L&T TECHONOLOGY 2022-23 Annual Report Analysis

Tue, 27 Jun

L&T TECHONOLOGY 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.

L&T TECHONOLOGY Income Statement Analysis

• Operating income during the year rose 22.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 22.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 21.2% in FY23 as against 21.0% in FY22.
• Depreciation charges increased by 8.0% and finance costs decreased by 0.5% YoY, respectively.
• Other income grew by 20.2% YoY.
• Net profit for the year grew by 22.2% YoY.
• Net profit margins during the year grew from 14.6% in FY22 to 14.7% in FY23.

L&T TECHONOLOGY Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	65,697	80,136	22.0%
Other income	Rs m	1,852	2,227	20.2%
Total Revenues	Rs m	67,549	82,363	21.9%
Gross profit	Rs m	13,821	16,960	22.7%
Depreciation	Rs m	2,144	2,315	8.0%
Interest	Rs m	437	435	-0.5%
Profit before tax	Rs m	13,092	16,437	25.5%
Tax	Rs m	3,486	4,696	34.7%
Profit after tax	Rs m	9,606	11,741	22.2%
Gross profit margin	%	21.0	21.2
Effective tax rate	%	26.6	28.6
Net profit margin	%	14.6	14.7

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L&T TECHONOLOGY Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 15 billion as compared to Rs 14 billion in FY22, thereby witnessing an increase of 10.2%.
• Current assets rose 19% and stood at Rs 51 billion, while fixed assets rose 1% and stood at Rs 18 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 69 billion as against Rs 61 billion during FY22, thereby witnessing a growth of 14%.

L&T TECHONOLOGY Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	41,438	48,571	17.2
Current Liabilities	Rs m	13,733	15,139	10.2
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	60,772	69,035	13.6
Current assets	Rs m	43,251	51,410	18.9
Fixed Assets	Rs m	17,521	17,625	0.6
Total Assets	Rs m	60,772	69,035	13.6

L&T TECHONOLOGY Cash Flow Statement Analysis

• L&T TECHONOLOGY's cash flow from operating activities (CFO) during FY23 stood at Rs 13 billion, an improvement of 29.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -6 billion, an improvement of 27.5% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -4 billion, an improvement of 11% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 3 billion from the Rs 597 million net cash flows seen during FY22.

L&T TECHONOLOGY 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	10,062	13,051	29.7%
Cash Flow from Investing Activities	Rs m	-4,483	-5,718	-
Cash Flow from Financing Activities	Rs m	-4,982	-4,435	-
Net Cash Flow	Rs m	597	2,898	385.4%

Current Valuations for L&T TECHONOLOGY

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 111.2, an improvement from the EPS of Rs 91.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 3,790.0, stands at 34.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 8.2 times, while the price to sales ratio stands at 5.0 times.
• The company's price to cash flow (P/CF) ratio stood at 30.9 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	622.5	758.8
TTM Earnings per share	Rs	91.0	111.2
Diluted earnings per share	Rs	90.9	111.1
Price to Cash Flow	x	45.9	30.9
TTM P/E ratio	x	56.1	34.1
Price / Book Value ratio	x	10.7	8.9
Market Cap	Rs m	445,056	433,946
Dividends per share (Unadj.)	Rs	35.0	45.0

Ratio Analysis for L&T TECHONOLOGY

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.4x during FY23, from 3.1x 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 38.8x during FY23, from 31.0x 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 24.2% during FY23, from 23.2% 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 34.7% during FY23, from 32.6% 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 17.6% during FY23, from 16.5% 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	3.1	3.4
Debtors’ Days	Days	94	79
Interest coverage	x	31.0	38.8
Debt to equity ratio	x	0.0	0.0
Return on assets	%	16.5	17.6
Return on equity	%	23.2	24.2
Return on capital employed	%	32.6	34.7

To see how L&T TECHONOLOGY has performed over the last 5 years, please visit here.

L&T TECHONOLOGY Share Price Performance

Over the last one year, L&T TECHONOLOGY share price has moved up from Rs 3,128.5 to Rs 3,790.0, registering a gain of Rs 661.6 or around 21.1%.

Meanwhile, the S&P BSE IT Index is trading at Rs 28,949.8 (up 0.2%). Over the last one year it has moved up from 28,715.2 to 28,949.8, a gain of 235 points (up 0.8%).

Overall, the S&P BSE SENSEX is up 20.8% over the year.

(To know more, check out historical annual results for L&T TECHONOLOGY and quarterly results for L&T TECHONOLOGY)