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SYNCOM FORMULATIONS 2022-23 Annual Report Analysis

Fri, 31 Mar

SYNCOM FORMULATIONS 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.

SYNCOM FORMULATIONS Income Statement Analysis

• Operating income during the year rose 2.1% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 0.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 8.9% in FY23 as against 9.1% in FY22.
• Depreciation charges increased by 15.0% and finance costs increased by 76.4% YoY, respectively.
• Other income grew by 21.7% YoY.
• Net profit for the year grew by 1.4% YoY.
• Net profit margins during the year declined from 9.0% in FY22 to 8.9% in FY23.

SYNCOM FORMULATIONS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	2,197	2,243	2.1%
Other income	Rs m	120	146	21.7%
Total Revenues	Rs m	2,317	2,389	3.1%
Gross profit	Rs m	201	199	-0.7%
Depreciation	Rs m	39	45	15.0%
Interest	Rs m	19	34	76.4%
Profit before tax	Rs m	262	266	1.5%
Tax	Rs m	64	65	1.8%
Profit after tax	Rs m	198	201	1.4%
Gross profit margin	%	9.1	8.9
Effective tax rate	%	24.4	24.5
Net profit margin	%	9.0	8.9

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SYNCOM FORMULATIONS Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 1 billion as compared to Rs 783 million in FY22, thereby witnessing an increase of 44.6%.
• Current assets rose 30% and stood at Rs 2 billion, while fixed assets rose 16% and stood at Rs 2 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 4 billion as against Rs 3 billion during FY22, thereby witnessing a growth of 23%.

SYNCOM FORMULATIONS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	2,172	2,560	17.9
Current Liabilities	Rs m	783	1,132	44.6
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	3,082	3,778	22.6
Current assets	Rs m	1,398	1,817	30.0
Fixed Assets	Rs m	1,684	1,961	16.4
Total Assets	Rs m	3,082	3,778	22.6

SYNCOM FORMULATIONS Cash Flow Statement Analysis

• SYNCOM FORMULATIONS's cash flow from operating activities (CFO) during FY23 stood at Rs 105 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -450 million, an improvement of 66.0% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 350 million, an improvement of 322% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 6 million from the Rs -25 million net cash flows seen during FY22.

SYNCOM FORMULATIONS 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	163	105	-35.5%
Cash Flow from Investing Activities	Rs m	-271	-450	-
Cash Flow from Financing Activities	Rs m	83	350	322.0%
Net Cash Flow	Rs m	-25	6	-

Current Valuations for SYNCOM FORMULATIONS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.2, an decline from the EPS of Rs 0.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 5.9, stands at 27.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.2 times, while the price to sales ratio stands at 2.5 times.
• The company's price to cash flow (P/CF) ratio stood at 33.5 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	2.5	2.4
TTM Earnings per share	Rs	0.2	0.2
Diluted earnings per share	Rs	0.2	0.2
Price to Cash Flow	x	42.1	33.5
TTM P/E ratio	x	50.5	27.6
Price / Book Value ratio	x	4.5	3.2
Market Cap	Rs m	9,716	8,249
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for SYNCOM FORMULATIONS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.6x 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 deteriorated and stood at 8.8x during FY23, from 14.6x 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 7.8% during FY23, from 9.1% 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 declined and down at 11.7% during FY23, from 12.9% 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 6.2% during FY23, from 7.0% 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	1.6
Debtors’ Days	Days	1,122	1,229
Interest coverage	x	14.6	8.8
Debt to equity ratio	x	0.0	0.0
Return on assets	%	7.0	6.2
Return on equity	%	9.1	7.8
Return on capital employed	%	12.9	11.7

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

SYNCOM FORMULATIONS Share Price Performance

Over the last one year, SYNCOM FORMULATIONS share price has moved down from Rs 10.6 to Rs 5.9, registering a loss of Rs 4.7 or around 44.5%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 21,883.5 (up 0.4%). Over the last one year it has moved down from 24,303.8 to 21,883.5, a loss of 2,420 points (down 10.0%).

Overall, the S&P BSE SENSEX is up 1.8% over the year.

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