WELSPUN SPECIALTY 2022-23 Annual Report Analysis

Mon, 19 Feb

WELSPUN SPECIALTY 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.

WELSPUN SPECIALTY Income Statement Analysis

• Operating income during the year rose 155.9% on a year-on-year (YoY) basis.
• The company's operating profit was by NA YoY during the fiscal. Operating profit margins witnessed a fall and down at 4.0% in FY23 as against 11.3% in FY22.
• Depreciation charges increased by 2.9% and finance costs increased by 62.2% YoY, respectively.
• Other income declined by 22.8% YoY.
• Net profit for the year declined by NA YoY.
• Net profit margins during the year grew from 19.9% in FY22 to 3.3% in FY23.

WELSPUN SPECIALTY Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	1,633	4,178	155.9%
Other income	Rs m	191	148	-22.8%
Total Revenues	Rs m	1,824	4,326	137.2%
Gross profit	Rs m	-184	167	NA
Depreciation	Rs m	145	149	2.9%
Interest	Rs m	187	303	62.2%
Profit before tax	Rs m	-324	-137	NA
Tax	Rs m	0	0	0.0
Profit after tax	Rs m	-324	-137	NA
Gross profit margin	%	-11.3	4.0
Effective tax rate	%	0.0	0.0
Net profit margin	%	-19.9	-3.3

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WELSPUN SPECIALTY Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 2 billion as compared to Rs 847 million in FY22, thereby witnessing an increase of 168.4%.
• Long-term debt down at Rs 2 billion as compared to Rs 2 billion during FY22, a fall of 5.6%.
• Current assets rose 75% and stood at Rs 3 billion, while fixed assets fell 5% and stood at Rs 2 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 5 billion as against Rs 4 billion during FY22, thereby witnessing a growth of 28%.

WELSPUN SPECIALTY Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	436	294	-32.7
Current Liabilities	Rs m	847	2,274	168.4
Long-term Debt	Rs m	2,316	2,186	-5.6
Total Liabilities	Rs m	3,725	4,768	28.0
Current assets	Rs m	1,523	2,666	75.1
Fixed Assets	Rs m	2,202	2,102	-4.6
Total Assets	Rs m	3,725	4,768	28.0

WELSPUN SPECIALTY Cash Flow Statement Analysis

• WELSPUN SPECIALTY's cash flow from operating activities (CFO) during FY23 stood at Rs 501 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -50 million, an improvement of 12.0% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -498 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -47 million from the Rs 47 million net cash flows seen during FY22.

WELSPUN SPECIALTY 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	-843	501	-
Cash Flow from Investing Activities	Rs m	-45	-50	-
Cash Flow from Financing Activities	Rs m	935	-498	-
Net Cash Flow	Rs m	47	-47	-

Current Valuations for WELSPUN SPECIALTY

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -0.3, an improvement from the EPS of Rs -0.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 18.0, stands at -69.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 32.4 times, while the price to sales ratio stands at 2.3 times.
• The company's price to cash flow (P/CF) ratio stood at 769.8 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	3.1	7.9
TTM Earnings per share	Rs	-0.6	-0.3
Diluted earnings per share	Rs	-0.6	-0.3
Price to Cash Flow	x	-44.9	769.8
TTM P/E ratio	x	-25.8	-69.3
Price / Book Value ratio	x	22.3	30.7
Market Cap	Rs m	9,714	9,006
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for WELSPUN SPECIALTY

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.2x during FY23, from 1.8x 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 improved and stood at 0.5x during FY23, from -0.7x 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 -46.8% during FY23, from -74.4% 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 6.7% during FY23, from -5.0% 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 3.5% during FY23, from -3.7% 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	1.8	1.2
Debtors’ Days	Days	343	361
Interest coverage	x	-0.7	0.5
Debt to equity ratio	x	5.3	7.4
Return on assets	%	-3.7	3.5
Return on equity	%	-74.4	-46.8
Return on capital employed	%	-5.0	6.7

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

WELSPUN SPECIALTY Share Price Performance

Over the last one year, WELSPUN SPECIALTY share price has moved up from Rs 15.2 to Rs 18.0, registering a gain of Rs 2.8 or around 18.1%.

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 WELSPUN SPECIALTY and quarterly results for WELSPUN SPECIALTY)