MEGHMANI ORGANICS 2022-23 Annual Report Analysis

Mon, 5 Jun

MEGHMANI ORGANICS 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 ORGANICS Income Statement Analysis

• Operating income during the year rose 2.3% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 5.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 14.2% in FY23 as against 15.4% in FY22.
• Depreciation charges increased by 8.7% and finance costs increased by 485.5% YoY, respectively.
• Other income declined by 1.9% YoY.
• Net profit for the year declined by 17.8% YoY.
• Net profit margins during the year declined from 12.2% in FY22 to 9.8% in FY23.

MEGHMANI ORGANICS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	24,985	25,567	2.3%
Other income	Rs m	978	960	-1.9%
Total Revenues	Rs m	25,963	26,527	2.2%
Gross profit	Rs m	3,846	3,640	-5.4%
Depreciation	Rs m	627	681	8.7%
Interest	Rs m	110	644	485.5%
Profit before tax	Rs m	4,088	3,274	-19.9%
Tax	Rs m	1,044	770	-26.2%
Profit after tax	Rs m	3,044	2,504	-17.8%
Gross profit margin	%	15.4	14.2
Effective tax rate	%	25.5	23.5
Net profit margin	%	12.2	9.8

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MEGHMANI ORGANICS Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 10 billion as compared to Rs 10 billion in FY22, thereby witnessing an decrease of -5.7%.
• Long-term debt stood at Rs 3 billion as compared to Rs 2 billion during FY22, a growth of 31.1%.
• Current assets fell 2% and stood at Rs 14 billion, while fixed assets rose 17% and stood at Rs 16 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 30 billion as against Rs 28 billion during FY22, thereby witnessing a growth of 7%.

MEGHMANI ORGANICS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	14,662	16,560	12.9
Current Liabilities	Rs m	10,349	9,763	-5.7
Long-term Debt	Rs m	2,088	2,738	31.1
Total Liabilities	Rs m	27,976	30,008	7.3
Current assets	Rs m	14,369	14,046	-2.2
Fixed Assets	Rs m	13,607	15,962	17.3
Total Assets	Rs m	27,976	30,008	7.3

MEGHMANI ORGANICS Cash Flow Statement Analysis

• MEGHMANI ORGANICS's cash flow from operating activities (CFO) during FY23 stood at Rs 3 billion, an improvement of 306.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -4 billion, an improvement of 167.5% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 1 billion, an improvement of 91% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 185 million from the Rs -102 million net cash flows seen during FY22.

MEGHMANI ORGANICS 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	648	2,637	306.7%
Cash Flow from Investing Activities	Rs m	-1,329	-3,556	-
Cash Flow from Financing Activities	Rs m	577	1,105	91.5%
Net Cash Flow	Rs m	-102	185	-

Current Valuations for MEGHMANI ORGANICS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 9.8, an decline from the EPS of Rs 12.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 86.0, stands at 9.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.3 times, while the price to sales ratio stands at 0.9 times.
• The company's price to cash flow (P/CF) ratio stood at 9.1 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	98.2	100.5
TTM Earnings per share	Rs	12.0	9.8
Diluted earnings per share	Rs	12.0	9.8
Price to Cash Flow	x	7.2	9.1
TTM P/E ratio	x	8.7	9.2
Price / Book Value ratio	x	2.0	1.7
Market Cap	Rs m	29,329	28,961
Dividends per share (Unadj.)	Rs	1.4	1.4

Ratio Analysis for MEGHMANI ORGANICS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x during FY23, from 1.4x 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 deteriorated and stood at 6.1x during FY23, from 38.2x 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 15.1% during FY23, from 20.8% 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 declined and down at 20.3% during FY23, from 25.1% 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 10.5% during FY23, from 11.3% 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	1.4	1.4
Debtors’ Days	Days	793	772
Interest coverage	x	38.2	6.1
Debt to equity ratio	x	0.1	0.2
Return on assets	%	11.3	10.5
Return on equity	%	20.8	15.1
Return on capital employed	%	25.1	20.3

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

MEGHMANI ORGANICS Share Price Performance

Over the last one year, MEGHMANI ORGANICS share price has moved down from Rs 133.2 to Rs 86.0, registering a loss of Rs 47.2 or around 35.5%.

Overall, the S&P BSE SENSEX is up 13.5% over the year.

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