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SWELECT ENERGY SYSTEMS 2022-23 Annual Report Analysis

Mon, 10 Jul

SWELECT ENERGY SYSTEMS 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.

SWELECT ENERGY SYSTEMS Income Statement Analysis

• Operating income during the year rose 3.3% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 11.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 19.7% in FY23 as against 22.8% in FY22.
• Depreciation charges increased by 21.4% and finance costs increased by 39.4% YoY, respectively.
• Other income grew by 17.4% YoY.
• Net profit for the year declined by 38.3% YoY.
• Net profit margins during the year declined from 13.6% in FY22 to 8.1% in FY23.

SWELECT ENERGY SYSTEMS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	3,543	3,660	3.3%
Other income	Rs m	207	244	17.4%
Total Revenues	Rs m	3,750	3,903	4.1%
Gross profit	Rs m	808	719	-11.0%
Depreciation	Rs m	276	334	21.4%
Interest	Rs m	228	317	39.4%
Profit before tax	Rs m	513	311	-39.3%
Tax	Rs m	31	14	-55.4%
Profit after tax	Rs m	482	297	-38.3%
Gross profit margin	%	22.8	19.7
Effective tax rate	%	6.0	4.4
Net profit margin	%	13.6	8.1

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SWELECT ENERGY SYSTEMS Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 4 billion as compared to Rs 4 billion in FY22, thereby witnessing an increase of 4.9%.
• Long-term debt stood at Rs 2 billion as compared to Rs 2 billion during FY22, a growth of 25.3%.
• Current assets rose 1% and stood at Rs 7 billion, while fixed assets rose 11% and stood at Rs 8 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 15 billion as against Rs 14 billion during FY22, thereby witnessing a growth of 6%.

SWELECT ENERGY SYSTEMS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	7,756	7,872	1.5
Current Liabilities	Rs m	4,206	4,411	4.9
Long-term Debt	Rs m	1,853	2,323	25.3
Total Liabilities	Rs m	14,010	14,853	6.0
Current assets	Rs m	7,085	7,177	1.3
Fixed Assets	Rs m	6,926	7,676	10.8
Total Assets	Rs m	14,010	14,853	6.0

SWELECT ENERGY SYSTEMS Cash Flow Statement Analysis

• SWELECT ENERGY SYSTEMS's cash flow from operating activities (CFO) during FY23 stood at Rs 1 billion, an improvement of 35.5% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -3 billion, an improvement of 290.2% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 108 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -1 billion from the Rs 1 billion net cash flows seen during FY22.

SWELECT ENERGY SYSTEMS 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	970	1,315	35.5%
Cash Flow from Investing Activities	Rs m	-728	-2,841	-
Cash Flow from Financing Activities	Rs m	994	108	-89.1%
Net Cash Flow	Rs m	1,236	-1,419	-

Current Valuations for SWELECT ENERGY SYSTEMS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 19.6, an decline from the EPS of Rs 31.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 425.5, stands at 35.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.8 times, while the price to sales ratio stands at 1.8 times.
• The company's price to cash flow (P/CF) ratio stood at 8.8 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	233.7	241.4
TTM Earnings per share	Rs	31.8	19.6
Diluted earnings per share	Rs	31.8	19.6
Price to Cash Flow	x	7.6	8.8
TTM P/E ratio	x	14.0	35.4
Price / Book Value ratio	x	0.6	0.7
Market Cap	Rs m	4,285	5,546
Dividends per share (Unadj.)	Rs	3.0	1.2

Ratio Analysis for SWELECT ENERGY SYSTEMS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.6x during FY23, from 1.7x 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 2.0x during FY23, from 3.3x 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 declined and down at 3.8% during FY23, from 6.2% 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 6.2% during FY23, from 7.7% 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 4.1% during FY23, from 5.1% 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	1.7	1.6
Debtors’ Days	Days	889	668
Interest coverage	x	3.3	2.0
Debt to equity ratio	x	0.2	0.3
Return on assets	%	5.1	4.1
Return on equity	%	6.2	3.8
Return on capital employed	%	7.7	6.2

To see how SWELECT ENERGY SYSTEMS has performed over the last 5 years, please visit here.

SWELECT ENERGY SYSTEMS Share Price Performance

Over the last one year, SWELECT ENERGY SYSTEMS share price has moved up from Rs 334.2 to Rs 425.5, registering a gain of Rs 91.3 or around 27.3%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 40,584.0 (down 0.2%). Over the last one year it has moved up from 27,580.5 to 40,584.0, a gain of 13,004 points (up 47.1%).

Overall, the S&P BSE SENSEX is up 23.0% over the year.

(To know more, check out historical annual results for SWELECT ENERGY SYSTEMS and quarterly results for SWELECT ENERGY SYSTEMS)