HARSHA ENGINEERS 2022-23 Annual Report Analysis

Wed, 11 Oct

HARSHA ENGINEERS 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.

HARSHA ENGINEERS Income Statement Analysis

• Operating income during the year rose 3.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 10.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 13.6% in FY23 as against 12.8% in FY22.
• Depreciation charges increased by 2.1% and finance costs decreased by 35.5% YoY, respectively.
• Other income grew by 89.0% YoY.
• Net profit for the year grew by 34.1% YoY.
• Net profit margins during the year grew from 7.0% in FY22 to 9.0% in FY23.

HARSHA ENGINEERS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	13,215	13,640	3.2%
Other income	Rs m	176	333	89.0%
Total Revenues	Rs m	13,391	13,973	4.3%
Gross profit	Rs m	1,689	1,858	10.0%
Depreciation	Rs m	354	361	2.1%
Interest	Rs m	246	158	-35.5%
Profit before tax	Rs m	1,266	1,671	32.0%
Tax	Rs m	347	438	26.4%
Profit after tax	Rs m	920	1,233	34.1%
Gross profit margin	%	12.8	13.6
Effective tax rate	%	27.4	26.2
Net profit margin	%	7.0	9.0

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HARSHA ENGINEERS Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 3 billion as compared to Rs 5 billion in FY22, thereby witnessing an decrease of -27.8%.
• Long-term debt down at Rs 79 million as compared to Rs 1 billion during FY22, a fall of 94.3%.
• Current assets rose 28% and stood at Rs 10 billion, while fixed assets rose 19% and stood at Rs 4 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 14 billion as against Rs 12 billion during FY22, thereby witnessing a growth of 25%.

HARSHA ENGINEERS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	5,219	10,718	105.4
Current Liabilities	Rs m	4,759	3,435	-27.8
Long-term Debt	Rs m	1,378	79	-94.3
Total Liabilities	Rs m	11,583	14,451	24.8
Current assets	Rs m	7,800	9,976	27.9
Fixed Assets	Rs m	3,747	4,453	18.8
Total Assets	Rs m	11,583	14,451	24.8

HARSHA ENGINEERS Cash Flow Statement Analysis

• HARSHA ENGINEERS's cash flow from operating activities (CFO) during FY23 stood at Rs 1 billion, an improvement of 263.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -3 billion, an improvement of 494.0% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 2 billion, an improvement of 5,698% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 410 million from the Rs -116 million net cash flows seen during FY22.

HARSHA ENGINEERS 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	365	1,327	263.8%
Cash Flow from Investing Activities	Rs m	-518	-3,079	-
Cash Flow from Financing Activities	Rs m	37	2,163	5,697.6%
Net Cash Flow	Rs m	-116	410	-

Current Valuations for HARSHA ENGINEERS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 13.5, an improvement from the EPS of Rs 11.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 414.5, stands at 32.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.5 times, while the price to sales ratio stands at 2.8 times.
• The company's price to cash flow (P/CF) ratio stood at 23.9 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	171.1	149.8
TTM Earnings per share	Rs	11.9	13.5
Diluted earnings per share	Rs	10.1	13.5
Price to Cash Flow	x	0.0	23.9
TTM P/E ratio	x	0.0	32.3
Price / Book Value ratio	x	0.0	3.6
Market Cap	Rs m	0	38,084
Dividends per share (Unadj.)	Rs	0.0	1.0

Ratio Analysis for HARSHA ENGINEERS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.9x during FY23, from 1.6x 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 11.6x during FY23, from 6.2x 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 11.5% during FY23, from 17.6% 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 16.9% during FY23, from 22.9% 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 declined and down at 9.6% during FY23, from 10.1% 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	1.6	2.9
Debtors’ Days	Days	781	750
Interest coverage	x	6.2	11.6
Debt to equity ratio	x	0.3	0.0
Return on assets	%	10.1	9.6
Return on equity	%	17.6	11.5
Return on capital employed	%	22.9	16.9

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

HARSHA ENGINEERS Share Price Performance

Over the last one year, HARSHA ENGINEERS share price has moved down from Rs 445.8 to Rs 414.5, registering a loss of Rs 31.3 or around 7.0%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 47,961.7 (up 0.3%). Over the last one year it has moved up from 31,601.1 to 47,961.7, a gain of 16,361 points (up 51.8%).

Overall, the S&P BSE SENSEX is up 14.6% over the year.

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