RCF 2022-23 Annual Report Analysis

Wed, 13 Dec

RCF 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.

RCF Income Statement Analysis

• Operating income during the year rose 67.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 42.6% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 7.2% in FY23 as against 8.5% in FY22.
• Depreciation charges increased by 15.6% and finance costs increased by 80.5% YoY, respectively.
• Other income grew by 0.5% YoY.
• Net profit for the year grew by 37.6% YoY.
• Net profit margins during the year declined from 5.5% in FY22 to 4.5% in FY23.

RCF Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	128,122	214,515	67.4%
Other income	Rs m	1,687	1,696	0.5%
Total Revenues	Rs m	129,809	216,211	66.6%
Gross profit	Rs m	10,866	15,500	42.6%
Depreciation	Rs m	1,836	2,121	15.6%
Interest	Rs m	1,299	2,343	80.5%
Profit before tax	Rs m	9,419	12,731	35.2%
Tax	Rs m	2,396	3,068	28.1%
Profit after tax	Rs m	7,024	9,663	37.6%
Gross profit margin	%	8.5	7.2
Effective tax rate	%	25.4	24.1
Net profit margin	%	5.5	4.5

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RCF Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 36 billion as compared to Rs 51 billion in FY22, thereby witnessing an decrease of -29.1%.
• Long-term debt down at Rs 10 billion as compared to Rs 11 billion during FY22, a fall of 7.6%.
• Current assets fell 16% and stood at Rs 56 billion, while fixed assets rose 8% and stood at Rs 41 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 97 billion as against Rs 105 billion during FY22, thereby witnessing a fall of 8%.

RCF Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	38,819	45,901	18.2
Current Liabilities	Rs m	50,521	35,805	-29.1
Long-term Debt	Rs m	11,204	10,350	-7.6
Total Liabilities	Rs m	105,308	97,046	-7.8
Current assets	Rs m	67,599	56,466	-16.5
Fixed Assets	Rs m	37,709	40,580	7.6
Total Assets	Rs m	105,308	97,046	-7.8

RCF Cash Flow Statement Analysis

• RCF's cash flow from operating activities (CFO) during FY23 stood at Rs 8 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -3 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -16 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -11 billion from the Rs -4 billion net cash flows seen during FY22.

RCF 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	-5,921	7,870	-
Cash Flow from Investing Activities	Rs m	-3,787	-3,155	-
Cash Flow from Financing Activities	Rs m	5,993	-15,599	-
Net Cash Flow	Rs m	-3,715	-10,884	-

Current Valuations for RCF

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 17.5, an improvement from the EPS of Rs 12.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 159.1, stands at 16.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.9 times, while the price to sales ratio stands at 0.4 times.
• The company's price to cash flow (P/CF) ratio stood at 5.0 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	232.2	388.8
TTM Earnings per share	Rs	12.7	17.5
Diluted earnings per share	Rs	12.7	17.5
Price to Cash Flow	x	5.6	5.0
TTM P/E ratio	x	7.0	16.4
Price / Book Value ratio	x	1.1	1.3
Market Cap	Rs m	44,438	59,431
Dividends per share (Unadj.)	Rs	3.9	5.3

Ratio Analysis for RCF

• 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 6.4x during FY23, from 8.3x 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 21.1% during FY23, from 18.1% 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 26.8% during FY23, from 21.4% 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 12.4% during FY23, from 7.9% 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	9	4
Interest coverage	x	8.3	6.4
Debt to equity ratio	x	0.3	0.2
Return on assets	%	7.9	12.4
Return on equity	%	18.1	21.1
Return on capital employed	%	21.4	26.8

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

RCF Share Price Performance

Over the last one year, RCF share price has moved up from Rs 133.6 to Rs 159.1, registering a gain of Rs 25.5 or around 19.1%.

Overall, the S&P BSE SENSEX is up 12.0% over the year.

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