NCC 2022-23 Annual Report Analysis

Tue, 15 Aug

NCC 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.

NCC Income Statement Analysis

• Operating income during the year rose 39.6% on a year-on-year (YoY) basis.
• The company's operating profit increased by 18.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 9.4% in FY23 as against 11.0% in FY22.
• Depreciation charges increased by 8.5% and finance costs increased by 7.8% YoY, respectively.
• Other income grew by 108.7% YoY.
• Net profit for the year grew by 30.8% YoY.
• Net profit margins during the year declined from 4.4% in FY22 to 4.2% in FY23.

NCC Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	111,380	155,534	39.6%
Other income	Rs m	707	1,476	108.7%
Total Revenues	Rs m	112,087	157,010	40.1%
Gross profit	Rs m	12,288	14,551	18.4%
Depreciation	Rs m	1,867	2,026	8.5%
Interest	Rs m	4,781	5,152	7.8%
Profit before tax	Rs m	6,347	8,849	39.4%
Tax	Rs m	1,407	2,386	69.7%
Profit after tax	Rs m	4,940	6,462	30.8%
Gross profit margin	%	11.0	9.4
Effective tax rate	%	22.2	27.0
Net profit margin	%	4.4	4.2

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NCC Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 99 billion as compared to Rs 84 billion in FY22, thereby witnessing an increase of 18.3%.
• Long-term debt down at Rs 891 million as compared to Rs 1 billion during FY22, a fall of 25.9%.
• Current assets rose 16% and stood at Rs 132 billion, while fixed assets rose 10% and stood at Rs 32 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 165 billion as against Rs 144 billion during FY22, thereby witnessing a growth of 15%.

NCC Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	55,762	61,668	10.6
Current Liabilities	Rs m	83,581	98,908	18.3
Long-term Debt	Rs m	1,202	891	-25.9
Total Liabilities	Rs m	143,937	164,888	14.6
Current assets	Rs m	114,526	132,457	15.7
Fixed Assets	Rs m	29,411	32,431	10.3
Total Assets	Rs m	143,937	164,888	14.6

NCC Cash Flow Statement Analysis

• NCC's cash flow from operating activities (CFO) during FY23 stood at Rs 11 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -2 billion, an improvement of 190.1% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -9 billion, an improvement of 30% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 159 million from the Rs 749 million net cash flows seen during FY22.

NCC 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	14,156	11,001	-22.3%
Cash Flow from Investing Activities	Rs m	-660	-1,916	-
Cash Flow from Financing Activities	Rs m	-12,746	-8,927	-
Net Cash Flow	Rs m	749	159	-78.8%

Current Valuations for NCC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 10.3, an improvement from the EPS of Rs 8.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 154.8, stands at 14.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.6 times, while the price to sales ratio stands at 0.6 times.
• The company's price to cash flow (P/CF) ratio stood at 5.9 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	182.6	247.7
TTM Earnings per share	Rs	8.1	10.3
Diluted earnings per share	Rs	7.9	10.3
Price to Cash Flow	x	5.4	5.9
TTM P/E ratio	x	7.5	14.2
Price / Book Value ratio	x	0.8	0.8
Market Cap	Rs m	47,034	50,039
Dividends per share (Unadj.)	Rs	2.0	2.2

Ratio Analysis for NCC

• 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 improved and stood at 2.7x 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 10.5% during FY23, from 8.9% 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 22.4% during FY23, from 19.5% 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 7.0% during FY23, from 6.8% 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	8	7
Interest coverage	x	2.3	2.7
Debt to equity ratio	x	0.0	0.0
Return on assets	%	6.8	7.0
Return on equity	%	8.9	10.5
Return on capital employed	%	19.5	22.4

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

NCC Share Price Performance

Over the last one year, NCC share price has moved up from Rs 64.5 to Rs 154.8, registering a gain of Rs 90.3 or around 140.0%.

Meanwhile, the S&P BSE REALTY Index is trading at Rs 4,225.3 (down 0.7%). Over the last one year it has moved up from 3,530.7 to 4,225.3, a gain of 695 points (up 19.7%).

Overall, the S&P BSE SENSEX is up 10.2% over the year.

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