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RAJAPALAYAM MILLS 2022-23 Annual Report Analysis

Wed, 2 Aug

RAJAPALAYAM MILLS 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.

RAJAPALAYAM MILLS Income Statement Analysis

• Operating income during the year rose 25.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 3.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 16.6% in FY23 as against 20.3% in FY22.
• Depreciation charges increased by 12.2% and finance costs increased by 28.2% YoY, respectively.
• Other income declined by 34.9% YoY.
• Net profit for the year grew by 68.6% YoY.
• Net profit margins during the year grew from 2.8% in FY22 to 3.8% in FY23.

RAJAPALAYAM MILLS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	6,660	8,379	25.8%
Other income	Rs m	156	102	-34.9%
Total Revenues	Rs m	6,816	8,481	24.4%
Gross profit	Rs m	1,350	1,392	3.1%
Depreciation	Rs m	505	566	12.2%
Interest	Rs m	430	551	28.2%
Profit before tax	Rs m	572	377	-34.2%
Tax	Rs m	384	59	-84.6%
Profit after tax	Rs m	188	318	68.6%
Gross profit margin	%	20.3	16.6
Effective tax rate	%	67.1	15.7
Net profit margin	%	2.8	3.8

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RAJAPALAYAM MILLS Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 7 billion as compared to Rs 5 billion in FY22, thereby witnessing an increase of 36.3%.
• Long-term debt stood at Rs 5 billion as compared to Rs 3 billion during FY22, a growth of 54.4%.
• Current assets rose 44% and stood at Rs 6 billion, while fixed assets rose 11% and stood at Rs 29 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 35 billion as against Rs 30 billion during FY22, thereby witnessing a growth of 16%.

RAJAPALAYAM MILLS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	21,255	22,417	5.5
Current Liabilities	Rs m	5,110	6,968	36.3
Long-term Debt	Rs m	3,116	4,811	54.4
Total Liabilities	Rs m	29,974	34,733	15.9
Current assets	Rs m	4,079	5,870	43.9
Fixed Assets	Rs m	25,896	28,863	11.5
Total Assets	Rs m	29,974	34,733	15.9

RAJAPALAYAM MILLS Cash Flow Statement Analysis

• RAJAPALAYAM MILLS's cash flow from operating activities (CFO) during FY23 stood at Rs -456 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -3 billion, an improvement of 99.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 3 billion, an improvement of 134% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -4 million from the Rs 10 million net cash flows seen during FY22.

RAJAPALAYAM MILLS 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	37	-456	-
Cash Flow from Investing Activities	Rs m	-1,520	-3,035	-
Cash Flow from Financing Activities	Rs m	1,493	3,488	133.6%
Net Cash Flow	Rs m	10	-4	-

Current Valuations for RAJAPALAYAM MILLS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 34.5, an improvement from the EPS of Rs 21.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 810.0, stands at 23.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.3 times, while the price to sales ratio stands at 0.9 times.
• The company's price to cash flow (P/CF) ratio stood at 8.2 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	775.4	910.8
TTM Earnings per share	Rs	21.9	34.5
Diluted earnings per share	Rs	20.4	34.4
Price to Cash Flow	x	12.0	8.2
TTM P/E ratio	x	44.1	23.5
Price / Book Value ratio	x	0.4	0.3
Market Cap	Rs m	8,796	7,230
Dividends per share (Unadj.)	Rs	1.0	1.0

Ratio Analysis for RAJAPALAYAM MILLS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.8x during FY23, from 0.8x 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 1.7x during FY23, from 2.3x 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 1.4% during FY23, from 0.9% 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 declined and down at 3.4% during FY23, from 4.1% 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 2.5% during FY23, from 2.1% 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	0.8	0.8
Debtors’ Days	Days	566	693
Interest coverage	x	2.3	1.7
Debt to equity ratio	x	0.1	0.2
Return on assets	%	2.1	2.5
Return on equity	%	0.9	1.4
Return on capital employed	%	4.1	3.4

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

RAJAPALAYAM MILLS Share Price Performance

Over the last one year, RAJAPALAYAM MILLS share price has moved down from Rs 888.1 to Rs 810.0, registering a loss of Rs 78.1 or around 8.8%.

Overall, the S&P BSE SENSEX is up 13.2% over the year.

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