KSE 2022-23 Annual Report Analysis

Wed, 28 Feb

KSE 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.

KSE Income Statement Analysis

• Operating income during the year fell 3.6% 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 0.1% in FY23 as against 0.5% in FY22.
• Depreciation charges increased by 44.1% and finance costs increased by 6.8% YoY, respectively.
• Other income declined by 7.9% YoY.
• Net profit for the year declined by NA YoY.
• Net profit margins during the year declined from 0.4% in FY22 to 0.1% in FY23.

KSE Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	16,701	16,099	-3.6%
Other income	Rs m	60	55	-7.9%
Total Revenues	Rs m	16,761	16,154	-3.6%
Gross profit	Rs m	83	-20	NA
Depreciation	Rs m	30	44	44.1%
Interest	Rs m	20	21	6.8%
Profit before tax	Rs m	93	-30	NA
Tax	Rs m	27	-6	NA
Profit after tax	Rs m	66	-24	NA
Gross profit margin	%	0.5	-0.1
Effective tax rate	%	29.2	20.3
Net profit margin	%	0.4	-0.1

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KSE Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 404 million as compared to Rs 454 million in FY22, thereby witnessing an decrease of -11.2%.
• Long-term debt stood at Rs 134 million as compared to Rs 123 million during FY22, a growth of 9.4%.
• Current assets fell 10% and stood at Rs 2 billion, while fixed assets rose 24% and stood at Rs 544 million in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 3 billion as against Rs 3 billion during FY22, thereby witnessing a fall of 5%.

KSE Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	2,228	2,141	-3.9
Current Liabilities	Rs m	454	404	-11.2
Long-term Debt	Rs m	123	134	9.4
Total Liabilities	Rs m	2,806	2,679	-4.6
Current assets	Rs m	2,366	2,135	-9.8
Fixed Assets	Rs m	440	544	23.6
Total Assets	Rs m	2,806	2,679	-4.6

KSE Cash Flow Statement Analysis

• KSE's cash flow from operating activities (CFO) during FY23 stood at Rs 343 million, an improvement of 799.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -317 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -83 million, an improvement of 84% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -57 million from the Rs 84 million net cash flows seen during FY22.

KSE 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	38	343	799.3%
Cash Flow from Investing Activities	Rs m	551	-317	-
Cash Flow from Financing Activities	Rs m	-505	-83	-
Net Cash Flow	Rs m	84	-57	-

Current Valuations for KSE

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -7.4, an decline from the EPS of Rs 20.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,631.4, stands at -219.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.4 times, while the price to sales ratio stands at 0.3 times.
• The company's price to cash flow (P/CF) ratio stood at 318.3 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	5,218.9	5,030.9
TTM Earnings per share	Rs	20.5	-7.4
Diluted earnings per share	Rs	20.5	-7.4
Price to Cash Flow	x	70.7	318.3
TTM P/E ratio	x	103.2	-219.2
Price / Book Value ratio	x	3.6	2.9
Market Cap	Rs m	8,012	6,283
Dividends per share (Unadj.)	Rs	20.0	20.0

Ratio Analysis for KSE

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 5.3x during FY23, from 5.2x 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 -0.4x during FY23, from 5.7x 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 -1.1% during FY23, from 2.9% 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 -0.4% during FY23, from 4.8% 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 -0.1% during FY23, from 3.1% 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	5.2	5.3
Debtors’ Days	Days	3	3
Interest coverage	x	5.7	-0.4
Debt to equity ratio	x	0.1	0.1
Return on assets	%	3.1	-0.1
Return on equity	%	2.9	-1.1
Return on capital employed	%	4.8	-0.4

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

KSE Share Price Performance

Over the last one year, KSE share price has moved down from Rs 2,119.5 to Rs 1,631.4, registering a loss of Rs 488.2 or around 23.0%.

Overall, the S&P BSE SENSEX is up 1.8% over the year.

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