FAIRCHEM ORGANICS 2022-23 Annual Report Analysis

Mon, 17 Jul

FAIRCHEM ORGANICS 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.

FAIRCHEM ORGANICS Income Statement Analysis

• Operating income during the year rose 0.8% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 31.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 11.2% in FY23 as against 16.3% in FY22.
• Depreciation charges increased by 14.3% and finance costs decreased by 8.7% YoY, respectively.
• Other income grew by 86.7% YoY.
• Net profit for the year declined by 35.9% YoY.
• Net profit margins during the year declined from 10.6% in FY22 to 6.7% in FY23.

FAIRCHEM ORGANICS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	6,432	6,480	0.8%
Other income	Rs m	4	7	86.7%
Total Revenues	Rs m	6,435	6,487	0.8%
Gross profit	Rs m	1,049	723	-31.0%
Depreciation	Rs m	71	82	14.3%
Interest	Rs m	69	63	-8.7%
Profit before tax	Rs m	912	586	-35.8%
Tax	Rs m	233	151	-35.3%
Profit after tax	Rs m	679	435	-35.9%
Gross profit margin	%	16.3	11.2
Effective tax rate	%	25.6	25.8
Net profit margin	%	10.6	6.7

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FAIRCHEM ORGANICS Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 668 million as compared to Rs 674 million in FY22, thereby witnessing an decrease of -0.9%.
• Current assets rose 8% and stood at Rs 1 billion, while fixed assets rose 4% and stood at Rs 2 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 3 billion as against Rs 3 billion during FY22, thereby witnessing a growth of 6%.

FAIRCHEM ORGANICS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	2,322	2,593	11.7
Current Liabilities	Rs m	674	668	-0.9
Long-term Debt	Rs m	100	0	-100.0
Total Liabilities	Rs m	3,241	3,424	5.7
Current assets	Rs m	1,372	1,486	8.3
Fixed Assets	Rs m	1,868	1,938	3.8
Total Assets	Rs m	3,241	3,424	5.7

FAIRCHEM ORGANICS Cash Flow Statement Analysis

• FAIRCHEM ORGANICS's cash flow from operating activities (CFO) during FY23 stood at Rs 496 million, an improvement of 22.6% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -145 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -351 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 0 million from the Rs 0 million net cash flows seen during FY22.

FAIRCHEM ORGANICS 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	405	496	22.6%
Cash Flow from Investing Activities	Rs m	-342	-145	-
Cash Flow from Financing Activities	Rs m	-63	-351	-
Net Cash Flow	Rs m	0	0	-

Current Valuations for FAIRCHEM ORGANICS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 33.4, an decline from the EPS of Rs 52.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,233.5, stands at 36.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.2 times, while the price to sales ratio stands at 2.5 times.
• The company's price to cash flow (P/CF) ratio stood at 42.3 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	494.0	497.7
TTM Earnings per share	Rs	52.2	33.4
Diluted earnings per share	Rs	52.2	33.4
Price to Cash Flow	x	26.1	42.3
TTM P/E ratio	x	28.9	36.9
Price / Book Value ratio	x	8.1	8.4
Market Cap	Rs m	18,880	21,835
Dividends per share (Unadj.)	Rs	13.0	7.5

Ratio Analysis for FAIRCHEM ORGANICS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.2x during FY23, from 2.0x 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 10.4x during FY23, from 14.3x 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 16.8% during FY23, from 29.3% 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 25.0% during FY23, from 40.5% 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 declined and down at 14.5% during FY23, from 23.1% 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	2.0	2.2
Debtors’ Days	Days	353	352
Interest coverage	x	14.3	10.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	23.1	14.5
Return on equity	%	29.3	16.8
Return on capital employed	%	40.5	25.0

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

FAIRCHEM ORGANICS Share Price Performance

Over the last one year, FAIRCHEM ORGANICS share price has moved down from Rs 1,469.6 to Rs 1,233.5, registering a loss of Rs 236.2 or around 16.1%.

Overall, the S&P BSE SENSEX is up 24.4% over the year.

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