GODREJ INDUSTRIES 2022-23 Annual Report Analysis

Wed, 19 Jul

GODREJ 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.

GODREJ INDUSTRIES Income Statement Analysis

• Operating income during the year rose 18.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 53.1% YoY during the fiscal. Operating profit margins witnessed a fall and down at 11.4% in FY23 as against 8.8% in FY22.
• Depreciation charges increased by 11.3% and finance costs increased by 51.3% YoY, respectively.
• Other income grew by 9.4% YoY.
• Net profit for the year grew by 43.1% YoY.
• Net profit margins during the year grew from 7.0% in FY22 to 8.5% in FY23.

GODREJ INDUSTRIES Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	141,302	167,403	18.5%
Other income	Rs m	9,345	10,221	9.4%
Total Revenues	Rs m	150,647	177,624	17.9%
Gross profit	Rs m	12,446	19,057	53.1%
Depreciation	Rs m	2,736	3,045	11.3%
Interest	Rs m	6,231	9,427	51.3%
Profit before tax	Rs m	12,824	16,806	31.1%
Tax	Rs m	2,899	2,599	-10.3%
Profit after tax	Rs m	9,924	14,206	43.1%
Gross profit margin	%	8.8	11.4
Effective tax rate	%	22.6	15.5
Net profit margin	%	7.0	8.5

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GODREJ INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 221 billion as compared to Rs 151 billion in FY22, thereby witnessing an increase of 46.9%.
• Long-term debt stood at Rs 71 billion as compared to Rs 55 billion during FY22, a growth of 29.9%.
• Current assets rose 28% and stood at Rs 261 billion, while fixed assets rose 32% and stood at Rs 174 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 435 billion as against Rs 336 billion during FY22, thereby witnessing a growth of 29%.

GODREJ INDUSTRIES Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	71,181	79,741	12.0
Current Liabilities	Rs m	150,699	221,350	46.9
Long-term Debt	Rs m	54,530	70,839	29.9
Total Liabilities	Rs m	336,158	435,057	29.4
Current assets	Rs m	204,660	260,999	27.5
Fixed Assets	Rs m	131,498	174,058	32.4
Total Assets	Rs m	336,158	435,057	29.4

GODREJ INDUSTRIES Cash Flow Statement Analysis

• GODREJ INDUSTRIES's cash flow from operating activities (CFO) during FY23 stood at Rs -44 billion, an improvement of 151.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs 18 billion, an improvement of 4,051.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 35 billion, an improvement of 84% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 10 billion from the Rs 2 billion net cash flows seen during FY22.

GODREJ 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	-17,562	-44,094	-
Cash Flow from Investing Activities	Rs m	428	17,753	4,051.7%
Cash Flow from Financing Activities	Rs m	19,159	35,346	84.5%
Net Cash Flow	Rs m	2,060	9,766	374.0%

Current Valuations for GODREJ INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 42.2, an improvement from the EPS of Rs 29.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 482.0, stands at 15.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.0 times, while the price to sales ratio stands at 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 8.9 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	419.8	497.3
TTM Earnings per share	Rs	29.5	42.2
Diluted earnings per share	Rs	29.5	42.2
Price to Cash Flow	x	12.3	8.9
TTM P/E ratio	x	22.0	15.8
Price / Book Value ratio	x	2.7	1.9
Market Cap	Rs m	189,219	152,867
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for GODREJ INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.2x during FY23, from 1.4x 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 2.8x during FY23, from 3.1x 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 17.8% during FY23, from 13.9% 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 17.4% during FY23, from 15.2% 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 5.4% during FY23, from 4.8% 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	1.4	1.2
Debtors’ Days	Days	4	3
Interest coverage	x	3.1	2.8
Debt to equity ratio	x	0.8	0.9
Return on assets	%	4.8	5.4
Return on equity	%	13.9	17.8
Return on capital employed	%	15.2	17.4

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

GODREJ INDUSTRIES Share Price Performance

Over the last one year, GODREJ INDUSTRIES share price has moved up from Rs 453.6 to Rs 482.0, registering a gain of Rs 28.4 or around 6.3%.

Overall, the S&P BSE SENSEX is up 22.6% over the year.

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