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GREAVES COTTON 2022-23 Annual Report Analysis

Mon, 24 Jul

GREAVES COTTON 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.

GREAVES COTTON Income Statement Analysis

• Operating income during the year rose 57.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 531.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 4.2% in FY23 as against 1.1% in FY22.
• Depreciation charges decreased by 3.5% and finance costs increased by 118.9% YoY, respectively.
• Other income grew by 151.9% YoY.
• Net profit for the year declined by NA YoY.
• Net profit margins during the year grew from 2.1% in FY22 to 2.6% in FY23.

GREAVES COTTON Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	17,097	26,995	57.9%
Other income	Rs m	267	672	151.9%
Total Revenues	Rs m	17,364	27,667	59.3%
Gross profit	Rs m	181	1,140	531.0%
Depreciation	Rs m	587	567	-3.5%
Interest	Rs m	53	117	118.9%
Profit before tax	Rs m	-193	1,128	NA
Tax	Rs m	160	431	169.6%
Profit after tax	Rs m	-353	698	NA
Gross profit margin	%	1.1	4.2
Effective tax rate	%	-82.6	38.2
Net profit margin	%	-2.1	2.6

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GREAVES COTTON Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 7 billion as compared to Rs 7 billion in FY22, thereby witnessing an increase of 4.8%.
• Current assets rose 124% and stood at Rs 16 billion, while fixed assets rose 21% and stood at Rs 11 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 27 billion as against Rs 16 billion during FY22, thereby witnessing a growth of 67%.

GREAVES COTTON Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	7,442	15,728	111.3
Current Liabilities	Rs m	6,801	7,130	4.8
Long-term Debt	Rs m	1,690	0	-100.0
Total Liabilities	Rs m	16,241	27,047	66.5
Current assets	Rs m	7,262	16,234	123.6
Fixed Assets	Rs m	8,856	10,682	20.6
Total Assets	Rs m	16,241	27,047	66.5

GREAVES COTTON Cash Flow Statement Analysis

• GREAVES COTTON's cash flow from operating activities (CFO) during FY23 stood at Rs -1 billion, an improvement of 140.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -8 billion, an improvement of 218.2% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 9 billion, an improvement of 323% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -43 million from the Rs -844 million net cash flows seen during FY22.

GREAVES COTTON 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	-563	-1,352	-
Cash Flow from Investing Activities	Rs m	-2,381	-7,577	-
Cash Flow from Financing Activities	Rs m	2,100	8,886	323.1%
Net Cash Flow	Rs m	-844	-43	-

Current Valuations for GREAVES COTTON

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 3.0, an improvement from the EPS of Rs -1.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 136.2, stands at 41.3 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 1.2 times.
• The company's price to cash flow (P/CF) ratio stood at 30.2 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	73.8	116.5
TTM Earnings per share	Rs	-1.5	3.0
Diluted earnings per share	Rs	-1.5	3.0
Price to Cash Flow	x	189.0	30.2
TTM P/E ratio	x	-135.0	41.3
Price / Book Value ratio	x	5.9	2.4
Market Cap	Rs m	43,839	38,158
Dividends per share (Unadj.)	Rs	0.2	0.9

Ratio Analysis for GREAVES COTTON

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.3x during FY23, from 1.1x 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 10.7x during FY23, from -2.6x 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 improved and stood at 4.4% during FY23, from -4.7% 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 7.9% during FY23, from -1.5% 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 improved and stood at 3.0% during FY23, from -1.8% 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	1.1	2.3
Debtors’ Days	Days	4	2
Interest coverage	x	-2.6	10.7
Debt to equity ratio	x	0.2	0.0
Return on assets	%	-1.8	3.0
Return on equity	%	-4.7	4.4
Return on capital employed	%	-1.5	7.9

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

GREAVES COTTON Share Price Performance

Over the last one year, GREAVES COTTON share price has moved down from Rs 164.0 to Rs 136.2, registering a loss of Rs 27.8 or around 17.0%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 42,734.2 (up 0.8%). Over the last one year it has moved up from 29,009.4 to 42,734.2, a gain of 13,725 points (up 47.3%).

Overall, the S&P BSE SENSEX is up 19.8% over the year.

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