HI-TECH GEARS 2022-23 Annual Report Analysis

Wed, 11 Oct

HI-TECH GEARS 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.

HI-TECH GEARS Income Statement Analysis

• Operating income during the year rose 20.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 72.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 12.1% in FY23 as against 8.4% in FY22.
• Depreciation charges increased by 57.1% and finance costs increased by 25.4% YoY, respectively.
• Other income grew by 0.7% YoY.
• Net profit for the year declined by NA YoY.
• Net profit margins during the year grew from 0.1% in FY22 to 2.0% in FY23.

HI-TECH GEARS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	9,706	11,692	20.5%
Other income	Rs m	79	79	0.7%
Total Revenues	Rs m	9,785	11,772	20.3%
Gross profit	Rs m	818	1,413	72.8%
Depreciation	Rs m	523	822	57.1%
Interest	Rs m	264	332	25.4%
Profit before tax	Rs m	109	339	211.1%
Tax	Rs m	120	108	-9.9%
Profit after tax	Rs m	-11	231	NA
Gross profit margin	%	8.4	12.1
Effective tax rate	%	110.1	31.9
Net profit margin	%	-0.1	2.0

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HI-TECH GEARS Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 4 billion as compared to Rs 3 billion in FY22, thereby witnessing an increase of 12.2%.
• Long-term debt down at Rs 2 billion as compared to Rs 3 billion during FY22, a fall of 25.3%.
• Current assets rose 9% and stood at Rs 4 billion, while fixed assets fell 10% and stood at Rs 5 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 10 billion as against Rs 10 billion during FY22, thereby witnessing a fall of 3%.

HI-TECH GEARS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	3,307	3,540	7.0
Current Liabilities	Rs m	3,419	3,835	12.2
Long-term Debt	Rs m	3,213	2,401	-25.3
Total Liabilities	Rs m	10,023	9,772	-2.5
Current assets	Rs m	4,099	4,464	8.9
Fixed Assets	Rs m	5,924	5,307	-10.4
Total Assets	Rs m	10,023	9,772	-2.5

HI-TECH GEARS Cash Flow Statement Analysis

• HI-TECH GEARS's cash flow from operating activities (CFO) during FY23 stood at Rs 541 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -407 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -409 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -275 million from the Rs 97 million net cash flows seen during FY22.

HI-TECH GEARS 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	556	541	-2.6%
Cash Flow from Investing Activities	Rs m	-564	-407	-
Cash Flow from Financing Activities	Rs m	105	-409	-
Net Cash Flow	Rs m	97	-275	-

Current Valuations for HI-TECH GEARS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 12.3, an improvement from the EPS of Rs -0.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 374.0, stands at 21.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.0 times, while the price to sales ratio stands at 0.6 times.
• The company's price to cash flow (P/CF) ratio stood at 4.0 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	517.1	622.9
TTM Earnings per share	Rs	-0.6	12.3
Diluted earnings per share	Rs	-0.6	12.3
Price to Cash Flow	x	7.9	4.0
TTM P/E ratio	x	-366.0	21.9
Price / Book Value ratio	x	1.5	1.2
Market Cap	Rs m	4,879	4,207
Dividends per share (Unadj.)	Rs	1.5	2.5

Ratio Analysis for HI-TECH GEARS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.2x 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 improved and stood at 2.0x during FY23, from 1.4x 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 6.5% during FY23, from -0.3% 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 improved and stood at 11.3% during FY23, from 5.7% 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 improved and stood at 5.8% during FY23, from 2.5% 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	1.2	1.2
Debtors’ Days	Days	65	65
Interest coverage	x	1.4	2.0
Debt to equity ratio	x	1.0	0.7
Return on assets	%	2.5	5.8
Return on equity	%	-0.3	6.5
Return on capital employed	%	5.7	11.3

To see how HI-TECH GEARS has performed over the last 5 years, please visit here.

HI-TECH GEARS Share Price Performance

Over the last one year, HI-TECH GEARS share price has moved up from Rs 204.3 to Rs 374.0, registering a gain of Rs 169.8 or around 83.1%.

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

(To know more, check out historical annual results for HI-TECH GEARS and quarterly results for HI-TECH GEARS)