ENGINEERS INDIA 2022-23 Annual Report Analysis

Thu, 31 Aug

ENGINEERS INDIA 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.

ENGINEERS INDIA 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 30.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 8.1% in FY23 as against 13.3% in FY22.
• Depreciation charges increased by 8.8% and finance costs increased by 9.3% YoY, respectively.
• Other income grew by 130.6% YoY.
• Net profit for the year grew by 0.4% YoY.
• Net profit margins during the year declined from 11.8% in FY22 to 10.3% in FY23.

ENGINEERS INDIA Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	29,120	33,282	14.3%
Other income	Rs m	883	2,036	130.6%
Total Revenues	Rs m	30,003	35,319	17.7%
Gross profit	Rs m	3,875	2,706	-30.2%
Depreciation	Rs m	236	257	8.8%
Interest	Rs m	28	30	9.3%
Profit before tax	Rs m	4,495	4,455	-0.9%
Tax	Rs m	1,066	1,013	-5.0%
Profit after tax	Rs m	3,429	3,442	0.4%
Gross profit margin	%	13.3	8.1
Effective tax rate	%	23.7	22.7
Net profit margin	%	11.8	10.3

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ENGINEERS INDIA Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 24 billion as compared to Rs 24 billion in FY22, thereby witnessing an increase of 0.2%.
• Current assets rose 3% and stood at Rs 25 billion, while fixed assets fell 7% and stood at Rs 18 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 43 billion as against Rs 44 billion during FY22, thereby witnessing a fall of 1%.

ENGINEERS INDIA Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	17,700	19,615	10.8
Current Liabilities	Rs m	23,963	24,021	0.2
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	43,500	42,922	-1.3
Current assets	Rs m	24,339	25,046	2.9
Fixed Assets	Rs m	19,162	17,876	-6.7
Total Assets	Rs m	43,500	42,922	-1.3

ENGINEERS INDIA Cash Flow Statement Analysis

• ENGINEERS INDIA's cash flow from operating activities (CFO) during FY23 stood at Rs -1 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs 3 billion, an improvement of 425.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -2 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 337 million from the Rs -392 million net cash flows seen during FY22.

ENGINEERS INDIA 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	483	-1,127	-
Cash Flow from Investing Activities	Rs m	613	3,221	425.7%
Cash Flow from Financing Activities	Rs m	-1,488	-1,757	-
Net Cash Flow	Rs m	-392	337	-

Current Valuations for ENGINEERS INDIA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 6.1, an improvement from the EPS of Rs 6.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 155.9, stands at 21.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.5 times, while the price to sales ratio stands at 2.6 times.
• The company's price to cash flow (P/CF) ratio stood at 11.1 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	51.8	59.2
TTM Earnings per share	Rs	6.1	6.1
Diluted earnings per share	Rs	6.1	6.1
Price to Cash Flow	x	9.8	11.1
TTM P/E ratio	x	10.5	21.4
Price / Book Value ratio	x	2.3	2.1
Market Cap	Rs m	41,451	41,226
Dividends per share (Unadj.)	Rs	3.0	3.0

Ratio Analysis for ENGINEERS INDIA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.0x 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 deteriorated and stood at 149.1x during FY23, from 164.4x 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 17.5% 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 22.9% during FY23, from 25.5% 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 8.1% during FY23, from 7.9% 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	1.0
Debtors’ Days	Days	484	403
Interest coverage	x	164.4	149.1
Debt to equity ratio	x	0.0	0.0
Return on assets	%	7.9	8.1
Return on equity	%	19.4	17.5
Return on capital employed	%	25.5	22.9

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

ENGINEERS INDIA Share Price Performance

Over the last one year, ENGINEERS INDIA share price has moved up from Rs 67.9 to Rs 155.9, registering a gain of Rs 88.0 or around 129.6%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 45,016.4 (up 0.2%). Over the last one year it has moved up from 32,224.8 to 45,016.4, a gain of 12,792 points (up 39.7%).

Overall, the S&P BSE SENSEX is up 12.3% over the year.

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