before tax	Rs m	5,154	1,656	-67.9%
Tax	Rs m	1,323	460	-65.3%
Profit after tax	Rs m	3,831	1,196	-68.8%
Gross profit margin	%	28.6	12.6
Effective tax rate	%	25.7	27.8
Net profit margin	%	21.3	9.3

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EKI ENERGY SERVICES Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 1 billion as compared to Rs 2 billion in FY22, thereby witnessing an decrease of -15.1%.
• Long-term debt stood at Rs 225 million as compared to Rs 0 million during FY22, a fall of 0.0%.
• Current assets rose 33% and stood at Rs 7 billion, while fixed assets rose 461% and stood at Rs 2 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 9 billion as against Rs 6 billion during FY22, thereby witnessing a growth of 58%.

EKI ENERGY SERVICES Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	4,091	5,144	25.7
Current Liabilities	Rs m	1,505	1,278	-15.1
Long-term Debt	Rs m	0	225	0.0
Total Liabilities	Rs m	5,618	8,883	58.1
Current assets	Rs m	5,289	7,042	33.1
Fixed Assets	Rs m	328	1,842	460.8
Total Assets	Rs m	5,618	8,883	58.1

EKI ENERGY SERVICES Cash Flow Statement Analysis

• EKI ENERGY SERVICES's cash flow from operating activities (CFO) during FY23 stood at Rs 1 billion, an improvement of 360.0% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -2 billion, an improvement of 224.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 528 million, an improvement of 249% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 262 million from the Rs -59 million net cash flows seen during FY22.

EKI ENERGY SERVICES 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	307	1,413	360.0%
Cash Flow from Investing Activities	Rs m	-517	-1,679	-
Cash Flow from Financing Activities	Rs m	151	528	249.3%
Net Cash Flow	Rs m	-59	262	-

Current Valuations for EKI ENERGY SERVICES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 43.5, an decline from the EPS of Rs 557.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 437.5, stands at 17.1 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 0.9 times.
• The company's price to cash flow (P/CF) ratio stood at 38.7 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	2,620.3	467.6
TTM Earnings per share	Rs	557.6	43.5
Diluted earnings per share	Rs	139.2	43.5
Price to Cash Flow	x	14.1	38.7
TTM P/E ratio	x	14.1	17.1
Price / Book Value ratio	x	2.7	9.3
Market Cap	Rs m	10,947	47,814
Dividends per share (Unadj.)	Rs	20.0	0.0

Ratio Analysis for EKI ENERGY SERVICES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 5.5x during FY23, from 3.5x 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 30.3x during FY23, from 855.7x 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 23.3% during FY23, from 93.6% 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 31.9% during FY23, from 126.1% 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 declined and down at 14.1% during FY23, from 68.3% 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	3.5	5.5
Debtors’ Days	Days	283	98
Interest coverage	x	855.7	30.3
Debt to equity ratio	x	0.0	0.0
Return on assets	%	68.3	14.1
Return on equity	%	93.6	23.3
Return on capital employed	%	126.1	31.9

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

EKI ENERGY SERVICES Share Price Performance

Over the last one year, EKI ENERGY SERVICES share price has moved down from Rs 1,525.3 to Rs 437.5, registering a loss of Rs 1,087.8 or around 71.3%.

Meanwhile, the S&P BSE IT Index is trading at Rs 32,584.2 (down 0.2%). Over the last one year it has moved up from 28,188.7 to 32,584.2, a gain of 4,396 points (up 15.6%).

Overall, the S&P BSE SENSEX is up 12.5% over the year.

(To know more, check out historical annual results for EKI ENERGY SERVICES and quarterly results for EKI ENERGY SERVICES)