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ORIENT ABRASIVES 2022-23 Annual Report Analysis

Mon, 9 Oct

ORIENT ABRASIVES 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.

ORIENT ABRASIVES Income Statement Analysis

• Operating income during the year rose 13.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 51.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 8.6% in FY23 as against 6.4% in FY22.
• Depreciation charges increased by 4.3% and finance costs increased by 30.5% YoY, respectively.
• Other income grew by 33.4% YoY.
• Net profit for the year grew by 107.2% YoY.
• Net profit margins during the year grew from 2.6% in FY22 to 4.7% in FY23.

ORIENT ABRASIVES Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	2,675	3,022	13.0%
Other income	Rs m	59	79	33.4%
Total Revenues	Rs m	2,735	3,101	13.4%
Gross profit	Rs m	172	261	51.3%
Depreciation	Rs m	114	119	4.3%
Interest	Rs m	30	39	30.5%
Profit before tax	Rs m	87	181	108.0%
Tax	Rs m	18	39	111.1%
Profit after tax	Rs m	69	142	107.2%
Gross profit margin	%	6.4	8.6
Effective tax rate	%	21.2	21.5
Net profit margin	%	2.6	4.7

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ORIENT ABRASIVES Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 473 million as compared to Rs 805 million in FY22, thereby witnessing an decrease of -41.3%.
• Long-term debt stood at Rs 55 million as compared to Rs 0 million during FY22, a fall of 0.0%.
• Current assets fell 10% and stood at Rs 2 billion, while fixed assets rose 3% and stood at Rs 2 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 3 billion as against Rs 3 billion during FY22, thereby witnessing a fall of 4%.

ORIENT ABRASIVES Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	2,475	2,603	5.2
Current Liabilities	Rs m	805	473	-41.3
Long-term Debt	Rs m	0	55	0.0
Total Liabilities	Rs m	3,408	3,268	-4.1
Current assets	Rs m	1,907	1,722	-9.7
Fixed Assets	Rs m	1,501	1,546	3.0
Total Assets	Rs m	3,408	3,268	-4.1

ORIENT ABRASIVES Cash Flow Statement Analysis

• ORIENT ABRASIVES's cash flow from operating activities (CFO) during FY23 stood at Rs 438 million, an improvement of 37.4% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -130 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -284 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 24 million from the Rs -2 million net cash flows seen during FY22.

ORIENT ABRASIVES 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	319	438	37.4%
Cash Flow from Investing Activities	Rs m	-342	-130	-
Cash Flow from Financing Activities	Rs m	21	-284	-
Net Cash Flow	Rs m	-2	24	-

Current Valuations for ORIENT ABRASIVES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 1.2, an improvement from the EPS of Rs 0.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 35.5, stands at 29.1 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 1.4 times.
• The company's price to cash flow (P/CF) ratio stood at 13.3 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	22.4	25.3
TTM Earnings per share	Rs	0.6	1.2
Diluted earnings per share	Rs	0.6	1.2
Price to Cash Flow	x	19.3	13.3
TTM P/E ratio	x	51.5	29.1
Price / Book Value ratio	x	1.5	1.3
Market Cap	Rs m	3,616	3,470
Dividends per share (Unadj.)	Rs	0.2	0.3

Ratio Analysis for ORIENT ABRASIVES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.6x during FY23, from 2.4x 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 5.6x during FY23, from 3.9x 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 5.5% during FY23, from 2.8% 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 8.3% during FY23, from 4.7% 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 improved and stood at 5.5% during FY23, from 2.9% 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	2.4	3.6
Debtors’ Days	Days	1,025	884
Interest coverage	x	3.9	5.6
Debt to equity ratio	x	0.0	0.0
Return on assets	%	2.9	5.5
Return on equity	%	2.8	5.5
Return on capital employed	%	4.7	8.3

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

ORIENT ABRASIVES Share Price Performance

Over the last one year, ORIENT ABRASIVES share price has moved up from Rs 32.0 to Rs 35.5, registering a gain of Rs 3.6 or around 11.1%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 22,378.1 (down 1.2%). Over the last one year it has moved up from 19,058.2 to 22,378.1, a gain of 3,320 points (up 17.4%).

Overall, the S&P BSE SENSEX is up 12.5% over the year.

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