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M.M.FORGINGS 2022-23 Annual Report Analysis

Wed, 11 Oct

M.M.FORGINGS 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.

M.M.FORGINGS Income Statement Analysis

• Operating income during the year rose 28.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 30.1% YoY during the fiscal. Operating profit margins witnessed a fall and down at 18.7% in FY23 as against 18.4% in FY22.
• Depreciation charges increased by 16.3% and finance costs increased by 6.6% YoY, respectively.
• Other income declined by 15.4% YoY.
• Net profit for the year grew by 40.6% YoY.
• Net profit margins during the year grew from 8.0% in FY22 to 8.8% in FY23.

M.M.FORGINGS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	11,396	14,619	28.3%
Other income	Rs m	142	120	-15.4%
Total Revenues	Rs m	11,539	14,739	27.7%
Gross profit	Rs m	2,101	2,733	30.1%
Depreciation	Rs m	678	788	16.3%
Interest	Rs m	277	296	6.6%
Profit before tax	Rs m	1,289	1,769	37.3%
Tax	Rs m	379	490	29.4%
Profit after tax	Rs m	910	1,279	40.6%
Gross profit margin	%	18.4	18.7
Effective tax rate	%	29.4	27.7
Net profit margin	%	8.0	8.8

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M.M.FORGINGS 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 31.9%.
• Long-term debt down at Rs 3 billion as compared to Rs 4 billion during FY22, a fall of 5.1%.
• Current assets rose 20% and stood at Rs 7 billion, while fixed assets rose 16% and stood at Rs 9 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 17 billion as against Rs 14 billion during FY22, thereby witnessing a growth of 17%.

M.M.FORGINGS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	5,596	6,730	20.3
Current Liabilities	Rs m	4,694	6,192	31.9
Long-term Debt	Rs m	3,500	3,322	-5.1
Total Liabilities	Rs m	14,142	16,601	17.4
Current assets	Rs m	6,188	7,398	19.6
Fixed Assets	Rs m	7,954	9,203	15.7
Total Assets	Rs m	14,142	16,601	17.4

M.M.FORGINGS Cash Flow Statement Analysis

• M.M.FORGINGS's cash flow from operating activities (CFO) during FY23 stood at Rs 2 billion, an improvement of 12.5% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -2 billion, an improvement of 49.1% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 100 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -80 million from the Rs 390 million net cash flows seen during FY22.

M.M.FORGINGS 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	1,504	1,692	12.5%
Cash Flow from Investing Activities	Rs m	-1,256	-1,872	-
Cash Flow from Financing Activities	Rs m	141	100	-29.4%
Net Cash Flow	Rs m	390	-80	-

Current Valuations for M.M.FORGINGS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 53.0, an improvement from the EPS of Rs 37.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 870.6, stands at 16.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.1 times, while the price to sales ratio stands at 1.4 times.
• The company's price to cash flow (P/CF) ratio stood at 10.4 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	472.1	605.6
TTM Earnings per share	Rs	37.7	53.0
Diluted earnings per share	Rs	37.7	53.0
Price to Cash Flow	x	12.9	10.4
TTM P/E ratio	x	23.8	16.4
Price / Book Value ratio	x	3.0	3.2
Market Cap	Rs m	16,951	21,587
Dividends per share (Unadj.)	Rs	6.0	6.0

Ratio Analysis for M.M.FORGINGS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.2x during FY23, from 1.3x 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 improved and stood at 7.0x during FY23, from 5.6x 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 19.0% during FY23, from 16.3% 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 20.5% during FY23, from 17.2% 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 9.5% during FY23, from 8.4% 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	1.3	1.2
Debtors’ Days	Days	502	491
Interest coverage	x	5.6	7.0
Debt to equity ratio	x	0.6	0.5
Return on assets	%	8.4	9.5
Return on equity	%	16.3	19.0
Return on capital employed	%	17.2	20.5

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

M.M.FORGINGS Share Price Performance

Over the last one year, M.M.FORGINGS share price has moved up from Rs 815.6 to Rs 870.6, registering a gain of Rs 55.1 or around 6.8%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 23,059.1 (up 0.4%). Over the last one year it has moved up from 18,477.6 to 23,059.1, a gain of 4,581 points (up 24.8%).

Overall, the S&P BSE SENSEX is up 14.6% over the year.

(To know more, check out historical annual results for M.M.FORGINGS and quarterly results for M.M.FORGINGS)