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RITES 2022-23 Annual Report Analysis

Tue, 22 Aug

RITES 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.

RITES Income Statement Analysis

• Operating income during the year fell 6.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 3.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 33.1% in FY23 as against 30.2% in FY22.
• Depreciation charges increased by 1.6% and finance costs decreased by 2.9% YoY, respectively.
• Other income grew by 21.9% YoY.
• Net profit for the year grew by 6.0% YoY.
• Net profit margins during the year grew from 22.4% in FY22 to 25.3% in FY23.

RITES Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	24,030	22,557	-6.1%
Other income	Rs m	835	1,018	21.9%
Total Revenues	Rs m	24,865	23,574	-5.2%
Gross profit	Rs m	7,245	7,459	3.0%
Depreciation	Rs m	656	667	1.6%
Interest	Rs m	73	70	-2.9%
Profit before tax	Rs m	7,351	7,739	5.3%
Tax	Rs m	1,965	2,030	3.3%
Profit after tax	Rs m	5,386	5,710	6.0%
Gross profit margin	%	30.2	33.1
Effective tax rate	%	26.7	26.2
Net profit margin	%	22.4	25.3

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RITES Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 30 billion as compared to Rs 30 billion in FY22, thereby witnessing an decrease of -2.0%.
• Current assets rose 4% and stood at Rs 48 billion, while fixed assets fell 2% and stood at Rs 11 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 59 billion as against Rs 58 billion during FY22, thereby witnessing a growth of 3%.

RITES Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	24,886	26,038	4.6
Current Liabilities	Rs m	30,132	29,539	-2.0
Long-term Debt	Rs m	170	0	-100.0
Total Liabilities	Rs m	57,906	59,411	2.6
Current assets	Rs m	46,616	48,320	3.7
Fixed Assets	Rs m	11,290	11,091	-1.8
Total Assets	Rs m	57,906	59,411	2.6

RITES Cash Flow Statement Analysis

• RITES's cash flow from operating activities (CFO) during FY23 stood at Rs 6 billion, an improvement of 80.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -150 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -5 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 2 billion from the Rs -47 million net cash flows seen during FY22.

RITES 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	3,096	5,598	80.8%
Cash Flow from Investing Activities	Rs m	530	-150	-
Cash Flow from Financing Activities	Rs m	-4,402	-4,832	-
Net Cash Flow	Rs m	-47	2,395	-

Current Valuations for RITES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 23.8, an improvement from the EPS of Rs 22.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 474.0, stands at 20.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.4 times, while the price to sales ratio stands at 5.0 times.
• The company's price to cash flow (P/CF) ratio stood at 12.4 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	100.0	93.9
TTM Earnings per share	Rs	22.4	23.8
Diluted earnings per share	Rs	22.4	23.8
Price to Cash Flow	x	10.5	12.4
TTM P/E ratio	x	11.7	20.9
Price / Book Value ratio	x	2.7	3.0
Market Cap	Rs m	66,131	79,210
Dividends per share (Unadj.)	Rs	17.0	20.5

Ratio Analysis for RITES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.6x during FY23, from 1.5x 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 110.9x during FY23, from 102.4x 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 improved and stood at 21.9% 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 improved and stood at 30.0% 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 improved and stood at 9.7% during FY23, from 9.4% 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	1.5	1.6
Debtors’ Days	Days	11	15
Interest coverage	x	102.4	110.9
Debt to equity ratio	x	0.0	0.0
Return on assets	%	9.4	9.7
Return on equity	%	21.6	21.9
Return on capital employed	%	29.6	30.0

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

RITES Share Price Performance

Over the last one year, RITES share price has moved up from Rs 280.9 to Rs 474.0, registering a gain of Rs 193.1 or around 68.7%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 44,186.9 (up 1.2%). Over the last one year it has moved up from 31,134.6 to 44,186.9, a gain of 13,052 points (up 41.9%).

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

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