HINDUSTAN ZINC 2022-23 Annual Report Analysis

Sun, 6 Aug

HINDUSTAN ZINC 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.

HINDUSTAN ZINC Income Statement Analysis

• Operating income during the year rose 15.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 8.8% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 51.3% in FY23 as against 54.7% in FY22.
• Depreciation charges increased by 11.9% and finance costs increased by 14.8% YoY, respectively.
• Other income grew by 13.4% YoY.
• Net profit for the year grew by 9.2% YoY.
• Net profit margins during the year declined from 32.7% in FY22 to 30.8% in FY23.

HINDUSTAN ZINC Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	294,400	340,980	15.8%
Other income	Rs m	12,160	13,790	13.4%
Total Revenues	Rs m	306,560	354,770	15.7%
Gross profit	Rs m	160,910	175,060	8.8%
Depreciation	Rs m	29,170	32,640	11.9%
Interest	Rs m	2,900	3,330	14.8%
Profit before tax	Rs m	141,000	152,880	8.4%
Tax	Rs m	44,710	47,770	6.8%
Profit after tax	Rs m	96,290	105,110	9.2%
Gross profit margin	%	54.7	51.3
Effective tax rate	%	31.7	31.2
Net profit margin	%	32.7	30.8

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HINDUSTAN ZINC Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 175 billion as compared to Rs 61 billion in FY22, thereby witnessing an increase of 186.4%.
• Long-term debt down at Rs 15 billion as compared to Rs 21 billion during FY22, a fall of 28.9%.
• Current assets fell 38% and stood at Rs 148 billion, while fixed assets fell 0% and stood at Rs 207 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 355 billion as against Rs 447 billion during FY22, thereby witnessing a fall of 21%.

HINDUSTAN ZINC Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	342,810	129,320	-62.3
Current Liabilities	Rs m	60,940	174,530	186.4
Long-term Debt	Rs m	21,110	15,000	-28.9
Total Liabilities	Rs m	446,700	354,670	-20.6
Current assets	Rs m	239,820	148,040	-38.3
Fixed Assets	Rs m	206,880	206,630	-0.1
Total Assets	Rs m	446,700	354,670	-20.6

HINDUSTAN ZINC Cash Flow Statement Analysis

• HINDUSTAN ZINC's cash flow from operating activities (CFO) during FY23 stood at Rs 151 billion, an improvement of 19.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs 66 billion, an improvement of 675.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -232 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -15 billion from the Rs 13 billion net cash flows seen during FY22.

HINDUSTAN ZINC 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	126,910	151,290	19.2%
Cash Flow from Investing Activities	Rs m	8,460	65,620	675.7%
Cash Flow from Financing Activities	Rs m	-122,580	-232,240	-
Net Cash Flow	Rs m	12,790	-15,330	-

Current Valuations for HINDUSTAN ZINC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 24.9, an improvement from the EPS of Rs 22.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 318.3, stands at 14.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 10.4 times, while the price to sales ratio stands at 3.9 times.
• The company's price to cash flow (P/CF) ratio stood at 9.6 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	69.7	80.7
TTM Earnings per share	Rs	22.8	24.9
Diluted earnings per share	Rs	22.8	24.9
Price to Cash Flow	x	10.4	9.6
TTM P/E ratio	x	13.6	14.3
Price / Book Value ratio	x	4.2	10.2
Market Cap	Rs m	1,441,256	1,321,257
Dividends per share (Unadj.)	Rs	18.0	75.5

Ratio Analysis for HINDUSTAN ZINC

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.8x during FY23, from 3.9x 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 46.9x during FY23, from 49.6x 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 81.3% during FY23, from 28.1% 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 108.2% during FY23, from 39.5% 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 30.6% during FY23, from 22.2% 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	3.9	0.8
Debtors’ Days	Days	1	0
Interest coverage	x	49.6	46.9
Debt to equity ratio	x	0.1	0.1
Return on assets	%	22.2	30.6
Return on equity	%	28.1	81.3
Return on capital employed	%	39.5	108.2

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

HINDUSTAN ZINC Share Price Performance

Over the last one year, HINDUSTAN ZINC share price has moved up from Rs 272.3 to Rs 318.3, registering a gain of Rs 46.0 or around 16.9%.

Overall, the S&P BSE SENSEX is up 12.6% over the year.

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