HIKAL. 2022-23 Annual Report Analysis

Wed, 29 Nov

HIKAL. 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.

HIKAL. Income Statement Analysis

• Operating income during the year rose 4.1% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 24.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 12.7% in FY23 as against 17.5% in FY22.
• Depreciation charges increased by 13.9% and finance costs increased by 54.1% YoY, respectively.
• Other income grew by 10.6% YoY.
• Net profit for the year declined by 51.2% YoY.
• Net profit margins during the year declined from 8.3% in FY22 to 3.9% in FY23.

HIKAL. Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	19,427	20,230	4.1%
Other income	Rs m	49	54	10.6%
Total Revenues	Rs m	19,476	20,284	4.2%
Gross profit	Rs m	3,406	2,571	-24.5%
Depreciation	Rs m	957	1,090	13.9%
Interest	Rs m	312	481	54.1%
Profit before tax	Rs m	2,186	1,054	-51.8%
Tax	Rs m	581	270	-53.5%
Profit after tax	Rs m	1,605	784	-51.2%
Gross profit margin	%	17.5	12.7
Effective tax rate	%	26.6	25.6
Net profit margin	%	8.3	3.9

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HIKAL. Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 7 billion as compared to Rs 8 billion in FY22, thereby witnessing an decrease of -16.6%.
• Long-term debt stood at Rs 5 billion as compared to Rs 3 billion during FY22, a growth of 70.9%.
• Current assets fell 5% and stood at Rs 10 billion, while fixed assets rose 15% and stood at Rs 15 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 25 billion as against Rs 23 billion during FY22, thereby witnessing a growth of 6%.

HIKAL. Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	10,680	11,335	6.1
Current Liabilities	Rs m	8,281	6,908	-16.6
Long-term Debt	Rs m	2,867	4,899	70.9
Total Liabilities	Rs m	23,280	24,707	6.1
Current assets	Rs m	10,232	9,683	-5.4
Fixed Assets	Rs m	13,048	15,024	15.1
Total Assets	Rs m	23,280	24,707	6.1

HIKAL. Cash Flow Statement Analysis

• HIKAL.'s cash flow from operating activities (CFO) during FY23 stood at Rs 3 billion, an improvement of 7.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -3 billion, an improvement of 2.8% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -77 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 153 million from the Rs 38 million net cash flows seen during FY22.

HIKAL. 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	2,937	3,153	7.3%
Cash Flow from Investing Activities	Rs m	-2,844	-2,923	-
Cash Flow from Financing Activities	Rs m	-56	-77	-
Net Cash Flow	Rs m	38	153	301.9%

Current Valuations for HIKAL.

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 6.4, an decline from the EPS of Rs 13.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 272.1, stands at 41.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.0 times, while the price to sales ratio stands at 1.7 times.
• The company's price to cash flow (P/CF) ratio stood at 22.1 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	157.6	164.1
TTM Earnings per share	Rs	13.0	6.4
Diluted earnings per share	Rs	13.0	6.4
Price to Cash Flow	x	19.4	22.1
TTM P/E ratio	x	30.9	41.0
Price / Book Value ratio	x	5.1	3.7
Market Cap	Rs m	54,672	41,420
Dividends per share (Unadj.)	Rs	1.6	1.2

Ratio Analysis for HIKAL.

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x during FY23, from 1.2x 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 3.2x during FY23, from 8.0x 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 6.9% during FY23, from 15.0% 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 9.5% during FY23, from 18.4% 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 declined and down at 5.1% during FY23, from 8.2% 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	1.2	1.4
Debtors’ Days	Days	82	80
Interest coverage	x	8.0	3.2
Debt to equity ratio	x	0.3	0.4
Return on assets	%	8.2	5.1
Return on equity	%	15.0	6.9
Return on capital employed	%	18.4	9.5

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

HIKAL. Share Price Performance

Over the last one year, HIKAL. share price has moved down from Rs 342.9 to Rs 272.1, registering a loss of Rs 70.8 or around 20.7%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 29,845.8 (up 0.6%). Over the last one year it has moved up from 23,852.1 to 29,845.8, a gain of 5,994 points (up 25.1%).

Overall, the S&P BSE SENSEX is up 6.9% over the year.

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