JK CEMENT 2022-23 Annual Report Analysis

Mon, 24 Jul

JK CEMENT 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.

JK CEMENT Income Statement Analysis

• Operating income during the year rose 21.6% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 11.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 13.5% in FY23 as against 18.5% in FY22.
• Depreciation charges increased by 33.8% and finance costs increased by 15.8% YoY, respectively.
• Other income declined by 38.8% YoY.
• Net profit for the year declined by 38.3% YoY.
• Net profit margins during the year declined from 8.5% in FY22 to 4.3% in FY23.

JK CEMENT Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	79,908	97,202	21.6%
Other income	Rs m	1,429	874	-38.8%
Total Revenues	Rs m	81,337	98,076	20.6%
Gross profit	Rs m	14,822	13,143	-11.3%
Depreciation	Rs m	3,425	4,582	33.8%
Interest	Rs m	2,697	3,122	15.8%
Profit before tax	Rs m	10,129	6,313	-37.7%
Tax	Rs m	3,337	2,122	-36.4%
Profit after tax	Rs m	6,792	4,191	-38.3%
Gross profit margin	%	18.5	13.5
Effective tax rate	%	32.9	33.6
Net profit margin	%	8.5	4.3

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JK CEMENT Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 29 billion as compared to Rs 27 billion in FY22, thereby witnessing an increase of 10.4%.
• Long-term debt stood at Rs 41 billion as compared to Rs 30 billion during FY22, a growth of 37.3%.
• Current assets rose 6% and stood at Rs 37 billion, while fixed assets rose 21% and stood at Rs 95 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 133 billion as against Rs 114 billion during FY22, thereby witnessing a growth of 17%.

JK CEMENT Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	43,249	46,868	8.4
Current Liabilities	Rs m	26,704	29,468	10.4
Long-term Debt	Rs m	29,866	41,010	37.3
Total Liabilities	Rs m	114,030	132,851	16.5
Current assets	Rs m	35,247	37,383	6.1
Fixed Assets	Rs m	78,783	95,468	21.2
Total Assets	Rs m	114,030	132,851	16.5

JK CEMENT Cash Flow Statement Analysis

• JK CEMENT's cash flow from operating activities (CFO) during FY23 stood at Rs 14 billion, an improvement of 56.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -20 billion, an improvement of 102.2% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 7 billion, an improvement of 1,102% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 2 billion from the Rs -437 million net cash flows seen during FY22.

JK CEMENT 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	8,785	13,771	56.8%
Cash Flow from Investing Activities	Rs m	-9,963	-20,148	-
Cash Flow from Financing Activities	Rs m	617	7,413	1,101.8%
Net Cash Flow	Rs m	-437	1,541	-

Current Valuations for JK CEMENT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 54.2, an decline from the EPS of Rs 87.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 3,148.9, stands at 58.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.2 times, while the price to sales ratio stands at 2.5 times.
• The company's price to cash flow (P/CF) ratio stood at 23.1 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	1,034.1	1,258.0
TTM Earnings per share	Rs	87.9	54.2
Diluted earnings per share	Rs	87.9	54.2
Price to Cash Flow	x	18.4	23.1
TTM P/E ratio	x	27.7	58.1
Price / Book Value ratio	x	5.3	4.3
Market Cap	Rs m	230,721	202,947
Dividends per share (Unadj.)	Rs	15.0	15.0

Ratio Analysis for JK CEMENT

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.3x during FY23, from 1.3x 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 3.0x during FY23, from 4.8x 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 8.9% during FY23, from 15.7% 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 10.7% during FY23, from 17.5% 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 8.3% 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	1.3	1.3
Debtors’ Days	Days	195	180
Interest coverage	x	4.8	3.0
Debt to equity ratio	x	0.7	0.9
Return on assets	%	8.3	5.5
Return on equity	%	15.7	8.9
Return on capital employed	%	17.5	10.7

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

JK CEMENT Share Price Performance

Over the last one year, JK CEMENT share price has moved up from Rs 2,331.0 to Rs 3,148.9, registering a gain of Rs 817.9 or around 35.1%.

Overall, the S&P BSE SENSEX is up 19.8% over the year.

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