ESTER INDUSTRIES 2022-23 Annual Report Analysis

Wed, 25 Oct

ESTER INDUSTRIES 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.

ESTER INDUSTRIES Income Statement Analysis

• Operating income during the year rose 0.4% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 46.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 8.2% in FY23 as against 15.4% in FY22.
• Depreciation charges increased by 19.3% and finance costs increased by 46.1% YoY, respectively.
• Other income grew by 41.0% YoY.
• Net profit for the year declined by 86.4% YoY.
• Net profit margins during the year declined from 7.7% in FY22 to 1.0% in FY23.

ESTER INDUSTRIES Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	11,103	11,141	0.4%
Other income	Rs m	88	124	41.0%
Total Revenues	Rs m	11,191	11,266	0.7%
Gross profit	Rs m	1,709	918	-46.3%
Depreciation	Rs m	368	439	19.3%
Interest	Rs m	249	363	46.1%
Profit before tax	Rs m	1,180	239	-79.7%
Tax	Rs m	323	122	-62.1%
Profit after tax	Rs m	857	117	-86.4%
Gross profit margin	%	15.4	8.2
Effective tax rate	%	27.4	51.2
Net profit margin	%	7.7	1.0

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ESTER INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 4 billion as compared to Rs 3 billion in FY22, thereby witnessing an increase of 48.4%.
• Long-term debt stood at Rs 5 billion as compared to Rs 5 billion during FY22, a growth of 13.6%.
• Current assets rose 23% and stood at Rs 7 billion, while fixed assets rose 18% and stood at Rs 13 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 20 billion as against Rs 16 billion during FY22, thereby witnessing a growth of 20%.

ESTER INDUSTRIES Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	6,211	7,423	19.5
Current Liabilities	Rs m	2,759	4,096	48.4
Long-term Debt	Rs m	4,739	5,381	13.6
Total Liabilities	Rs m	16,421	19,673	19.8
Current assets	Rs m	5,335	6,574	23.2
Fixed Assets	Rs m	11,086	13,099	18.2
Total Assets	Rs m	16,421	19,673	19.8

ESTER INDUSTRIES Cash Flow Statement Analysis

• ESTER INDUSTRIES's cash flow from operating activities (CFO) during FY23 stood at Rs 577 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -2 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 1 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -278 million from the Rs 543 million net cash flows seen during FY22.

ESTER INDUSTRIES 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	619	577	-6.7%
Cash Flow from Investing Activities	Rs m	-3,916	-1,993	-
Cash Flow from Financing Activities	Rs m	3,841	1,138	-70.4%
Net Cash Flow	Rs m	543	-278	-

Current Valuations for ESTER INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 1.4, an decline from the EPS of Rs 10.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 89.6, stands at -16.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.0 times, while the price to sales ratio stands at 0.7 times.
• The company's price to cash flow (P/CF) ratio stood at 20.4 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	133.1	133.6
TTM Earnings per share	Rs	10.3	1.4
Diluted earnings per share	Rs	10.3	1.4
Price to Cash Flow	x	9.6	20.4
TTM P/E ratio	x	10.9	-16.8
Price / Book Value ratio	x	1.9	1.5
Market Cap	Rs m	11,567	11,354
Dividends per share (Unadj.)	Rs	3.3	0.5

Ratio Analysis for ESTER INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.6x during FY23, from 1.9x 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 1.7x during FY23, from 5.7x 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 1.6% during FY23, from 13.8% 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 declined and down at 4.7% during FY23, from 13.0% 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 2.4% during FY23, from 6.7% 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	1.9	1.6
Debtors’ Days	Days	636	496
Interest coverage	x	5.7	1.7
Debt to equity ratio	x	0.8	0.7
Return on assets	%	6.7	2.4
Return on equity	%	13.8	1.6
Return on capital employed	%	13.0	4.7

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

ESTER INDUSTRIES Share Price Performance

Over the last one year, ESTER INDUSTRIES share price has moved down from Rs 178.6 to Rs 89.6, registering a loss of Rs 89.1 or around 49.9%.

Overall, the S&P BSE SENSEX is up 8.2% over the year.

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