KANCO TEA & INDUSTRIES 2022-23 Annual Report Analysis

Mon, 3 Jul

KANCO TEA & INDUSTRIES 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.

KANCO TEA & INDUSTRIES Income Statement Analysis

• Operating income during the year rose 26.8% on a year-on-year (YoY) basis.
• The company's operating profit was by NA YoY during the fiscal. Operating profit margins witnessed a fall and down at 11.7% in FY23 as against 1.7% in FY22.
• Depreciation charges increased by 7.6% and finance costs decreased by 27.1% YoY, respectively.
• Other income declined by 91.5% YoY.
• Net profit for the year grew by 129.9% YoY.
• Net profit margins during the year grew from 4.6% in FY22 to 8.3% in FY23.

KANCO TEA & INDUSTRIES Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	835	1,058	26.8%
Other income	Rs m	114	10	-91.5%
Total Revenues	Rs m	949	1,068	12.6%
Gross profit	Rs m	-14	124	NA
Depreciation	Rs m	25	26	7.6%
Interest	Rs m	33	24	-27.1%
Profit before tax	Rs m	43	84	95.9%
Tax	Rs m	5	-4	NA
Profit after tax	Rs m	38	87	129.9%
Gross profit margin	%	-1.7	11.7
Effective tax rate	%	10.9	-4.6
Net profit margin	%	4.6	8.3

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KANCO TEA & INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 404 million as compared to Rs 359 million in FY22, thereby witnessing an increase of 12.3%.
• Long-term debt down at Rs 116 million as compared to Rs 145 million during FY22, a fall of 20.4%.
• Current assets rose 3% and stood at Rs 363 million, while fixed assets rose 7% and stood at Rs 865 million in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 1 billion as against Rs 1 billion during FY22, thereby witnessing a growth of 6%.

KANCO TEA & INDUSTRIES Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	700	762	8.8
Current Liabilities	Rs m	359	404	12.3
Long-term Debt	Rs m	145	116	-20.4
Total Liabilities	Rs m	1,161	1,227	5.8
Current assets	Rs m	351	363	3.2
Fixed Assets	Rs m	809	865	6.9
Total Assets	Rs m	1,161	1,227	5.8

KANCO TEA & INDUSTRIES Cash Flow Statement Analysis

• KANCO TEA & INDUSTRIES 's cash flow from operating activities (CFO) during FY23 stood at Rs 121 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -18 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 15 million, an improvement of 118% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 118 million from the Rs -21 million net cash flows seen during FY22.

KANCO TEA & INDUSTRIES 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	183	121	-33.6%
Cash Flow from Investing Activities	Rs m	-122	-18	-
Cash Flow from Financing Activities	Rs m	-82	15	-
Net Cash Flow	Rs m	-21	118	-

Current Valuations for KANCO TEA & INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 17.1, an improvement from the EPS of Rs 7.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 71.6, stands at 4.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.5 times, while the price to sales ratio stands at 0.3 times.
• The company's price to cash flow (P/CF) ratio stood at 3.9 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	163.0	206.7
TTM Earnings per share	Rs	7.4	17.1
Diluted earnings per share	Rs	7.4	17.1
Price to Cash Flow	x	6.7	3.9
TTM P/E ratio	x	11.0	4.1
Price / Book Value ratio	x	0.5	0.6
Market Cap	Rs m	361	443
Dividends per share (Unadj.)	Rs	1.0	1.0

Ratio Analysis for KANCO TEA & INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.9x during FY23, from 1.0x 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 4.5x during FY23, from 2.3x 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 11.5% during FY23, from 5.4% 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 12.2% during FY23, from 8.9% 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 9.1% during FY23, from 6.1% 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	1.0	0.9
Debtors’ Days	Days	3,442	4,381
Interest coverage	x	2.3	4.5
Debt to equity ratio	x	0.2	0.2
Return on assets	%	6.1	9.1
Return on equity	%	5.4	11.5
Return on capital employed	%	8.9	12.2

To see how KANCO TEA & INDUSTRIES has performed over the last 5 years, please visit here.

KANCO TEA & INDUSTRIES Share Price Performance

Over the last one year, KANCO TEA & INDUSTRIES share price has moved up from Rs 63.7 to Rs 71.6, registering a gain of Rs 8.0 or around 12.5%.

Overall, the S&P BSE SENSEX is up 22.3% over the year.

(To know more, check out historical annual results for KANCO TEA & INDUSTRIES and quarterly results for KANCO TEA & INDUSTRIES )