HERANBA INDUSTRIES 2022-23 Annual Report Analysis

Wed, 2 Aug

HERANBA INDUSTRIES 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.

HERANBA INDUSTRIES Income Statement Analysis

• Operating income during the year fell 8.7% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 38.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 12.2% in FY23 as against 17.9% in FY22.
• Depreciation charges increased by 14.2% and finance costs increased by 94.3% YoY, respectively.
• Other income declined by 29.8% YoY.
• Net profit for the year declined by 41.8% YoY.
• Net profit margins during the year declined from 13.0% in FY22 to 8.3% in FY23.

HERANBA INDUSTRIES Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	14,504	13,244	-8.7%
Other income	Rs m	194	136	-29.8%
Total Revenues	Rs m	14,697	13,380	-9.0%
Gross profit	Rs m	2,598	1,611	-38.0%
Depreciation	Rs m	198	226	14.2%
Interest	Rs m	41	79	94.3%
Profit before tax	Rs m	2,553	1,441	-43.5%
Tax	Rs m	662	340	-48.6%
Profit after tax	Rs m	1,891	1,101	-41.8%
Gross profit margin	%	17.9	12.2
Effective tax rate	%	25.9	23.6
Net profit margin	%	13.0	8.3

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HERANBA INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 3 billion as compared to Rs 4 billion in FY22, thereby witnessing an decrease of -14.1%.
• Current assets fell 5% and stood at Rs 8 billion, while fixed assets rose 31% and stood at Rs 3 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 12 billion as against Rs 11 billion during FY22, thereby witnessing a growth of 4%.

HERANBA INDUSTRIES Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	7,145	8,161	14.2
Current Liabilities	Rs m	3,850	3,307	-14.1
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	11,051	11,522	4.3
Current assets	Rs m	8,800	8,356	-5.0
Fixed Assets	Rs m	2,251	2,947	30.9
Total Assets	Rs m	11,051	11,522	4.3

HERANBA INDUSTRIES Cash Flow Statement Analysis

• HERANBA INDUSTRIES's cash flow from operating activities (CFO) during FY23 stood at Rs 1 billion, an improvement of 24.9% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -1 billion, an improvement of 22.4% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -181 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 44 million from the Rs 101 million net cash flows seen during FY22.

HERANBA INDUSTRIES 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	981	1,225	24.9%
Cash Flow from Investing Activities	Rs m	-817	-1,001	-
Cash Flow from Financing Activities	Rs m	-63	-181	-
Net Cash Flow	Rs m	101	44	-56.9%

Current Valuations for HERANBA INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 27.5, an decline from the EPS of Rs 47.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 369.3, stands at 14.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.8 times, while the price to sales ratio stands at 1.1 times.
• The company's price to cash flow (P/CF) ratio stood at 14.1 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	362.5	331.0
TTM Earnings per share	Rs	47.3	27.5
Diluted earnings per share	Rs	47.2	27.5
Price to Cash Flow	x	11.6	14.1
TTM P/E ratio	x	12.8	14.2
Price / Book Value ratio	x	4.0	2.3
Market Cap	Rs m	28,353	18,741
Dividends per share (Unadj.)	Rs	2.0	1.3

Ratio Analysis for HERANBA INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.5x 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 19.2x during FY23, from 63.7x 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 13.5% during FY23, from 26.5% 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 18.6% during FY23, from 36.3% 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 10.2% during FY23, from 17.5% 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	2.5
Debtors’ Days	Days	11	11
Interest coverage	x	63.7	19.2
Debt to equity ratio	x	0.0	0.0
Return on assets	%	17.5	10.2
Return on equity	%	26.5	13.5
Return on capital employed	%	36.3	18.6

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

HERANBA INDUSTRIES Share Price Performance

Over the last one year, HERANBA INDUSTRIES share price has moved down from Rs 594.2 to Rs 369.3, registering a loss of Rs 224.9 or around 37.8%.

Overall, the S&P BSE SENSEX is up 13.2% over the year.

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