PUNJAB CHEMICAL 2022-23 Annual Report Analysis

Tue, 20 Feb

PUNJAB CHEMICAL 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.

PUNJAB CHEMICAL Income Statement Analysis

• Operating income during the year rose 7.8% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 12.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 12.2% in FY23 as against 15.0% in FY22.
• Depreciation charges increased by 14.0% and finance costs increased by 46.1% YoY, respectively.
• Other income grew by 260.2% YoY.
• Net profit for the year declined by 26.8% YoY.
• Net profit margins during the year declined from 8.9% in FY22 to 6.1% in FY23.

PUNJAB CHEMICAL Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	9,335	10,062	7.8%
Other income	Rs m	9	34	260.2%
Total Revenues	Rs m	9,344	10,096	8.0%
Gross profit	Rs m	1,397	1,226	-12.3%
Depreciation	Rs m	167	190	14.0%
Interest	Rs m	123	180	46.1%
Profit before tax	Rs m	1,116	889	-20.4%
Tax	Rs m	282	278	-1.3%
Profit after tax	Rs m	835	611	-26.8%
Gross profit margin	%	15.0	12.2
Effective tax rate	%	25.2	31.3
Net profit margin	%	8.9	6.1

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PUNJAB CHEMICAL Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 3 billion as compared to Rs 3 billion in FY22, thereby witnessing an increase of 10.8%.
• Long-term debt stood at Rs 639 million as compared to Rs 584 million during FY22, a growth of 9.3%.
• Current assets rose 21% and stood at Rs 4 billion, while fixed assets rose 8% and stood at Rs 3 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 7 billion as against Rs 6 billion during FY22, thereby witnessing a growth of 16%.

PUNJAB CHEMICAL Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	2,256	2,806	24.4
Current Liabilities	Rs m	2,825	3,130	10.8
Long-term Debt	Rs m	584	639	9.3
Total Liabilities	Rs m	6,047	6,987	15.5
Current assets	Rs m	3,554	4,300	21.0
Fixed Assets	Rs m	2,493	2,684	7.6
Total Assets	Rs m	6,047	6,987	15.5

PUNJAB CHEMICAL Cash Flow Statement Analysis

• PUNJAB CHEMICAL's cash flow from operating activities (CFO) during FY23 stood at Rs 582 million, an improvement of 69.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -365 million, an improvement of 33.2% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -199 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 3 million from the Rs -31 million net cash flows seen during FY22.

PUNJAB CHEMICAL 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	343	582	69.7%
Cash Flow from Investing Activities	Rs m	-274	-365	-
Cash Flow from Financing Activities	Rs m	-106	-199	-
Net Cash Flow	Rs m	-31	3	-

Current Valuations for PUNJAB CHEMICAL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 49.8, an decline from the EPS of Rs 68.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 828.0, stands at 16.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.6 times, while the price to sales ratio stands at 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 18.3 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	761.4	820.7
TTM Earnings per share	Rs	68.1	49.8
Diluted earnings per share	Rs	68.1	49.8
Price to Cash Flow	x	17.8	18.3
TTM P/E ratio	x	21.4	16.6
Price / Book Value ratio	x	7.5	5.2
Market Cap	Rs m	16,989	14,635
Dividends per share (Unadj.)	Rs	3.0	3.0

Ratio Analysis for PUNJAB CHEMICAL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x during FY23, from 1.3x 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 5.9x during FY23, from 10.0x 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 21.8% during FY23, from 37.0% 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 31.0% during FY23, from 43.6% 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 11.3% during FY23, from 15.8% 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	1.3	1.4
Debtors’ Days	Days	437	520
Interest coverage	x	10.0	5.9
Debt to equity ratio	x	0.3	0.2
Return on assets	%	15.8	11.3
Return on equity	%	37.0	21.8
Return on capital employed	%	43.6	31.0

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

PUNJAB CHEMICAL Share Price Performance

Over the last one year, PUNJAB CHEMICAL share price has moved down from Rs 1,456.9 to Rs 828.0, registering a loss of Rs 629.0 or around 43.2%.

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

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