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WELSPUN ENTERPRISES 2022-23 Annual Report Analysis

Fri, 31 Mar

WELSPUN ENTERPRISES 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.

WELSPUN ENTERPRISES Income Statement Analysis

• Operating income during the year rose 105.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 395.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 26.5% in FY23 as against 11.0% in FY22.
• Depreciation charges decreased by 17.8% and finance costs increased by 43.3% YoY, respectively.
• Other income grew by 151.6% YoY.
• Net profit for the year grew by 757.7% YoY.
• Net profit margins during the year grew from 5.9% in FY22 to 24.8% in FY23.

WELSPUN ENTERPRISES Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	13,423	27,582	105.5%
Other income	Rs m	570	1,435	151.6%
Total Revenues	Rs m	13,994	29,016	107.4%
Gross profit	Rs m	1,472	7,298	395.7%
Depreciation	Rs m	159	131	-17.8%
Interest	Rs m	829	1,188	43.3%
Profit before tax	Rs m	1,054	7,414	603.4%
Tax	Rs m	256	570	122.6%
Profit after tax	Rs m	798	6,844	757.7%
Gross profit margin	%	11.0	26.5
Effective tax rate	%	24.3	7.7
Net profit margin	%	5.9	24.8

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WELSPUN ENTERPRISES Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 20 billion as compared to Rs 15 billion in FY22, thereby witnessing an increase of 31.7%.
• Long-term debt down at Rs 3 billion as compared to Rs 23 billion during FY22, a fall of 87.5%.
• Current assets rose 122% and stood at Rs 36 billion, while fixed assets fell 71% and stood at Rs 12 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 51 billion as against Rs 59 billion during FY22, thereby witnessing a fall of 13%.

WELSPUN ENTERPRISES Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	17,812	23,529	32.1
Current Liabilities	Rs m	15,494	20,399	31.7
Long-term Debt	Rs m	23,027	2,869	-87.5
Total Liabilities	Rs m	58,881	51,003	-13.4
Current assets	Rs m	16,170	35,954	122.4
Fixed Assets	Rs m	42,464	12,274	-71.1
Total Assets	Rs m	58,881	51,003	-13.4

WELSPUN ENTERPRISES Cash Flow Statement Analysis

• WELSPUN ENTERPRISES's cash flow from operating activities (CFO) during FY23 stood at Rs 3 billion, an improvement of 20.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs 13 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 13 billion from the Rs -753 million net cash flows seen during FY22.

WELSPUN ENTERPRISES 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	2,871	3,447	20.1%
Cash Flow from Investing Activities	Rs m	-4,871	12,886	-
Cash Flow from Financing Activities	Rs m	1,247	-2,037	-
Net Cash Flow	Rs m	-753	13,378	-

Current Valuations for WELSPUN ENTERPRISES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 45.6, an improvement from the EPS of Rs 5.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 125.7, stands at 2.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.7 times, while the price to sales ratio stands at 0.7 times.
• The company's price to cash flow (P/CF) ratio stood at 2.6 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	89.6	183.9
TTM Earnings per share	Rs	5.3	45.6
Diluted earnings per share	Rs	5.8	49.4
Price to Cash Flow	x	10.5	2.6
TTM P/E ratio	x	10.9	2.5
Price / Book Value ratio	x	0.9	0.8
Market Cap	Rs m	15,225	18,283
Dividends per share (Unadj.)	Rs	1.5	8.5

Ratio Analysis for WELSPUN ENTERPRISES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.8x during FY23, from 1.0x 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 7.2x during FY23, from 2.3x 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 29.1% during FY23, from 4.5% 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 32.6% during FY23, from 4.6% 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 15.7% during FY23, from 2.8% 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	1.0	1.8
Debtors’ Days	Days	4	4
Interest coverage	x	2.3	7.2
Debt to equity ratio	x	1.3	0.1
Return on assets	%	2.8	15.7
Return on equity	%	4.5	29.1
Return on capital employed	%	4.6	32.6

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

WELSPUN ENTERPRISES Share Price Performance

Over the last one year, WELSPUN ENTERPRISES share price has moved up from Rs 73.0 to Rs 125.7, registering a gain of Rs 52.7 or around 72.2%.

Meanwhile, the S&P BSE REALTY Index is trading at Rs 3,101.6 (up 1.6%). Over the last one year it has moved down from 3,681.8 to 3,101.6, a loss of 580 points (down 15.8%).

Overall, the S&P BSE SENSEX is up 1.8% over the year.

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