ISMT 2022-23 Annual Report Analysis

Sun, 9 Jul

ISMT 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.

ISMT Income Statement Analysis

• Operating income during the year rose 19.4% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 91.8% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 8.2% in FY23 as against 119.0% in FY22.
• Depreciation charges decreased by 6.2% and finance costs increased by 64.1% YoY, respectively.
• Other income declined by 16.1% YoY.
• Net profit for the year declined by 96.3% YoY.
• Net profit margins during the year declined from 109.9% in FY22 to 3.4% in FY23.

ISMT Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	21,606	25,802	19.4%
Other income	Rs m	214	180	-16.1%
Total Revenues	Rs m	21,820	25,982	19.1%
Gross profit	Rs m	25,711	2,109	-91.8%
Depreciation	Rs m	624	586	-6.2%
Interest	Rs m	132	217	64.1%
Profit before tax	Rs m	25,169	1,486	-94.1%
Tax	Rs m	1,428	609	-57.4%
Profit after tax	Rs m	23,741	877	-96.3%
Gross profit margin	%	119.0	8.2
Effective tax rate	%	5.7	41.0
Net profit margin	%	109.9	3.4

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ISMT Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 5 billion as compared to Rs 5 billion in FY22, thereby witnessing an decrease of -10.7%.
• Current assets rose 15% and stood at Rs 9 billion, while fixed assets fell 7% and stood at Rs 11 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 20 billion as against Rs 20 billion during FY22, thereby witnessing a growth of 2%.

ISMT Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	13,865	14,779	6.6
Current Liabilities	Rs m	5,167	4,614	-10.7
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	19,573	20,006	2.2
Current assets	Rs m	8,056	9,295	15.4
Fixed Assets	Rs m	11,516	10,711	-7.0
Total Assets	Rs m	19,573	20,006	2.2

ISMT Cash Flow Statement Analysis

• ISMT's cash flow from operating activities (CFO) during FY23 stood at Rs 920 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs 348 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -2 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -251 million from the Rs 196 million net cash flows seen during FY22.

ISMT 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	1,041	920	-11.6%
Cash Flow from Investing Activities	Rs m	-4	348	-
Cash Flow from Financing Activities	Rs m	-840	-1,520	-
Net Cash Flow	Rs m	196	-251	-

Current Valuations for ISMT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 2.9, an decline from the EPS of Rs 79.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 77.5, stands at 26.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.6 times, while the price to sales ratio stands at 0.9 times.
• The company's price to cash flow (P/CF) ratio stood at 13.7 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	71.9	85.9
TTM Earnings per share	Rs	79.0	2.9
Diluted earnings per share	Rs	79.0	2.9
Price to Cash Flow	x	0.6	13.7
TTM P/E ratio	x	0.6	26.5
Price / Book Value ratio	x	0.9	1.4
Market Cap	Rs m	12,549	20,117
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for ISMT

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.0x during FY23, from 1.6x 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 7.9x during FY23, from 191.5x 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 5.9% during FY23, from 171.2% 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 11.5% during FY23, from 182.5% 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 declined and down at 5.5% during FY23, from 122.0% 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	1.6	2.0
Debtors’ Days	Days	5	4
Interest coverage	x	191.5	7.9
Debt to equity ratio	x	0.0	0.0
Return on assets	%	122.0	5.5
Return on equity	%	171.2	5.9
Return on capital employed	%	182.5	11.5

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

ISMT Share Price Performance

Over the last one year, ISMT share price has moved up from Rs 52.5 to Rs 77.5, registering a gain of Rs 25.0 or around 47.6%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 20,730.0 (down 0.7%). Over the last one year it has moved up from 15,950.4 to 20,730.0, a gain of 4,780 points (up 30.0%).

Overall, the S&P BSE SENSEX is up 22.9% over the year.

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