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KERNEX MICROSYS 2022-23 Annual Report Analysis

Wed, 25 Oct

KERNEX MICROSYS 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.

KERNEX MICROSYS Income Statement Analysis

• Operating income during the year fell 39.3% on a year-on-year (YoY) basis.
• The company's operating profit was by NA YoY during the fiscal. Operating profit margins witnessed a growth and stood at 416.3% in FY23 as against 208.4% in FY22.
• Depreciation charges increased by 66.1% and finance costs decreased by 29.5% YoY, respectively.
• Other income grew by 14.6% YoY.
• Net profit for the year grew by NA YoY.
• Net profit margins during the year declined from 258.7% in FY22 to 495.6% in FY23.

KERNEX MICROSYS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	67	40	-39.3%
Other income	Rs m	17	20	14.6%
Total Revenues	Rs m	84	60	-28.1%
Gross profit	Rs m	-139	-168	NA
Depreciation	Rs m	14	24	66.1%
Interest	Rs m	33	23	-29.5%
Profit before tax	Rs m	-169	-195	NA
Tax	Rs m	4	5	35.6%
Profit after tax	Rs m	-172	-200	NA
Gross profit margin	%	-208.4	-416.3
Effective tax rate	%	-2.1	-2.4
Net profit margin	%	-258.7	-495.6

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KERNEX MICROSYS Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 175 million as compared to Rs 283 million in FY22, thereby witnessing an decrease of -37.9%.
• Long-term debt stood at Rs 5 million as compared to Rs 0 million during FY22, a fall of 0.0%.
• Current assets rose 48% and stood at Rs 730 million, while fixed assets rose 1% and stood at Rs 287 million in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 1 billion as against Rs 775 million during FY22, thereby witnessing a growth of 31%.

KERNEX MICROSYS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	427	821	92.3
Current Liabilities	Rs m	283	175	-37.9
Long-term Debt	Rs m	0	5	0.0
Total Liabilities	Rs m	775	1,016	31.1
Current assets	Rs m	493	730	48.1
Fixed Assets	Rs m	282	287	1.5
Total Assets	Rs m	775	1,016	31.1

KERNEX MICROSYS Cash Flow Statement Analysis

• KERNEX MICROSYS's cash flow from operating activities (CFO) during FY23 stood at Rs -321 million, an improvement of 595.0% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs 0 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 451 million, an improvement of 136,706% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 131 million from the Rs 17 million net cash flows seen during FY22.

KERNEX MICROSYS 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	-46	-321	-
Cash Flow from Investing Activities	Rs m	63	0	-99.7%
Cash Flow from Financing Activities	Rs m	0	451	136,706.1%
Net Cash Flow	Rs m	17	131	665.3%

Current Valuations for KERNEX MICROSYS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -12.9, an improvement from the EPS of Rs -13.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 545.0, stands at -47.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 10.3 times, while the price to sales ratio stands at 208.6 times.
• The company's price to cash flow (P/CF) ratio stood at -23.4 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	5.3	2.6
TTM Earnings per share	Rs	-13.8	-12.9
Diluted earnings per share	Rs	-11.1	-13.0
Price to Cash Flow	x	-14.7	-23.4
TTM P/E ratio	x	-13.5	-47.8
Price / Book Value ratio	x	3.2	5.0
Market Cap	Rs m	1,358	4,123
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for KERNEX MICROSYS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 4.2x during FY23, from 1.7x 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 -7.4x during FY23, from -4.1x 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 -24.4% during FY23, from -40.3% 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 -20.8% during FY23, from -31.8% 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 improved and stood at -17.4% during FY23, from -18.0% 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	1.7	4.2
Debtors’ Days	Days	5,954	8,264
Interest coverage	x	-4.1	-7.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	-18.0	-17.4
Return on equity	%	-40.3	-24.4
Return on capital employed	%	-31.8	-20.8

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

KERNEX MICROSYS Share Price Performance

Over the last one year, KERNEX MICROSYS share price has moved up from Rs 384.6 to Rs 545.0, registering a gain of Rs 160.4 or around 41.7%.

Meanwhile, the S&P BSE IT Index is trading at Rs 30,914.2 (down 1.1%). Over the last one year it has moved up from 28,930.6 to 30,914.2, a gain of 1,984 points (up 6.9%).

Overall, the S&P BSE SENSEX is up 8.2% over the year.

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