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HINDUSTAN AERO. 2022-23 Annual Report Analysis

Sun, 6 Aug

HINDUSTAN AERO. 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.

HINDUSTAN AERO. Income Statement Analysis

• Operating income during the year rose 9.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 23.5% YoY during the fiscal. Operating profit margins witnessed a fall and down at 24.8% in FY23 as against 22.0% in FY22.
• Depreciation charges increased by 60.7% and finance costs decreased by 1.3% YoY, respectively.
• Other income grew by 69.6% YoY.
• Net profit for the year grew by 14.7% YoY.
• Net profit margins during the year grew from 20.6% in FY22 to 21.6% in FY23.

HINDUSTAN AERO. Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	246,200	269,275	9.4%
Other income	Rs m	9,849	16,701	69.6%
Total Revenues	Rs m	256,050	285,976	11.7%
Gross profit	Rs m	54,154	66,885	23.5%
Depreciation	Rs m	11,105	17,847	60.7%
Interest	Rs m	652	644	-1.3%
Profit before tax	Rs m	52,245	65,095	24.6%
Tax	Rs m	1,447	6,818	371.3%
Profit after tax	Rs m	50,799	58,277	14.7%
Gross profit margin	%	22.0	24.8
Effective tax rate	%	2.8	10.5
Net profit margin	%	20.6	21.6

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HINDUSTAN AERO. Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 308 billion as compared to Rs 250 billion in FY22, thereby witnessing an increase of 23.2%.
• Current assets rose 15% and stood at Rs 519 billion, while fixed assets rose 11% and stood at Rs 142 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 661 billion as against Rs 578 billion during FY22, thereby witnessing a growth of 14%.

HINDUSTAN AERO. Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	193,131	235,722	22.1
Current Liabilities	Rs m	250,225	308,273	23.2
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	578,264	660,781	14.3
Current assets	Rs m	449,849	518,769	15.3
Fixed Assets	Rs m	128,334	141,931	10.6
Total Assets	Rs m	578,264	660,781	14.3

HINDUSTAN AERO. Cash Flow Statement Analysis

• HINDUSTAN AERO.'s cash flow from operating activities (CFO) during FY23 stood at Rs 88 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -57 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -17 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 14 billion from the Rs -41 billion net cash flows seen during FY22.

HINDUSTAN AERO. 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	101,731	88,297	-13.2%
Cash Flow from Investing Activities	Rs m	-127,852	-57,280	-
Cash Flow from Financing Activities	Rs m	-14,637	-17,313	-
Net Cash Flow	Rs m	-40,758	13,704	-

Current Valuations for HINDUSTAN AERO.

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 174.3, an improvement from the EPS of Rs 151.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 3,749.9, stands at 21.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.3 times, while the price to sales ratio stands at 4.7 times.
• The company's price to cash flow (P/CF) ratio stood at 9.6 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	736.3	805.3
TTM Earnings per share	Rs	151.9	174.3
Diluted earnings per share	Rs	151.9	174.3
Price to Cash Flow	x	8.0	9.6
TTM P/E ratio	x	9.8	21.5
Price / Book Value ratio	x	2.2	3.1
Market Cap	Rs m	416,889	732,810
Dividends per share (Unadj.)	Rs	50.0	55.0

Ratio Analysis for HINDUSTAN AERO.

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.7x during FY23, from 1.8x 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 102.1x during FY23, from 81.1x 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 declined and down at 24.7% during FY23, from 26.3% 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 improved and stood at 27.9% during FY23, from 27.4% 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 8.9% during FY23, from 8.9% 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	1.8	1.7
Debtors’ Days	Days	688	640
Interest coverage	x	81.1	102.1
Debt to equity ratio	x	0.0	0.0
Return on assets	%	8.9	8.9
Return on equity	%	26.3	24.7
Return on capital employed	%	27.4	27.9

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

HINDUSTAN AERO. Share Price Performance

Over the last one year, HINDUSTAN AERO. share price has moved up from Rs 1,997.6 to Rs 3,749.9, registering a gain of Rs 1,752.4 or around 87.7%.

Overall, the S&P BSE SENSEX is up 12.6% over the year.

(To know more, check out historical annual results for HINDUSTAN AERO. and quarterly results for HINDUSTAN AERO.)