RHI MAGNESITA 2022-23 Annual Report Analysis

Fri, 31 Mar

RHI MAGNESITA 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.

RHI MAGNESITA Income Statement Analysis

• Operating income during the year rose 36.4% 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 11.0% in FY23 as against 19.4% in FY22.
• Depreciation charges increased by 109.6% and finance costs increased by 840.3% YoY, respectively.
• Other income grew by 125.0% YoY.
• Net profit for the year declined by NA YoY.
• Net profit margins during the year declined from 13.5% in FY22 to 17.1% in FY23.

RHI MAGNESITA Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	19,994	27,263	36.4%
Other income	Rs m	70	157	125.0%
Total Revenues	Rs m	20,063	27,420	36.7%
Gross profit	Rs m	3,886	-3,009	NA
Depreciation	Rs m	338	709	109.6%
Interest	Rs m	43	402	840.3%
Profit before tax	Rs m	3,575	-3,963	NA
Tax	Rs m	885	694	-21.6%
Profit after tax	Rs m	2,690	-4,657	NA
Gross profit margin	%	19.4	-11.0
Effective tax rate	%	24.8	-17.5
Net profit margin	%	13.5	-17.1

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RHI MAGNESITA Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 25 billion as compared to Rs 10 billion in FY22, thereby witnessing an increase of 160.8%.
• Long-term debt stood at Rs 2 billion as compared to Rs 334 million during FY22, a growth of 623.9%.
• Current assets rose 50% and stood at Rs 26 billion, while fixed assets rose 1,040% and stood at Rs 38 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 63 billion as against Rs 20 billion during FY22, thereby witnessing a growth of 212%.

RHI MAGNESITA Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	10,287	28,910	181.0
Current Liabilities	Rs m	9,693	25,282	160.8
Long-term Debt	Rs m	334	2,419	623.9
Total Liabilities	Rs m	20,325	63,379	211.8
Current assets	Rs m	17,009	25,569	50.3
Fixed Assets	Rs m	3,316	37,810	1,040.4
Total Assets	Rs m	20,325	63,379	211.8

RHI MAGNESITA Cash Flow Statement Analysis

• RHI MAGNESITA's cash flow from operating activities (CFO) during FY23 stood at Rs 2 billion, an improvement of 774.0% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -12 billion, an improvement of 1,545.0% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 12 billion, an improvement of 2,431% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 3 billion from the Rs -929 million net cash flows seen during FY22.

RHI MAGNESITA 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	273	2,383	774.0%
Cash Flow from Investing Activities	Rs m	-699	-11,500	-
Cash Flow from Financing Activities	Rs m	-503	11,719	-
Net Cash Flow	Rs m	-929	2,602	-

Current Valuations for RHI MAGNESITA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -24.8, an decline from the EPS of Rs 16.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 629.7, stands at -27.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.5 times, while the price to sales ratio stands at 4.3 times.
• The company's price to cash flow (P/CF) ratio stood at -32.2 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	124.2	145.0
TTM Earnings per share	Rs	16.7	-24.8
Diluted earnings per share	Rs	13.0	-22.5
Price to Cash Flow	x	41.8	-32.2
TTM P/E ratio	x	47.0	-27.9
Price / Book Value ratio	x	6.8	4.4
Market Cap	Rs m	70,037	127,302
Dividends per share (Unadj.)	Rs	2.5	2.5

Ratio Analysis for RHI MAGNESITA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.0x during FY23, from 1.8x 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 -8.9x during FY23, from 84.7x 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 -16.1% during FY23, from 26.1% 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 -11.4% during FY23, from 34.1% 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 -6.7% during FY23, from 13.4% 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	1.8	1.0
Debtors’ Days	Days	893	1,054
Interest coverage	x	84.7	-8.9
Debt to equity ratio	x	0.0	0.1
Return on assets	%	13.4	-6.7
Return on equity	%	26.1	-16.1
Return on capital employed	%	34.1	-11.4

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

RHI MAGNESITA Share Price Performance

Over the last one year, RHI MAGNESITA share price has moved up from Rs 612.7 to Rs 629.7, registering a gain of Rs 17.0 or around 2.8%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 19,184.9 (up 0.6%). Over the last one year it has moved down from 22,368.3 to 19,184.9, a loss of 3,183 points (down 14.2%).

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

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