VEDANTA 2022-23 Annual Report Analysis

Tue, 20 Jun

VEDANTA 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.

VEDANTA Income Statement Analysis

• Operating income during the year fell 48.7% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 68.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 20.3% in FY23 as against 33.2% in FY22.
• Depreciation charges decreased by 58.8% and finance costs decreased by 8.6% YoY, respectively.
• Other income grew by 717.8% YoY.
• Net profit for the year grew by 15.4% YoY.
• Net profit margins during the year grew from 17.9% in FY22 to 40.2% in FY23.

VEDANTA Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	1,327,320	680,800	-48.7%
Other income	Rs m	26,000	212,620	717.8%
Total Revenues	Rs m	1,353,320	893,420	-34.0%
Gross profit	Rs m	440,560	137,930	-68.7%
Depreciation	Rs m	88,950	36,610	-58.8%
Interest	Rs m	47,970	43,840	-8.6%
Profit before tax	Rs m	329,640	270,100	-18.1%
Tax	Rs m	92,550	-3,460	NA
Profit after tax	Rs m	237,090	273,560	15.4%
Gross profit margin	%	33.2	20.3
Effective tax rate	%	28.1	-1.3
Net profit margin	%	17.9	40.2

Download Now: 7 Unstoppable Growth Engines of India's $10 Trillion Bull Run...

VEDANTA Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 546 billion as compared to Rs 657 billion in FY22, thereby witnessing an decrease of -17.0%.
• Long-term debt down at Rs 326 billion as compared to Rs 362 billion during FY22, a fall of 9.9%.
• Current assets fell 52% and stood at Rs 331 billion, while fixed assets fell 4% and stood at Rs 1,204 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 1,535 billion as against Rs 1,935 billion during FY22, thereby witnessing a fall of 21%.

VEDANTA Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	652,470	676,430	3.7
Current Liabilities	Rs m	657,130	545,570	-17.0
Long-term Debt	Rs m	362,050	326,060	-9.9
Total Liabilities	Rs m	1,935,150	1,534,880	-20.7
Current assets	Rs m	685,750	331,010	-51.7
Fixed Assets	Rs m	1,249,400	1,203,870	-3.6
Total Assets	Rs m	1,935,150	1,534,880	-20.7

VEDANTA Cash Flow Statement Analysis

• VEDANTA's cash flow from operating activities (CFO) during FY23 stood at Rs 125 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs 163 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -292 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -4 billion from the Rs 38 billion net cash flows seen during FY22.

VEDANTA 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	349,630	124,910	-64.3%
Cash Flow from Investing Activities	Rs m	-22,530	163,120	-
Cash Flow from Financing Activities	Rs m	-289,030	-291,740	-
Net Cash Flow	Rs m	38,170	-3,710	-

Current Valuations for VEDANTA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 73.5, an improvement from the EPS of Rs 63.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 283.0, stands at 7.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.6 times, while the price to sales ratio stands at 1.5 times.
• The company's price to cash flow (P/CF) ratio stood at 3.9 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	356.8	183.0
TTM Earnings per share	Rs	63.7	73.5
Diluted earnings per share	Rs	63.8	73.6
Price to Cash Flow	x	4.6	3.9
TTM P/E ratio	x	6.3	7.3
Price / Book Value ratio	x	1.8	1.8
Market Cap	Rs m	1,167,336	1,203,141
Dividends per share (Unadj.)	Rs	45.0	101.5

Ratio Analysis for VEDANTA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.6x during FY23, from 1.0x 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 7.2x during FY23, from 7.9x 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 40.4% during FY23, from 36.3% 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 31.3% during FY23, from 37.2% 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 20.7% during FY23, from 14.7% 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	1.0	0.6
Debtors’ Days	Days	1	1
Interest coverage	x	7.9	7.2
Debt to equity ratio	x	0.6	0.5
Return on assets	%	14.7	20.7
Return on equity	%	36.3	40.4
Return on capital employed	%	37.2	31.3

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

VEDANTA Share Price Performance

Over the last one year, VEDANTA share price has moved up from Rs 230.3 to Rs 283.0, registering a gain of Rs 52.7 or around 22.9%.

Overall, the S&P BSE SENSEX is up 22.4% over the year.

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