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PENNAR INDUSTRIES 2022-23 Annual Report Analysis

Fri, 31 Mar

PENNAR INDUSTRIES 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.

PENNAR INDUSTRIES Income Statement Analysis

• Operating income during the year rose 27.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 29.1% YoY during the fiscal. Operating profit margins witnessed a fall and down at 7.6% in FY23 as against 7.6% in FY22.
• Depreciation charges increased by 20.0% and finance costs increased by 16.4% YoY, respectively.
• Other income grew by 96.0% YoY.
• Net profit for the year grew by 80.0% YoY.
• Net profit margins during the year grew from 1.8% in FY22 to 2.6% in FY23.

PENNAR INDUSTRIES Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	22,658	28,946	27.8%
Other income	Rs m	171	334	96.0%
Total Revenues	Rs m	22,828	29,281	28.3%
Gross profit	Rs m	1,714	2,212	29.1%
Depreciation	Rs m	541	650	20.0%
Interest	Rs m	784	912	16.4%
Profit before tax	Rs m	559	984	76.1%
Tax	Rs m	140	230	64.4%
Profit after tax	Rs m	419	754	80.0%
Gross profit margin	%	7.6	7.6
Effective tax rate	%	25.0	23.4
Net profit margin	%	1.8	2.6

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PENNAR INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 14 billion as compared to Rs 12 billion in FY22, thereby witnessing an increase of 11.5%.
• Long-term debt stood at Rs 988 million as compared to Rs 986 million during FY22, a growth of 0.2%.
• Current assets rose 9% and stood at Rs 15 billion, while fixed assets rose 7% and stood at Rs 8 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 23 billion as against Rs 21 billion during FY22, thereby witnessing a growth of 8%.

PENNAR INDUSTRIES Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	7,352	7,780	5.8
Current Liabilities	Rs m	12,274	13,691	11.5
Long-term Debt	Rs m	986	988	0.2
Total Liabilities	Rs m	21,410	23,182	8.3
Current assets	Rs m	13,714	14,985	9.3
Fixed Assets	Rs m	7,696	8,198	6.5
Total Assets	Rs m	21,410	23,182	8.3

PENNAR INDUSTRIES Cash Flow Statement Analysis

• PENNAR INDUSTRIES's cash flow from operating activities (CFO) during FY23 stood at Rs 2 billion, an improvement of 25.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -280 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -1 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 1 billion from the Rs 42 million net cash flows seen during FY22.

PENNAR INDUSTRIES 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	1,949	2,441	25.2%
Cash Flow from Investing Activities	Rs m	-985	-280	-
Cash Flow from Financing Activities	Rs m	-922	-1,126	-
Net Cash Flow	Rs m	42	1,052	2,381.6%

Current Valuations for PENNAR INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 5.6, an improvement from the EPS of Rs 2.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 70.5, stands at 12.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.2 times, while the price to sales ratio stands at 0.3 times.
• The company's price to cash flow (P/CF) ratio stood at 5.4 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	159.4	214.5
TTM Earnings per share	Rs	2.9	5.6
Diluted earnings per share	Rs	3.1	5.6
Price to Cash Flow	x	4.9	5.4
TTM P/E ratio	x	11.1	12.6
Price / Book Value ratio	x	0.6	1.0
Market Cap	Rs m	4,574	7,641
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for PENNAR INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.1x during FY23, from 1.1x 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 2.1x during FY23, from 1.7x 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 improved and stood at 9.7% during FY23, from 5.7% 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 21.6% during FY23, from 16.1% 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 7.2% during FY23, from 5.6% 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	1.1	1.1
Debtors’ Days	Days	685	458
Interest coverage	x	1.7	2.1
Debt to equity ratio	x	0.1	0.1
Return on assets	%	5.6	7.2
Return on equity	%	5.7	9.7
Return on capital employed	%	16.1	21.6

To see how PENNAR INDUSTRIES has performed over the last 5 years, please visit here.

PENNAR INDUSTRIES Share Price Performance

Over the last one year, PENNAR INDUSTRIES share price has moved up from Rs 34.6 to Rs 70.5, registering a gain of Rs 35.9 or around 103.9%.

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 PENNAR INDUSTRIES and quarterly results for PENNAR INDUSTRIES)