K&K RAIL ENG 2022-23 Annual Report Analysis

Tue, 17 Oct

K&K RAIL ENG 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.

K&K RAIL ENG Income Statement Analysis

• Operating income during the year rose 58.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 8.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 3.8% in FY23 as against 5.6% in FY22.
• Depreciation charges increased by 70.1% and finance costs increased by 48.6% YoY, respectively.
• Other income declined by 42.6% YoY.
• Net profit for the year declined by 13.7% YoY.
• Net profit margins during the year declined from 3.1% in FY22 to 1.7% in FY23.

K&K RAIL ENG Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	1,947	3,078	58.1%
Other income	Rs m	7	4	-42.6%
Total Revenues	Rs m	1,953	3,082	57.8%
Gross profit	Rs m	109	118	8.4%
Depreciation	Rs m	18	31	70.1%
Interest	Rs m	11	17	48.6%
Profit before tax	Rs m	86	74	-13.9%
Tax	Rs m	25	22	-14.2%
Profit after tax	Rs m	61	52	-13.7%
Gross profit margin	%	5.6	3.8
Effective tax rate	%	29.4	29.3
Net profit margin	%	3.1	1.7

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K&K RAIL ENG Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 645 million as compared to Rs 374 million in FY22, thereby witnessing an increase of 72.7%.
• Long-term debt down at Rs 80 million as compared to Rs 92 million during FY22, a fall of 12.8%.
• Current assets rose 79% and stood at Rs 2 billion, while fixed assets rose 10% and stood at Rs 184 million in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 2 billion as against Rs 1 billion during FY22, thereby witnessing a growth of 68%.

K&K RAIL ENG Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	545	598	9.7
Current Liabilities	Rs m	374	645	72.7
Long-term Debt	Rs m	92	80	-12.8
Total Liabilities	Rs m	1,013	1,697	67.5
Current assets	Rs m	846	1,513	78.8
Fixed Assets	Rs m	167	184	10.3
Total Assets	Rs m	1,013	1,697	67.5

K&K RAIL ENG Cash Flow Statement Analysis

• K&K RAIL ENG's cash flow from operating activities (CFO) during FY23 stood at Rs -32 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -48 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 395 million, an improvement of 470% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 315 million from the Rs -84 million net cash flows seen during FY22.

K&K RAIL ENG 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	-94	-32	-
Cash Flow from Investing Activities	Rs m	-59	-48	-
Cash Flow from Financing Activities	Rs m	69	395	470.2%
Net Cash Flow	Rs m	-84	315	-

Current Valuations for K&K RAIL ENG

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 3.3, an decline from the EPS of Rs 3.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 772.9, stands at 141.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 24.9 times, while the price to sales ratio stands at 4.0 times.
• The company's price to cash flow (P/CF) ratio stood at 43.8 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	123.4	195.0
TTM Earnings per share	Rs	3.8	3.3
Diluted earnings per share	Rs	3.1	2.7
Price to Cash Flow	x	4.8	43.8
TTM P/E ratio	x	25.1	141.7
Price / Book Value ratio	x	0.8	6.1
Market Cap	Rs m	441	3,644
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for K&K RAIL ENG

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.3x during FY23, from 2.3x 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 5.4x during FY23, from 8.6x 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 8.7% during FY23, from 11.1% 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 13.4% 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 declined and down at 4.1% during FY23, from 7.1% 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	2.3	2.3
Debtors’ Days	Days	737	896
Interest coverage	x	8.6	5.4
Debt to equity ratio	x	0.2	0.1
Return on assets	%	7.1	4.1
Return on equity	%	11.1	8.7
Return on capital employed	%	15.2	13.4

To see how K&K RAIL ENG has performed over the last 5 years, please visit here.

K&K RAIL ENG Share Price Performance

Over the last one year, K&K RAIL ENG share price has moved up from Rs 31.4 to Rs 772.9, registering a gain of Rs 741.6 or around 2365.4%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 48,057.9 (down 0.1%). Over the last one year it has moved up from 31,607.7 to 48,057.9, a gain of 16,450 points (up 52.0%).

Overall, the S&P BSE SENSEX is up 16.1% over the year.

(To know more, check out historical annual results for K&K RAIL ENG and quarterly results for K&K RAIL ENG)