MSP STEEL & POWER 2022-23 Annual Report Analysis

Wed, 7 Feb

MSP STEEL & POWER 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.

MSP STEEL & POWER Income Statement Analysis

• Operating income during the year rose 9.0% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 59.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 2.5% in FY23 as against 6.6% in FY22.
• Depreciation charges decreased by 0.7% and finance costs increased by 4.2% YoY, respectively.
• Other income grew by 242.0% YoY.
• Net profit for the year declined by NA YoY.
• Net profit margins during the year declined from 1.1% in FY22 to 2.0% in FY23.

MSP STEEL & POWER Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	23,396	25,504	9.0%
Other income	Rs m	34	116	242.0%
Total Revenues	Rs m	23,430	25,620	9.3%
Gross profit	Rs m	1,551	625	-59.7%
Depreciation	Rs m	545	541	-0.7%
Interest	Rs m	742	773	4.2%
Profit before tax	Rs m	299	-572	NA
Tax	Rs m	42	-66	NA
Profit after tax	Rs m	257	-506	NA
Gross profit margin	%	6.6	2.5
Effective tax rate	%	14.1	11.5
Net profit margin	%	1.1	-2.0

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MSP STEEL & POWER Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 6 billion as compared to Rs 6 billion in FY22, thereby witnessing an decrease of -5.1%.
• Long-term debt down at Rs 5 billion as compared to Rs 5 billion during FY22, a fall of 4.5%.
• Current assets fell 14% and stood at Rs 7 billion, while fixed assets rose 1% and stood at Rs 9 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 16 billion as against Rs 17 billion during FY22, thereby witnessing a fall of 6%.

MSP STEEL & POWER Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	6,184	5,699	-7.8
Current Liabilities	Rs m	6,053	5,743	-5.1
Long-term Debt	Rs m	5,260	5,021	-4.5
Total Liabilities	Rs m	17,245	16,147	-6.4
Current assets	Rs m	8,494	7,303	-14.0
Fixed Assets	Rs m	8,751	8,843	1.1
Total Assets	Rs m	17,245	16,147	-6.4

MSP STEEL & POWER Cash Flow Statement Analysis

• MSP STEEL & POWER's cash flow from operating activities (CFO) during FY23 stood at Rs 811 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -192 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -992 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -373 million from the Rs 370 million net cash flows seen during FY22.

MSP STEEL & POWER 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	1,101	811	-26.4%
Cash Flow from Investing Activities	Rs m	-621	-192	-
Cash Flow from Financing Activities	Rs m	-109	-992	-
Net Cash Flow	Rs m	370	-373	-

Current Valuations for MSP STEEL & POWER

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -1.3, an decline from the EPS of Rs 0.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 7.9, stands at -5.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.5 times, while the price to sales ratio stands at 0.1 times.
• The company's price to cash flow (P/CF) ratio stood at 130.1 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	60.7	66.2
TTM Earnings per share	Rs	0.7	-1.3
Diluted earnings per share	Rs	0.7	-1.3
Price to Cash Flow	x	5.2	130.1
TTM P/E ratio	x	16.1	-5.6
Price / Book Value ratio	x	0.8	0.8
Market Cap	Rs m	5,057	4,532
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for MSP STEEL & POWER

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.3x 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 0.3x during FY23, from 1.4x 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 -8.9% during FY23, from 4.2% 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 1.9% during FY23, from 9.1% 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 1.7% during FY23, from 5.8% 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	1.4	1.3
Debtors’ Days	Days	110	109
Interest coverage	x	1.4	0.3
Debt to equity ratio	x	0.9	0.9
Return on assets	%	5.8	1.7
Return on equity	%	4.2	-8.9
Return on capital employed	%	9.1	1.9

To see how MSP STEEL & POWER has performed over the last 5 years, please visit here.

MSP STEEL & POWER Share Price Performance

Over the last one year, MSP STEEL & POWER share price has moved down from Rs 10.7 to Rs 7.9, registering a loss of Rs 2.9 or around 26.6%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 19,184.9 (up 0.6%). Over the last one year it has moved down from 22,368.3 to 19,184.9, a loss of 3,183 points (down 14.2%).

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

(To know more, check out historical annual results for MSP STEEL & POWER and quarterly results for MSP STEEL & POWER)