RAMA STEEL TUBES 2022-23 Annual Report Analysis

Mon, 19 Feb

RAMA STEEL TUBES 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.

RAMA STEEL TUBES Income Statement Analysis

• Operating income during the year rose 74.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 26.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 4.0% in FY23 as against 5.5% in FY22.
• Depreciation charges increased by 10.6% and finance costs increased by 85.5% YoY, respectively.
• Other income declined by 25.9% YoY.
• Net profit for the year grew by 0.4% YoY.
• Net profit margins during the year declined from 3.6% in FY22 to 2.1% in FY23.

RAMA STEEL TUBES Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	7,682	13,368	74.0%
Other income	Rs m	92	68	-25.9%
Total Revenues	Rs m	7,774	13,436	72.8%
Gross profit	Rs m	419	531	26.7%
Depreciation	Rs m	43	47	10.6%
Interest	Rs m	109	202	85.5%
Profit before tax	Rs m	359	350	-2.7%
Tax	Rs m	86	75	-12.8%
Profit after tax	Rs m	273	274	0.4%
Gross profit margin	%	5.5	4.0
Effective tax rate	%	24.0	21.5
Net profit margin	%	3.6	2.1

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RAMA STEEL TUBES Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 4 billion as compared to Rs 2 billion in FY22, thereby witnessing an increase of 99.8%.
• Long-term debt stood at Rs 320 million as compared to Rs 318 million during FY22, a growth of 0.7%.
• Current assets rose 96% and stood at Rs 5 billion, while fixed assets rose 84% and stood at Rs 2 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 7 billion as against Rs 4 billion during FY22, thereby witnessing a growth of 93%.

RAMA STEEL TUBES Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	1,267	2,255	78.1
Current Liabilities	Rs m	2,010	4,015	99.8
Long-term Debt	Rs m	318	320	0.7
Total Liabilities	Rs m	3,610	6,977	93.3
Current assets	Rs m	2,754	5,409	96.4
Fixed Assets	Rs m	852	1,564	83.6
Total Assets	Rs m	3,610	6,977	93.3

RAMA STEEL TUBES Cash Flow Statement Analysis

• RAMA STEEL TUBES's cash flow from operating activities (CFO) during FY23 stood at Rs -962 million, an improvement of 174.9% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -532 million, an improvement of 476.2% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 1 billion, an improvement of 251% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -61 million from the Rs -34 million net cash flows seen during FY22.

RAMA STEEL TUBES 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	-350	-962	-
Cash Flow from Investing Activities	Rs m	-92	-532	-
Cash Flow from Financing Activities	Rs m	408	1,433	250.7%
Net Cash Flow	Rs m	-34	-61	-

Current Valuations for RAMA STEEL TUBES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.6, an decline from the EPS of Rs 16.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 27.8, stands at 52.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.3 times, while the price to sales ratio stands at 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 152.6 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	457.5	28.7
TTM Earnings per share	Rs	16.3	0.6
Diluted earnings per share	Rs	0.5	0.5
Price to Cash Flow	x	101.8	152.6
TTM P/E ratio	x	115.6	52.3
Price / Book Value ratio	x	0.7	21.8
Market Cap	Rs m	877	49,086
Dividends per share (Unadj.)	Rs	0.1	0.0

Ratio Analysis for RAMA STEEL TUBES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.3x 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 deteriorated and stood at 2.7x during FY23, from 4.3x 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 declined and down at 12.2% during FY23, from 21.6% 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 21.4% during FY23, from 29.6% 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 6.8% during FY23, from 10.6% 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	1.4	1.3
Debtors’ Days	Days	502	635
Interest coverage	x	4.3	2.7
Debt to equity ratio	x	0.3	0.1
Return on assets	%	10.6	6.8
Return on equity	%	21.6	12.2
Return on capital employed	%	29.6	21.4

To see how RAMA STEEL TUBES has performed over the last 5 years, please visit here.

RAMA STEEL TUBES Share Price Performance

Over the last one year, RAMA STEEL TUBES share price has moved down from Rs 63.1 to Rs 27.8, registering a loss of Rs 35.3 or around 55.9%.

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 RAMA STEEL TUBES and quarterly results for RAMA STEEL TUBES)