SHANTHI GEARS 2022-23 Annual Report Analysis

Wed, 5 Jul

SHANTHI GEARS 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.

SHANTHI GEARS Income Statement Analysis

• Operating income during the year rose 32.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 49.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 20.2% in FY23 as against 17.9% in FY22.
• Depreciation charges increased by 4.9% and finance costs increased by 54.2% YoY, respectively.
• Other income grew by 24.2% YoY.
• Net profit for the year grew by 57.9% YoY.
• Net profit margins during the year grew from 12.6% in FY22 to 15.0% in FY23.

SHANTHI GEARS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	3,371	4,457	32.2%
Other income	Rs m	91	112	24.2%
Total Revenues	Rs m	3,461	4,569	32.0%
Gross profit	Rs m	603	902	49.6%
Depreciation	Rs m	104	109	4.9%
Interest	Rs m	2	4	54.2%
Profit before tax	Rs m	587	902	53.6%
Tax	Rs m	163	231	42.3%
Profit after tax	Rs m	425	671	57.9%
Gross profit margin	%	17.9	20.2
Effective tax rate	%	27.7	25.7
Net profit margin	%	12.6	15.0

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SHANTHI GEARS Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 978 million as compared to Rs 952 million in FY22, thereby witnessing an increase of 2.7%.
• Current assets rose 15% and stood at Rs 3 billion, while fixed assets rose 3% and stood at Rs 1 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 4 billion as against Rs 4 billion during FY22, thereby witnessing a growth of 12%.

SHANTHI GEARS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	2,600	3,024	16.3
Current Liabilities	Rs m	952	978	2.7
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	3,544	3,962	11.8
Current assets	Rs m	2,541	2,932	15.4
Fixed Assets	Rs m	1,003	1,030	2.7
Total Assets	Rs m	3,544	3,962	11.8

SHANTHI GEARS Cash Flow Statement Analysis

• SHANTHI GEARS's cash flow from operating activities (CFO) during FY23 stood at Rs 630 million, an improvement of 79.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -262 million, an improvement of 58.8% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -230 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 138 million from the Rs -7 million net cash flows seen during FY22.

SHANTHI GEARS 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	350	630	79.8%
Cash Flow from Investing Activities	Rs m	-165	-262	-
Cash Flow from Financing Activities	Rs m	-192	-230	-
Net Cash Flow	Rs m	-7	138	-

Current Valuations for SHANTHI GEARS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 8.7, an improvement from the EPS of Rs 5.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 474.6, stands at 54.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 12.0 times, while the price to sales ratio stands at 8.2 times.
• The company's price to cash flow (P/CF) ratio stood at 28.6 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	43.9	58.1
TTM Earnings per share	Rs	5.5	8.7
Diluted earnings per share	Rs	5.5	8.7
Price to Cash Flow	x	26.2	28.6
TTM P/E ratio	x	32.6	54.3
Price / Book Value ratio	x	5.0	7.4
Market Cap	Rs m	12,890	22,286
Dividends per share (Unadj.)	Rs	2.5	5.0

Ratio Analysis for SHANTHI GEARS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.0x during FY23, from 2.7x 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 244.8x during FY23, from 245.7x 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 22.2% during FY23, from 16.3% 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 improved and stood at 30.0% during FY23, from 22.7% 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 17.0% during FY23, from 12.1% 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	2.7	3.0
Debtors’ Days	Days	8	6
Interest coverage	x	245.7	244.8
Debt to equity ratio	x	0.0	0.0
Return on assets	%	12.1	17.0
Return on equity	%	16.3	22.2
Return on capital employed	%	22.7	30.0

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

SHANTHI GEARS Share Price Performance

Over the last one year, SHANTHI GEARS share price has moved up from Rs 226.3 to Rs 474.6, registering a gain of Rs 248.3 or around 109.7%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 40,749.7 (up 0.5%). Over the last one year it has moved up from 26,241.6 to 40,749.7, a gain of 14,508 points (up 55.3%).

Overall, the S&P BSE SENSEX is up 22.9% over the year.

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