GHCL 2022-23 Annual Report Analysis

Sun, 11 Jun

GHCL 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.

GHCL Income Statement Analysis

• Operating income during the year rose 20.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 59.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 34.2% in FY23 as against 25.9% in FY22.
• Depreciation charges decreased by 19.3% and finance costs decreased by 39.2% YoY, respectively.
• Other income grew by 222.2% YoY.
• Net profit for the year grew by 86.5% YoY.
• Net profit margins during the year grew from 15.8% in FY22 to 24.5% in FY23.

GHCL Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	37,784	45,454	20.3%
Other income	Rs m	121	391	222.2%
Total Revenues	Rs m	37,905	45,845	20.9%
Gross profit	Rs m	9,790	15,568	59.0%
Depreciation	Rs m	1,168	942	-19.3%
Interest	Rs m	636	387	-39.2%
Profit before tax	Rs m	8,108	14,630	80.4%
Tax	Rs m	2,125	3,472	63.4%
Profit after tax	Rs m	5,983	11,158	86.5%
Gross profit margin	%	25.9	34.2
Effective tax rate	%	26.2	23.7
Net profit margin	%	15.8	24.5

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GHCL Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 7 billion as compared to Rs 14 billion in FY22, thereby witnessing an decrease of -52.5%.
• Long-term debt down at Rs 2 billion as compared to Rs 4 billion during FY22, a fall of 42.9%.
• Current assets rose 32% and stood at Rs 32 billion, while fixed assets fell 30% and stood at Rs 20 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 51 billion as against Rs 52 billion during FY22, thereby witnessing a fall of 2%.

GHCL Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	30,801	39,413	28.0
Current Liabilities	Rs m	14,162	6,733	-52.5
Long-term Debt	Rs m	4,246	2,426	-42.9
Total Liabilities	Rs m	52,215	51,334	-1.7
Current assets	Rs m	23,974	31,573	31.7
Fixed Assets	Rs m	28,241	19,761	-30.0
Total Assets	Rs m	52,215	51,334	-1.7

GHCL Cash Flow Statement Analysis

• GHCL's cash flow from operating activities (CFO) during FY23 stood at Rs 9 billion, an improvement of 33.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -4 billion, an improvement of 19.6% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -5 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -825 million from the Rs 2 billion net cash flows seen during FY22.

GHCL 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	6,434	8,562	33.1%
Cash Flow from Investing Activities	Rs m	-3,366	-4,026	-
Cash Flow from Financing Activities	Rs m	-981	-5,362	-
Net Cash Flow	Rs m	2,088	-825	-

Current Valuations for GHCL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 116.7, an improvement from the EPS of Rs 62.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 490.4, stands at 4.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.2 times, while the price to sales ratio stands at 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 4.6 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	396.3	475.5
TTM Earnings per share	Rs	62.7	116.7
Diluted earnings per share	Rs	62.6	116.7
Price to Cash Flow	x	7.3	4.6
TTM P/E ratio	x	9.5	4.1
Price / Book Value ratio	x	1.2	1.4
Market Cap	Rs m	37,821	56,104
Dividends per share (Unadj.)	Rs	15.0	17.5

Ratio Analysis for GHCL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 4.7x during FY23, from 1.7x 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 improved and stood at 38.8x during FY23, from 13.8x 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 28.3% 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 improved and stood at 35.9% during FY23, from 24.9% 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 22.5% during FY23, from 12.7% 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	1.7	4.7
Debtors’ Days	Days	2	2
Interest coverage	x	13.8	38.8
Debt to equity ratio	x	0.1	0.1
Return on assets	%	12.7	22.5
Return on equity	%	19.4	28.3
Return on capital employed	%	24.9	35.9

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

GHCL Share Price Performance

Over the last one year, GHCL share price has moved down from Rs 664.3 to Rs 490.4, registering a loss of Rs 173.9 or around 26.2%.

Overall, the S&P BSE SENSEX is up 14.1% over the year.

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