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PARAG MILK FOODS 2022-23 Annual Report Analysis

Tue, 26 Sep

PARAG MILK FOODS 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.

PARAG MILK FOODS Income Statement Analysis

• Operating income during the year rose 39.6% on a year-on-year (YoY) basis.
• The company's operating profit was by NA YoY during the fiscal. Operating profit margins witnessed a fall and down at 4.1% in FY23 as against 21.2% in FY22.
• Depreciation charges increased by 6.6% and finance costs increased by 8.2% YoY, respectively.
• Other income grew by 114.6% YoY.
• Net profit for the year declined by NA YoY.
• Net profit margins during the year grew from 25.7% in FY22 to 1.8% in FY23.

PARAG MILK FOODS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	20,718	28,926	39.6%
Other income	Rs m	210	452	114.6%
Total Revenues	Rs m	20,928	29,378	40.4%
Gross profit	Rs m	-4,384	1,183	NA
Depreciation	Rs m	537	573	6.6%
Interest	Rs m	510	552	8.2%
Profit before tax	Rs m	-5,221	511	NA
Tax	Rs m	104	-22	NA
Profit after tax	Rs m	-5,325	533	NA
Gross profit margin	%	-21.2	4.1
Effective tax rate	%	-2.0	-4.3
Net profit margin	%	-25.7	1.8

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PARAG MILK FOODS Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 6 billion as compared to Rs 6 billion in FY22, thereby witnessing an increase of 4.5%.
• Long-term debt down at Rs 3 billion as compared to Rs 3 billion during FY22, a fall of 1.7%.
• Current assets rose 24% and stood at Rs 11 billion, while fixed assets rose 11% and stood at Rs 5 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 17 billion as against Rs 14 billion during FY22, thereby witnessing a growth of 20%.

PARAG MILK FOODS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	5,515	8,032	45.6
Current Liabilities	Rs m	5,633	5,884	4.5
Long-term Debt	Rs m	2,596	2,552	-1.7
Total Liabilities	Rs m	13,950	16,676	19.5
Current assets	Rs m	9,081	11,288	24.3
Fixed Assets	Rs m	4,869	5,388	10.7
Total Assets	Rs m	13,950	16,676	19.5

PARAG MILK FOODS Cash Flow Statement Analysis

• PARAG MILK FOODS's cash flow from operating activities (CFO) during FY23 stood at Rs 564 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -896 million, an improvement of 355.4% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 4 billion, an improvement of 82% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 4 billion from the Rs 727 million net cash flows seen during FY22.

PARAG MILK FOODS 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	-1,490	564	-
Cash Flow from Investing Activities	Rs m	-197	-896	-
Cash Flow from Financing Activities	Rs m	2,414	4,387	81.7%
Net Cash Flow	Rs m	727	4,055	457.6%

Current Valuations for PARAG MILK FOODS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 4.5, an improvement from the EPS of Rs -55.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 198.0, stands at 36.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.9 times, while the price to sales ratio stands at 0.8 times.
• The company's price to cash flow (P/CF) ratio stood at 10.5 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	217.6	246.8
TTM Earnings per share	Rs	-55.9	4.5
Diluted earnings per share	Rs	-45.4	4.5
Price to Cash Flow	x	-2.4	10.5
TTM P/E ratio	x	-2.1	36.1
Price / Book Value ratio	x	2.2	1.4
Market Cap	Rs m	12,083	11,559
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for PARAG MILK FOODS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.9x during FY23, from 1.6x 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 1.9x during FY23, from -9.2x 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 6.6% during FY23, from -96.5% 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 10.0% during FY23, from -58.1% 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 improved and stood at 6.5% during FY23, from -34.5% 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	1.6	1.9
Debtors’ Days	Days	22	21
Interest coverage	x	-9.2	1.9
Debt to equity ratio	x	0.5	0.3
Return on assets	%	-34.5	6.5
Return on equity	%	-96.5	6.6
Return on capital employed	%	-58.1	10.0

To see how PARAG MILK FOODS has performed over the last 5 years, please visit here.

PARAG MILK FOODS Share Price Performance

Over the last one year, PARAG MILK FOODS share price has moved up from Rs 111.3 to Rs 198.0, registering a gain of Rs 86.7 or around 77.9%.

Overall, the S&P BSE SENSEX is up 11.6% over the year.

(To know more, check out historical annual results for PARAG MILK FOODS and quarterly results for PARAG MILK FOODS)