PATEL ENGINEERING 2022-23 Annual Report Analysis

Mon, 21 Aug

PATEL ENGINEERING 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.

PATEL ENGINEERING Income Statement Analysis

• Operating income during the year rose 18.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 25.5% YoY during the fiscal. Operating profit margins witnessed a fall and down at 15.5% in FY23 as against 14.6% in FY22.
• Depreciation charges increased by 13.9% and finance costs decreased by 0.3% YoY, respectively.
• Other income grew by 3.6% YoY.
• Net profit for the year grew by 159.6% YoY.
• Net profit margins during the year grew from 2.0% in FY22 to 4.4% in FY23.

PATEL ENGINEERING Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	33,974	40,276	18.5%
Other income	Rs m	1,162	1,204	3.6%
Total Revenues	Rs m	35,137	41,479	18.1%
Gross profit	Rs m	4,972	6,241	25.5%
Depreciation	Rs m	819	933	13.9%
Interest	Rs m	4,195	4,184	-0.3%
Profit before tax	Rs m	1,120	2,327	107.7%
Tax	Rs m	431	539	24.9%
Profit after tax	Rs m	689	1,788	159.6%
Gross profit margin	%	14.6	15.5
Effective tax rate	%	38.5	23.2
Net profit margin	%	2.0	4.4

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PATEL ENGINEERING Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 38 billion as compared to Rs 38 billion in FY22, thereby witnessing an decrease of -0.3%.
• Long-term debt down at Rs 5 billion as compared to Rs 8 billion during FY22, a fall of 29.6%.
• Current assets rose 2% and stood at Rs 54 billion, while fixed assets rose 5% and stood at Rs 30 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 85 billion as against Rs 83 billion during FY22, thereby witnessing a growth of 3%.

PATEL ENGINEERING Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	23,837	28,880	21.2
Current Liabilities	Rs m	38,033	37,922	-0.3
Long-term Debt	Rs m	7,607	5,355	-29.6
Total Liabilities	Rs m	83,150	85,436	2.7
Current assets	Rs m	53,585	54,437	1.6
Fixed Assets	Rs m	28,959	30,293	4.6
Total Assets	Rs m	83,150	85,436	2.7

PATEL ENGINEERING Cash Flow Statement Analysis

• PATEL ENGINEERING's cash flow from operating activities (CFO) during FY23 stood at Rs 7 billion, an improvement of 34.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -2 billion, an improvement of 80.1% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -5 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -602 million from the Rs 538 million net cash flows seen during FY22.

PATEL ENGINEERING 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	5,142	6,926	34.7%
Cash Flow from Investing Activities	Rs m	-1,207	-2,173	-
Cash Flow from Financing Activities	Rs m	-3,398	-5,355	-
Net Cash Flow	Rs m	538	-602	-

Current Valuations for PATEL ENGINEERING

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 2.3, an improvement from the EPS of Rs 1.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 57.4, stands at 23.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.5 times, while the price to sales ratio stands at 1.1 times.
• The company's price to cash flow (P/CF) ratio stood at 6.0 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	70.9	52.1
TTM Earnings per share	Rs	1.4	2.3
Diluted earnings per share	Rs	0.9	2.3
Price to Cash Flow	x	12.7	6.0
TTM P/E ratio	x	27.8	23.3
Price / Book Value ratio	x	0.5	0.6
Market Cap	Rs m	11,013	16,459
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for PATEL ENGINEERING

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x 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 1.6x during FY23, from 1.3x 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 6.2% during FY23, from 2.9% 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 19.0% during FY23, from 16.9% 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 5.9% 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	1.4	1.4
Debtors’ Days	Days	60	48
Interest coverage	x	1.3	1.6
Debt to equity ratio	x	0.3	0.2
Return on assets	%	5.9	7.0
Return on equity	%	2.9	6.2
Return on capital employed	%	16.9	19.0

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

PATEL ENGINEERING Share Price Performance

Over the last one year, PATEL ENGINEERING share price has moved up from Rs 28.6 to Rs 57.4, registering a gain of Rs 28.9 or around 101.1%.

Meanwhile, the S&P BSE REALTY Index is trading at Rs 4,258.5 (up 0.4%). Over the last one year it has moved up from 3,587.7 to 4,258.5, a gain of 671 points (up 18.7%).

Overall, the S&P BSE SENSEX is up 8.2% over the year.

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