JSW STEEL 2022-23 Annual Report Analysis

Sun, 9 Jul

JSW STEEL 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.

JSW STEEL Income Statement Analysis

• Operating income during the year rose 13.4% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 51.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 11.4% in FY23 as against 26.8% in FY22.
• Depreciation charges increased by 24.5% and finance costs increased by 38.9% YoY, respectively.
• Other income declined by 32.7% YoY.
• Net profit for the year declined by 80.2% YoY.
• Net profit margins during the year declined from 14.3% in FY22 to 2.5% in FY23.

JSW STEEL Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	1,463,710	1,659,600	13.4%
Other income	Rs m	15,310	10,300	-32.7%
Total Revenues	Rs m	1,479,020	1,669,900	12.9%
Gross profit	Rs m	391,830	190,010	-51.5%
Depreciation	Rs m	60,010	74,740	24.5%
Interest	Rs m	49,680	69,020	38.9%
Profit before tax	Rs m	297,450	56,550	-81.0%
Tax	Rs m	88,070	15,160	-82.8%
Profit after tax	Rs m	209,380	41,390	-80.2%
Gross profit margin	%	26.8	11.4
Effective tax rate	%	29.6	26.8
Net profit margin	%	14.3	2.5

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JSW STEEL Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 700 billion as compared to Rs 576 billion in FY22, thereby witnessing an increase of 21.6%.
• Long-term debt stood at Rs 620 billion as compared to Rs 579 billion during FY22, a growth of 7.0%.
• Current assets rose 4% and stood at Rs 681 billion, while fixed assets rose 9% and stood at Rs 1,424 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 2,105 billion as against Rs 1,965 billion during FY22, thereby witnessing a growth of 7%.

JSW STEEL Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	670,560	652,870	-2.6
Current Liabilities	Rs m	575,510	699,630	21.6
Long-term Debt	Rs m	579,290	619,660	7.0
Total Liabilities	Rs m	1,964,850	2,105,390	7.2
Current assets	Rs m	653,660	681,460	4.3
Fixed Assets	Rs m	1,311,110	1,423,890	8.6
Total Assets	Rs m	1,964,850	2,105,390	7.2

JSW STEEL Cash Flow Statement Analysis

• JSW STEEL's cash flow from operating activities (CFO) during FY23 stood at Rs 233 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -107 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -60 billion, an improvement of 59% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 66 billion from the Rs -31 billion net cash flows seen during FY22.

JSW STEEL 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	262,700	233,230	-11.2%
Cash Flow from Investing Activities	Rs m	-159,870	-107,110	-
Cash Flow from Financing Activities	Rs m	-146,570	-59,770	-
Net Cash Flow	Rs m	-31,350	66,160	-

Current Valuations for JSW STEEL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 17.2, an decline from the EPS of Rs 87.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 788.8, stands at 44.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.9 times, while the price to sales ratio stands at 1.1 times.
• The company's price to cash flow (P/CF) ratio stood at 13.6 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	609.8	690.2
TTM Earnings per share	Rs	87.2	17.2
Diluted earnings per share	Rs	86.6	17.1
Price to Cash Flow	x	6.6	13.6
TTM P/E ratio	x	8.8	44.6
Price / Book Value ratio	x	2.2	2.4
Market Cap	Rs m	1,497,314	1,574,914
Dividends per share (Unadj.)	Rs	17.4	3.4

Ratio Analysis for JSW STEEL

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.0x during FY23, from 1.1x 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 1.8x during FY23, from 7.0x 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 6.3% during FY23, from 31.2% 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 9.9% during FY23, from 27.8% 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 5.2% during FY23, from 13.2% 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	1.1	1.0
Debtors’ Days	Days	2	2
Interest coverage	x	7.0	1.8
Debt to equity ratio	x	0.9	0.9
Return on assets	%	13.2	5.2
Return on equity	%	31.2	6.3
Return on capital employed	%	27.8	9.9

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

JSW STEEL Share Price Performance

Over the last one year, JSW STEEL share price has moved up from Rs 566.0 to Rs 788.8, registering a gain of Rs 222.8 or around 39.4%.

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 JSW STEEL and quarterly results for JSW STEEL)