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KITEX GARMENTS 2022-23 Annual Report Analysis

Mon, 9 Oct

KITEX GARMENTS 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.

KITEX GARMENTS Income Statement Analysis

• Operating income during the year fell 29.3% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 64.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 10.9% in FY23 as against 21.7% in FY22.
• Depreciation charges decreased by 1.1% and finance costs increased by 23.6% YoY, respectively.
• Other income grew by 63.8% YoY.
• Net profit for the year declined by 54.5% YoY.
• Net profit margins during the year declined from 15.9% in FY22 to 10.2% in FY23.

KITEX GARMENTS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	7,883	5,570	-29.3%
Other income	Rs m	269	441	63.8%
Total Revenues	Rs m	8,152	6,011	-26.3%
Gross profit	Rs m	1,707	609	-64.3%
Depreciation	Rs m	214	212	-1.1%
Interest	Rs m	36	45	23.6%
Profit before tax	Rs m	1,726	793	-54.1%
Tax	Rs m	475	223	-52.9%
Profit after tax	Rs m	1,251	569	-54.5%
Gross profit margin	%	21.7	10.9
Effective tax rate	%	27.5	28.2
Net profit margin	%	15.9	10.2

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KITEX GARMENTS Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 2 billion as compared to Rs 2 billion in FY22, thereby witnessing an decrease of -29.7%.
• Current assets fell 29% and stood at Rs 5 billion, while fixed assets rose 114% and stood at Rs 7 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 12 billion as against Rs 11 billion during FY22, thereby witnessing a growth of 14%.

KITEX GARMENTS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	8,122	8,583	5.7
Current Liabilities	Rs m	2,251	1,582	-29.7
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	10,561	12,008	13.7
Current assets	Rs m	7,416	5,283	-28.8
Fixed Assets	Rs m	3,145	6,725	113.8
Total Assets	Rs m	10,561	12,008	13.7

KITEX GARMENTS Cash Flow Statement Analysis

• KITEX GARMENTS's cash flow from operating activities (CFO) during FY23 stood at Rs 3 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -4 billion, an improvement of 760.8% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 570 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -623 million from the Rs 35 million net cash flows seen during FY22.

KITEX GARMENTS 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	-99	2,953	-
Cash Flow from Investing Activities	Rs m	-481	-4,139	-
Cash Flow from Financing Activities	Rs m	599	570	-4.8%
Net Cash Flow	Rs m	35	-623	-

Current Valuations for KITEX GARMENTS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 8.6, an decline from the EPS of Rs 18.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 198.3, stands at 46.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.5 times, while the price to sales ratio stands at 2.4 times.
• The company's price to cash flow (P/CF) ratio stood at 18.9 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	118.5	83.8
TTM Earnings per share	Rs	18.8	8.6
Diluted earnings per share	Rs	18.8	8.6
Price to Cash Flow	x	11.3	18.9
TTM P/E ratio	x	13.3	46.5
Price / Book Value ratio	x	1.5	1.7
Market Cap	Rs m	12,495	14,776
Dividends per share (Unadj.)	Rs	1.5	1.5

Ratio Analysis for KITEX GARMENTS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.3x during FY23, from 3.3x 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 18.7x during FY23, from 48.7x 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 6.6% during FY23, from 15.4% 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 declined and down at 9.8% during FY23, from 21.7% 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 5.1% during FY23, from 12.2% 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	3.3	3.3
Debtors’ Days	Days	1,455	1,333
Interest coverage	x	48.7	18.7
Debt to equity ratio	x	0.0	0.0
Return on assets	%	12.2	5.1
Return on equity	%	15.4	6.6
Return on capital employed	%	21.7	9.8

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

KITEX GARMENTS Share Price Performance

Over the last one year, KITEX GARMENTS share price has moved down from Rs 216.0 to Rs 198.3, registering a loss of Rs 17.7 or around 8.2%.

Overall, the S&P BSE SENSEX is up 12.5% over the year.

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