KSB 2021-22 Annual Report Analysis

Sat, 31 Dec

KSB has announced its results for the year ended December 2022. Let us have a look at the detailed performance review of the company during FY21-22.

KSB Income Statement Analysis

• Operating income during the year rose 21.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 17.9% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 14.0% in CY22 as against 14.4% in CY21.
• Depreciation charges increased by 4.0% and finance costs increased by 21.5% YoY, respectively.
• Other income grew by 25.2% YoY.
• Net profit for the year grew by 22.3% YoY.
• Net profit margins during the year grew from 10.0% in CY21 to 10.0% in CY22.

KSB Income Statement 2021-22

No. of Mths Year Ending		12 Dec-21*	12 Dec-22*	% Change
Net Sales	Rs m	14,973	18,220	21.7%
Other income	Rs m	337	422	25.2%
Total Revenues	Rs m	15,310	18,641	21.8%
Gross profit	Rs m	2,159	2,545	17.9%
Depreciation	Rs m	435	453	4.0%
Interest	Rs m	50	61	21.5%
Profit before tax	Rs m	2,010	2,453	22.0%
Tax	Rs m	516	625	21.1%
Profit after tax	Rs m	1,494	1,827	22.3%
Gross profit margin	%	14.4	14.0
Effective tax rate	%	25.7	25.5
Net profit margin	%	10.0	10.0

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KSB Balance Sheet Analysis

• The company's current liabilities during CY22 stood at Rs 6 billion as compared to Rs 5 billion in CY21, thereby witnessing an increase of 16.6%.
• Current assets rose 14% and stood at Rs 13 billion, while fixed assets rose 14% and stood at Rs 6 billion in CY22.
• Overall, the total assets and liabilities for CY22 stood at Rs 18 billion as against Rs 16 billion during CY21, thereby witnessing a growth of 14%.

KSB Balance Sheet as on December 2022

No. of Mths Year Ending		12 Dec-21*	12 Dec-22*	% Change
Networth	Rs m	10,108	11,431	13.1
Current Liabilities	Rs m	5,448	6,351	16.6
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	16,043	18,248	13.7
Current assets	Rs m	11,202	12,738	13.7
Fixed Assets	Rs m	4,840	5,510	13.8
Total Assets	Rs m	16,043	18,248	13.7

KSB Cash Flow Statement Analysis

• KSB's cash flow from operating activities (CFO) during CY22 stood at Rs 382 million on a YoY basis.
• Cash flow from investing activities (CFI) during CY22 stood at Rs -127 million on a YoY basis.
• Cash flow from financial activities (CFF) during CY22 stood at Rs -506 million, an improvement of 47% on a YoY basis.
• Overall, net cash flows for the company during CY22 stood at Rs -246 million from the Rs -305 million net cash flows seen during CY21.

KSB Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Dec-21	Dec-22
Cash Flow from Operating Activities	Rs m	625	382	-38.8%
Cash Flow from Investing Activities	Rs m	28	-127	-
Cash Flow from Financing Activities	Rs m	-954	-506	-
Net Cash Flow	Rs m	-305	-246	-

Current Valuations for KSB

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 52.5, an improvement from the EPS of Rs 42.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,936.9, stands at 38.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.9 times, while the price to sales ratio stands at 3.7 times.
• The company's price to cash flow (P/CF) ratio stood at 23.9 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Dec-21*	12 Dec-22*
Sales per share (Unadj.)	Rs	430.1	523.4
TTM Earnings per share	Rs	42.9	52.5
Diluted earnings per share	Rs	42.9	52.5
Price to Cash Flow	x	21.9	23.9
TTM P/E ratio	x	29.6	38.5
Price / Book Value ratio	x	3.5	4.8
Market Cap	Rs m	35,366	54,486
Dividends per share (Unadj.)	Rs	12.5	15.0

Ratio Analysis for KSB

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.0x during CY22, from 2.1x during CY21. 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 41.0x during CY22, from 40.9x during CY21. 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 16.0% during CY22, from 14.8% during CY22. 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 22.0% during CY22, from 20.4% during CY21. 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 10.3% during CY22, from 9.6% during CY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Dec-21*	12 Dec-22*
Current ratio	x	2.1	2.0
Debtors’ Days	Days	68	81
Interest coverage	x	40.9	41.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	9.6	10.3
Return on equity	%	14.8	16.0
Return on capital employed	%	20.4	22.0

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

KSB Share Price Performance

Over the last one year, KSB share price has moved up from Rs 895.4 to Rs 1,314.6, registering a gain of Rs 419.2 or around 46.8%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 27,506.0 (up 0.2%). Over the last one year it has moved up from 21,095.8 to 27,506.0, a gain of 6,410 points (up 30.4%).

Overall, the S&P BSE SENSEX is up 16.8% over the year.

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