MEGHMANI FINECHEM 2022-23 Annual Report Analysis

Tue, 6 Jun

MEGHMANI FINECHEM 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.

MEGHMANI FINECHEM Income Statement Analysis

• Operating income during the year rose 41.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 35.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 31.5% in FY23 as against 32.9% in FY22.
• Depreciation charges increased by 26.8% and finance costs increased by 37.8% YoY, respectively.
• Other income grew by 11.5% YoY.
• Net profit for the year grew by 39.8% YoY.
• Net profit margins during the year declined from 16.3% in FY22 to 16.1% in FY23.

MEGHMANI FINECHEM Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	15,509	21,884	41.1%
Other income	Rs m	83	93	11.5%
Total Revenues	Rs m	15,593	21,977	40.9%
Gross profit	Rs m	5,095	6,889	35.2%
Depreciation	Rs m	859	1,090	26.8%
Interest	Rs m	485	668	37.8%
Profit before tax	Rs m	3,834	5,225	36.3%
Tax	Rs m	1,306	1,692	29.5%
Profit after tax	Rs m	2,528	3,533	39.8%
Gross profit margin	%	32.9	31.5
Effective tax rate	%	34.1	32.4
Net profit margin	%	16.3	16.1

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MEGHMANI FINECHEM Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 6 billion as compared to Rs 5 billion in FY22, thereby witnessing an increase of 21.7%.
• Long-term debt down at Rs 5 billion as compared to Rs 8 billion during FY22, a fall of 29.1%.
• Current assets fell 6% and stood at Rs 4 billion, while fixed assets rose 20% and stood at Rs 20 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 24 billion as against Rs 21 billion during FY22, thereby witnessing a growth of 15%.

MEGHMANI FINECHEM Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	7,260	10,691	47.3
Current Liabilities	Rs m	5,323	6,477	21.7
Long-term Debt	Rs m	7,681	5,446	-29.1
Total Liabilities	Rs m	21,237	24,322	14.5
Current assets	Rs m	4,469	4,195	-6.1
Fixed Assets	Rs m	16,767	20,127	20.0
Total Assets	Rs m	21,237	24,322	14.5

MEGHMANI FINECHEM Cash Flow Statement Analysis

• MEGHMANI FINECHEM's cash flow from operating activities (CFO) during FY23 stood at Rs 6 billion, an improvement of 120.6% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -4 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -2 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -108 million from the Rs 244 million net cash flows seen during FY22.

MEGHMANI FINECHEM 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	2,838	6,262	120.6%
Cash Flow from Investing Activities	Rs m	-4,546	-4,372	-
Cash Flow from Financing Activities	Rs m	1,952	-1,998	-
Net Cash Flow	Rs m	244	-108	-

Current Valuations for MEGHMANI FINECHEM

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 85.0, an improvement from the EPS of Rs 60.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,029.6, stands at 12.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.0 times, while the price to sales ratio stands at 2.0 times.
• The company's price to cash flow (P/CF) ratio stood at 11.4 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	373.3	526.7
TTM Earnings per share	Rs	60.8	85.0
Diluted earnings per share	Rs	60.8	85.0
Price to Cash Flow	x	11.9	11.4
TTM P/E ratio	x	16.0	12.1
Price / Book Value ratio	x	4.2	4.9
Market Cap	Rs m	30,131	52,918
Dividends per share (Unadj.)	Rs	0.0	5.0

Ratio Analysis for MEGHMANI FINECHEM

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.6x during FY23, from 0.8x 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 8.8x during FY23, from 8.9x 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 33.0% during FY23, from 34.8% 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 36.5% during FY23, from 28.9% 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 17.3% during FY23, from 14.2% 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	0.8	0.6
Debtors’ Days	Days	603	277
Interest coverage	x	8.9	8.8
Debt to equity ratio	x	1.1	0.5
Return on assets	%	14.2	17.3
Return on equity	%	34.8	33.0
Return on capital employed	%	28.9	36.5

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

MEGHMANI FINECHEM Share Price Performance

Over the last one year, MEGHMANI FINECHEM share price has moved down from Rs 1,499.8 to Rs 1,029.6, registering a loss of Rs 470.2 or around 31.4%.

Overall, the S&P BSE SENSEX is up 12.1% over the year.

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