EMAMI 2022-23 Annual Report Analysis

Mon, 7 Aug

EMAMI 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.

EMAMI Income Statement Analysis

• Operating income during the year rose 6.9% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 8.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 25.1% in FY23 as against 29.3% in FY22.
• Depreciation charges decreased by 26.1% and finance costs increased by 45.7% YoY, respectively.
• Other income declined by 27.6% YoY.
• Net profit for the year declined by 25.0% YoY.
• Net profit margins during the year declined from 26.3% in FY22 to 18.4% in FY23.

EMAMI Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	31,872	34,057	6.9%
Other income	Rs m	953	689	-27.6%
Total Revenues	Rs m	32,825	34,747	5.9%
Gross profit	Rs m	9,326	8,553	-8.3%
Depreciation	Rs m	3,348	2,472	-26.1%
Interest	Rs m	51	74	45.7%
Profit before tax	Rs m	6,880	6,695	-2.7%
Tax	Rs m	-1,487	421	NA
Profit after tax	Rs m	8,367	6,274	-25.0%
Gross profit margin	%	29.3	25.1
Effective tax rate	%	-21.6	6.3
Net profit margin	%	26.3	18.4

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EMAMI Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 7 billion as compared to Rs 9 billion in FY22, thereby witnessing an decrease of -20.9%.
• Current assets rose 20% and stood at Rs 13 billion, while fixed assets fell 14% and stood at Rs 15 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 27 billion as against Rs 28 billion during FY22, thereby witnessing a fall of 1%.

EMAMI Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	20,766	23,028	10.9
Current Liabilities	Rs m	9,157	7,239	-20.9
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	27,737	27,462	-1.0
Current assets	Rs m	10,728	12,868	20.0
Fixed Assets	Rs m	17,009	14,594	-14.2
Total Assets	Rs m	27,737	27,462	-1.0

EMAMI Cash Flow Statement Analysis

• EMAMI's cash flow from operating activities (CFO) during FY23 stood at Rs 7 billion, an improvement of 16.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -1 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -6 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 192 million from the Rs 78 million net cash flows seen during FY22.

EMAMI 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	6,439	7,489	16.3%
Cash Flow from Investing Activities	Rs m	-2,349	-1,128	-
Cash Flow from Financing Activities	Rs m	-4,021	-6,076	-
Net Cash Flow	Rs m	78	192	147.5%

Current Valuations for EMAMI

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 14.2, an decline from the EPS of Rs 19.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 452.9, stands at 31.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 8.6 times, while the price to sales ratio stands at 5.9 times.
• The company's price to cash flow (P/CF) ratio stood at 21.8 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	72.2	77.2
TTM Earnings per share	Rs	19.0	14.2
Diluted earnings per share	Rs	19.2	14.4
Price to Cash Flow	x	16.7	21.8
TTM P/E ratio	x	23.0	31.1
Price / Book Value ratio	x	11.2	8.3
Market Cap	Rs m	231,902	190,996
Dividends per share (Unadj.)	Rs	8.0	8.0

Ratio Analysis for EMAMI

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.8x 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 91.6x during FY23, from 136.6x 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 declined and down at 27.2% during FY23, from 40.3% 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 declined and down at 29.4% during FY23, from 33.4% 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 23.1% during FY23, from 30.3% 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	1.8
Debtors’ Days	Days	368	444
Interest coverage	x	136.6	91.6
Debt to equity ratio	x	0.0	0.0
Return on assets	%	30.3	23.1
Return on equity	%	40.3	27.2
Return on capital employed	%	33.4	29.4

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

EMAMI Share Price Performance

Over the last one year, EMAMI share price has moved down from Rs 458.7 to Rs 452.9, registering a loss of Rs 5.9 or around 1.3%.

Meanwhile, the S&P BSE FMCG Index is trading at Rs 18,785.7 (up 0.0%). Over the last one year it has moved up from 15,639.0 to 18,785.7, a gain of 3,147 points (up 20.1%).

Overall, the S&P BSE SENSEX is up 13.0% over the year.

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