NEOGEN CHEMICALS 2022-23 Annual Report Analysis

Wed, 16 Aug

NEOGEN CHEMICALS 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.

NEOGEN CHEMICALS Income Statement Analysis

• Operating income during the year rose 40.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 28.8% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 16.3% in FY23 as against 17.8% in FY22.
• Depreciation charges increased by 38.6% and finance costs increased by 51.7% YoY, respectively.
• Other income grew by 315.9% YoY.
• Net profit for the year grew by 12.0% YoY.
• Net profit margins during the year declined from 9.2% in FY22 to 7.3% in FY23.

NEOGEN CHEMICALS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	4,873	6,862	40.8%
Other income	Rs m	11	45	315.9%
Total Revenues	Rs m	4,883	6,906	41.4%
Gross profit	Rs m	868	1,117	28.8%
Depreciation	Rs m	117	162	38.6%
Interest	Rs m	191	289	51.7%
Profit before tax	Rs m	571	710	24.5%
Tax	Rs m	124	211	69.3%
Profit after tax	Rs m	446	500	12.0%
Gross profit margin	%	17.8	16.3
Effective tax rate	%	21.8	29.6
Net profit margin	%	9.2	7.3

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NEOGEN CHEMICALS Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 4 billion as compared to Rs 2 billion in FY22, thereby witnessing an increase of 87.7%.
• Long-term debt stood at Rs 1 billion as compared to Rs 1 billion during FY22, a growth of 6.2%.
• Current assets rose 33% and stood at Rs 7 billion, while fixed assets rose 30% and stood at Rs 4 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 11 billion as against Rs 8 billion during FY22, thereby witnessing a growth of 32%.

NEOGEN CHEMICALS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	4,392	4,825	9.9
Current Liabilities	Rs m	2,183	4,097	87.7
Long-term Debt	Rs m	1,215	1,291	6.2
Total Liabilities	Rs m	7,994	10,538	31.8
Current assets	Rs m	4,925	6,558	33.2
Fixed Assets	Rs m	3,070	3,980	29.6
Total Assets	Rs m	7,994	10,538	31.8

NEOGEN CHEMICALS Cash Flow Statement Analysis

• NEOGEN CHEMICALS's cash flow from operating activities (CFO) during FY23 stood at Rs -304 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -945 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 1 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -245 million from the Rs 440 million net cash flows seen during FY22.

NEOGEN CHEMICALS 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	14	-304	-
Cash Flow from Investing Activities	Rs m	-1,458	-945	-
Cash Flow from Financing Activities	Rs m	1,884	1,003	-46.8%
Net Cash Flow	Rs m	440	-245	-

Current Valuations for NEOGEN CHEMICALS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 20.0, an improvement from the EPS of Rs 17.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,573.0, stands at 80.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 8.1 times, while the price to sales ratio stands at 5.7 times.
• The company's price to cash flow (P/CF) ratio stood at 55.0 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	195.4	275.1
TTM Earnings per share	Rs	17.9	20.0
Diluted earnings per share	Rs	17.9	20.0
Price to Cash Flow	x	77.3	55.0
TTM P/E ratio	x	97.7	80.8
Price / Book Value ratio	x	7.7	7.5
Market Cap	Rs m	34,010	36,408
Dividends per share (Unadj.)	Rs	2.8	3.0

Ratio Analysis for NEOGEN CHEMICALS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.6x during FY23, from 2.3x 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 deteriorated and stood at 3.5x during FY23, from 4.0x 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 10.4% during FY23, from 10.2% 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 improved and stood at 16.3% during FY23, from 13.6% 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 declined and down at 7.5% during FY23, from 8.0% 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	2.3	1.6
Debtors’ Days	Days	8	9
Interest coverage	x	4.0	3.5
Debt to equity ratio	x	0.3	0.3
Return on assets	%	8.0	7.5
Return on equity	%	10.2	10.4
Return on capital employed	%	13.6	16.3

To see how NEOGEN CHEMICALS has performed over the last 5 years, please visit here.

NEOGEN CHEMICALS Share Price Performance

Over the last one year, NEOGEN CHEMICALS share price has moved up from Rs 1,462.0 to Rs 1,573.0, registering a gain of Rs 111.0 or around 7.6%.

Overall, the S&P BSE SENSEX is up 10.5% over the year.

(To know more, check out historical annual results for NEOGEN CHEMICALS and quarterly results for NEOGEN CHEMICALS)