MPS 2022-23 Annual Report Analysis

Fri, 21 Jul

MPS 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.

MPS Income Statement Analysis

• Operating income during the year rose 11.6% on a year-on-year (YoY) basis.
• The company's operating profit increased by 23.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 31.0% in FY23 as against 28.1% in FY22.
• Depreciation charges decreased by 6.6% and finance costs decreased by 27.7% YoY, respectively.
• Other income declined by 15.8% YoY.
• Net profit for the year grew by 25.3% YoY.
• Net profit margins during the year grew from 19.4% in FY22 to 21.8% in FY23.

MPS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	4,489	5,010	11.6%
Other income	Rs m	144	121	-15.8%
Total Revenues	Rs m	4,633	5,132	10.8%
Gross profit	Rs m	1,260	1,554	23.4%
Depreciation	Rs m	209	195	-6.6%
Interest	Rs m	15	11	-27.7%
Profit before tax	Rs m	1,180	1,469	24.6%
Tax	Rs m	308	377	22.4%
Profit after tax	Rs m	871	1,092	25.3%
Gross profit margin	%	28.1	31.0
Effective tax rate	%	26.1	25.7
Net profit margin	%	19.4	21.8

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MPS Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 1 billion as compared to Rs 1 billion in FY22, thereby witnessing an decrease of -4.0%.
• Current assets rose 18% and stood at Rs 4 billion, while fixed assets rose 6% and stood at Rs 4 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 8 billion as against Rs 7 billion during FY22, thereby witnessing a growth of 11%.

MPS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	3,669	4,237	15.5
Current Liabilities	Rs m	1,369	1,314	-4.0
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	7,321	8,132	11.1
Current assets	Rs m	3,238	3,814	17.8
Fixed Assets	Rs m	4,083	4,318	5.7
Total Assets	Rs m	7,321	8,132	11.1

MPS Cash Flow Statement Analysis

• MPS's cash flow from operating activities (CFO) during FY23 stood at Rs 1 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -647 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -701 million, an improvement of 39% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -215 million from the Rs 149 million net cash flows seen during FY22.

MPS 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	1,149	1,128	-1.8%
Cash Flow from Investing Activities	Rs m	154	-647	-
Cash Flow from Financing Activities	Rs m	-1,155	-701	-
Net Cash Flow	Rs m	149	-215	-

Current Valuations for MPS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 63.8, an improvement from the EPS of Rs 50.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,175.8, stands at 18.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.7 times, while the price to sales ratio stands at 4.0 times.
• The company's price to cash flow (P/CF) ratio stood at 11.7 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	262.4	292.8
TTM Earnings per share	Rs	50.9	63.8
Diluted earnings per share	Rs	50.9	63.8
Price to Cash Flow	x	9.3	11.7
TTM P/E ratio	x	11.6	18.4
Price / Book Value ratio	x	3.0	3.5
Market Cap	Rs m	10,931	15,004
Dividends per share (Unadj.)	Rs	30.0	20.0

Ratio Analysis for MPS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.9x during FY23, from 2.4x 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 133.6x during FY23, from 78.0x 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 25.8% during FY23, from 23.7% 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 34.9% 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 13.6% during FY23, from 12.1% 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	2.4	2.9
Debtors’ Days	Days	697	631
Interest coverage	x	78.0	133.6
Debt to equity ratio	x	0.0	0.0
Return on assets	%	12.1	13.6
Return on equity	%	23.7	25.8
Return on capital employed	%	32.6	34.9

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

MPS Share Price Performance

Over the last one year, MPS share price has moved up from Rs 749.0 to Rs 1,175.8, registering a gain of Rs 426.8 or around 57.0%.

Overall, the S&P BSE SENSEX is up 20.4% over the year.

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