NITCO 2022-23 Annual Report Analysis

Fri, 31 Mar

NITCO 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.

NITCO Income Statement Analysis

• Operating income during the year fell 6.6% on a year-on-year (YoY) basis.
• The company's operating profit was by NA YoY during the fiscal. Operating profit margins witnessed a growth and stood at 13.9% in FY23 as against 9.6% in FY22.
• Depreciation charges decreased by 2.5% and finance costs increased by 14.0% YoY, respectively.
• Other income declined by 39.2% YoY.
• Net profit for the year grew by NA YoY.
• Net profit margins during the year declined from 30.7% in FY22 to 39.4% in FY23.

NITCO Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	4,106	3,837	-6.6%
Other income	Rs m	75	45	-39.2%
Total Revenues	Rs m	4,181	3,882	-7.1%
Gross profit	Rs m	-393	-532	NA
Depreciation	Rs m	300	293	-2.5%
Interest	Rs m	643	734	14.0%
Profit before tax	Rs m	-1,261	-1,512	NA
Tax	Rs m	0	0	300.0%
Profit after tax	Rs m	-1,261	-1,513	NA
Gross profit margin	%	-9.6	-13.9
Effective tax rate	%	0.0	0.0
Net profit margin	%	-30.7	-39.4

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NITCO Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 9 billion as compared to Rs 8 billion in FY22, thereby witnessing an increase of 11.7%.
• Long-term debt down at Rs 2 billion as compared to Rs 2 billion during FY22, a fall of 0.0%.
• Current assets fell 7% and stood at Rs 4 billion, while fixed assets fell 6% and stood at Rs 4 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 8 billion as against Rs 9 billion during FY22, thereby witnessing a fall of 6%.

NITCO Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	-1,983	-3,493	NA
Current Liabilities	Rs m	8,371	9,348	11.7
Long-term Debt	Rs m	2,000	2,000	0.0
Total Liabilities	Rs m	8,710	8,179	-6.1
Current assets	Rs m	4,186	3,914	-6.5
Fixed Assets	Rs m	4,215	3,957	-6.1
Total Assets	Rs m	8,710	8,179	-6.1

NITCO Cash Flow Statement Analysis

• NITCO's cash flow from operating activities (CFO) during FY23 stood at Rs 26 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -4 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -34 million, an improvement of 60% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -12 million from the Rs -3 million net cash flows seen during FY22.

NITCO 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	47	26	-45.1%
Cash Flow from Investing Activities	Rs m	37	-4	-
Cash Flow from Financing Activities	Rs m	-87	-34	-
Net Cash Flow	Rs m	-3	-12	-

Current Valuations for NITCO

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -21.0, an decline from the EPS of Rs -17.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 19.3, stands at -0.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at -0.4 times, while the price to sales ratio stands at 0.4 times.
• The company's price to cash flow (P/CF) ratio stood at -1.4 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	57.1	53.4
TTM Earnings per share	Rs	-17.6	-21.0
Diluted earnings per share	Rs	-17.6	-21.0
Price to Cash Flow	x	-1.7	-1.4
TTM P/E ratio	x	-1.3	-0.9
Price / Book Value ratio	x	-1.1	-0.5
Market Cap	Rs m	2,161	1,703
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for NITCO

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.4x during FY23, from 0.5x 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 -1.1x during FY23, from -1.0x 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 declined and down at 43.3% during FY23, from 63.6% 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 52.2% during FY23, from -3,631.7% 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 -9.5% during FY23, from -7.1% 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	0.5	0.4
Debtors’ Days	Days	859	704
Interest coverage	x	-1.0	-1.1
Debt to equity ratio	x	-1.0	-0.6
Return on assets	%	-7.1	-9.5
Return on equity	%	63.6	43.3
Return on capital employed	%	-3,631.7	52.2

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

NITCO Share Price Performance

Over the last one year, NITCO share price has moved down from Rs 23.0 to Rs 19.3, registering a loss of Rs 3.7 or around 16.1%.

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

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