POKARNA 2022-23 Annual Report Analysis

Mon, 21 Aug

POKARNA 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.

POKARNA Income Statement Analysis

• Operating income during the year rose 12.0% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 3.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 23.5% in FY23 as against 27.1% in FY22.
• Depreciation charges increased by 8.4% and finance costs increased by 16.6% YoY, respectively.
• Other income grew by 71.3% YoY.
• Net profit for the year declined by 16.0% YoY.
• Net profit margins during the year declined from 12.0% in FY22 to 9.0% in FY23.

POKARNA Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	6,502	7,280	12.0%
Other income	Rs m	66	113	71.3%
Total Revenues	Rs m	6,568	7,393	12.6%
Gross profit	Rs m	1,764	1,710	-3.1%
Depreciation	Rs m	386	418	8.4%
Interest	Rs m	425	496	16.6%
Profit before tax	Rs m	1,019	909	-10.8%
Tax	Rs m	236	251	6.4%
Profit after tax	Rs m	783	658	-16.0%
Gross profit margin	%	27.1	23.5
Effective tax rate	%	23.2	27.6
Net profit margin	%	12.0	9.0

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POKARNA Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 2 billion as compared to Rs 3 billion in FY22, thereby witnessing an decrease of -27.1%.
• Long-term debt down at Rs 3 billion as compared to Rs 4 billion during FY22, a fall of 10.2%.
• Current assets fell 8% and stood at Rs 4 billion, while fixed assets fell 3% and stood at Rs 7 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 11 billion as against Rs 12 billion during FY22, thereby witnessing a fall of 5%.

POKARNA Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	4,429	5,072	14.5
Current Liabilities	Rs m	3,197	2,331	-27.1
Long-term Debt	Rs m	3,845	3,451	-10.2
Total Liabilities	Rs m	11,782	11,196	-5.0
Current assets	Rs m	4,044	3,718	-8.1
Fixed Assets	Rs m	7,737	7,478	-3.3
Total Assets	Rs m	11,782	11,196	-5.0

POKARNA Cash Flow Statement Analysis

• POKARNA's cash flow from operating activities (CFO) during FY23 stood at Rs 1 billion, an improvement of 129.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -316 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 -32 million from the Rs 97 million net cash flows seen during FY22.

POKARNA 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	594	1,365	129.7%
Cash Flow from Investing Activities	Rs m	-2,146	-316	-
Cash Flow from Financing Activities	Rs m	1,607	-1,149	-
Net Cash Flow	Rs m	97	-32	-

Current Valuations for POKARNA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 21.2, an decline from the EPS of Rs 25.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 465.8, stands at 26.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.8 times, while the price to sales ratio stands at 2.0 times.
• The company's price to cash flow (P/CF) ratio stood at 14.4 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	209.7	234.8
TTM Earnings per share	Rs	25.3	21.2
Diluted earnings per share	Rs	25.3	21.2
Price to Cash Flow	x	19.7	14.4
TTM P/E ratio	x	29.5	26.1
Price / Book Value ratio	x	3.7	3.1
Market Cap	Rs m	16,259	15,506
Dividends per share (Unadj.)	Rs	0.6	0.6

Ratio Analysis for POKARNA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.6x 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 2.8x during FY23, from 3.4x 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 13.0% during FY23, from 17.7% 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 declined and down at 16.5% during FY23, from 17.5% 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 10.3% during FY23, from 10.3% 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	1.6
Debtors’ Days	Days	804	548
Interest coverage	x	3.4	2.8
Debt to equity ratio	x	0.9	0.7
Return on assets	%	10.3	10.3
Return on equity	%	17.7	13.0
Return on capital employed	%	17.5	16.5

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

POKARNA Share Price Performance

Over the last one year, POKARNA share price has moved down from Rs 566.4 to Rs 465.8, registering a loss of Rs 100.6 or around 17.8%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 21,223.8 (up 1.0%). Over the last one year it has moved up from 18,882.4 to 21,223.8, a gain of 2,341 points (up 12.4%).

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

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