HCC 2022-23 Annual Report Analysis

Fri, 11 Aug

HCC 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.

HCC Income Statement Analysis

• Operating income during the year fell 7.6% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 39.8% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 10.1% in FY23 as against 15.5% in FY22.
• Depreciation charges decreased by 7.1% and finance costs decreased by 2.3% YoY, respectively.
• Other income declined by 64.8% YoY.
• Net profit for the year declined by NA YoY.
• Net profit margins during the year declined from 5.4% in FY22 to 0.3% in FY23.

HCC Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	106,683	98,566	-7.6%
Other income	Rs m	1,582	557	-64.8%
Total Revenues	Rs m	108,265	99,123	-8.4%
Gross profit	Rs m	16,537	9,960	-39.8%
Depreciation	Rs m	1,383	1,286	-7.1%
Interest	Rs m	10,363	10,123	-2.3%
Profit before tax	Rs m	6,373	-891	NA
Tax	Rs m	655	-625	NA
Profit after tax	Rs m	5,717	-266	NA
Gross profit margin	%	15.5	10.1
Effective tax rate	%	10.3	70.2
Net profit margin	%	5.4	-0.3

Download Now: 7 Unstoppable Growth Engines of India's $10 Trillion Bull Run...

HCC Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 70 billion as compared to Rs 80 billion in FY22, thereby witnessing an decrease of -12.7%.
• Long-term debt stood at Rs 49 billion as compared to Rs 12 billion during FY22, a growth of 311.6%.
• Current assets fell 10% and stood at Rs 76 billion, while fixed assets rose 265% and stood at Rs 48 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 124 billion as against Rs 135 billion during FY22, thereby witnessing a fall of 8%.

HCC Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	-6,591	-7,144	NA
Current Liabilities	Rs m	80,428	70,221	-12.7
Long-term Debt	Rs m	11,785	48,511	311.6
Total Liabilities	Rs m	134,825	123,979	-8.0
Current assets	Rs m	84,567	76,278	-9.8
Fixed Assets	Rs m	13,068	47,680	264.9
Total Assets	Rs m	134,825	123,979	-8.0

HCC Cash Flow Statement Analysis

• HCC's cash flow from operating activities (CFO) during FY23 stood at Rs 169 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs 4 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -6 billion, an improvement of 9% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -1 billion from the Rs 788 million net cash flows seen during FY22.

HCC 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	9,466	169	-98.2%
Cash Flow from Investing Activities	Rs m	-2,250	4,247	-
Cash Flow from Financing Activities	Rs m	-6,600	-6,031	-
Net Cash Flow	Rs m	788	-1,391	-

Current Valuations for HCC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -0.2, 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 23.5, stands at 12.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at -5.0 times, while the price to sales ratio stands at 0.4 times.
• The company's price to cash flow (P/CF) ratio stood at 24.7 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	70.5	65.1
TTM Earnings per share	Rs	3.8	-0.2
Diluted earnings per share	Rs	3.8	-0.2
Price to Cash Flow	x	3.3	24.7
TTM P/E ratio	x	12.1	12.1
Price / Book Value ratio	x	-3.1	-3.5
Market Cap	Rs m	20,448	25,146
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for HCC

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.1x 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 deteriorated and stood at 0.9x during FY23, from 1.6x 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 3.7% during FY23, from -86.7% 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 declined and down at 22.3% during FY23, from 322.2% 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 8.0% during FY23, from 11.9% 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	1.1	1.1
Debtors’ Days	Days	7	8
Interest coverage	x	1.6	0.9
Debt to equity ratio	x	-1.8	-6.8
Return on assets	%	11.9	8.0
Return on equity	%	-86.7	3.7
Return on capital employed	%	322.2	22.3

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

HCC Share Price Performance

Over the last one year, HCC share price has moved up from Rs 12.3 to Rs 23.5, registering a gain of Rs 11.2 or around 90.7%.

Meanwhile, the S&P BSE REALTY Index is trading at Rs 4,267.0 (down 0.3%). Over the last one year it has moved up from 3,508.2 to 4,267.0, a gain of 759 points (up 21.6%).

Overall, the S&P BSE SENSEX is up 11.7% over the year.

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