HONDA POWER PRODUCTS 2022-23 Annual Report Analysis

Sun, 2 Jul

HONDA POWER PRODUCTS 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.

HONDA POWER PRODUCTS Income Statement Analysis

• Operating income during the year rose 7.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 14.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 9.4% in FY23 as against 8.9% in FY22.
• Depreciation charges increased by 12.2% and finance costs decreased by 30.1% YoY, respectively.
• Other income grew by 13.8% YoY.
• Net profit for the year grew by 14.2% YoY.
• Net profit margins during the year grew from 6.4% in FY22 to 6.8% in FY23.

HONDA POWER PRODUCTS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	11,563	12,463	7.8%
Other income	Rs m	168	192	13.8%
Total Revenues	Rs m	11,731	12,655	7.9%
Gross profit	Rs m	1,027	1,177	14.6%
Depreciation	Rs m	185	208	12.2%
Interest	Rs m	9	7	-30.1%
Profit before tax	Rs m	1,001	1,154	15.3%
Tax	Rs m	255	303	18.7%
Profit after tax	Rs m	745	851	14.2%
Gross profit margin	%	8.9	9.4
Effective tax rate	%	25.5	26.3
Net profit margin	%	6.4	6.8

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HONDA POWER PRODUCTS Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 2 billion as compared to Rs 2 billion in FY22, thereby witnessing an increase of 0.9%.
• Current assets rose 20% and stood at Rs 7 billion, while fixed assets fell 28% and stood at Rs 2 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 9 billion as against Rs 9 billion during FY22, thereby witnessing a growth of 7%.

HONDA POWER PRODUCTS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	6,699	7,367	10.0
Current Liabilities	Rs m	1,897	1,914	0.9
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	8,543	9,156	7.2
Current assets	Rs m	6,238	7,495	20.2
Fixed Assets	Rs m	2,305	1,661	-28.0
Total Assets	Rs m	8,543	9,156	7.2

HONDA POWER PRODUCTS Cash Flow Statement Analysis

• HONDA POWER PRODUCTS's cash flow from operating activities (CFO) during FY23 stood at Rs 2 billion, an improvement of 326.4% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -1 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -162 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -72 million from the Rs 416 million net cash flows seen during FY22.

HONDA POWER PRODUCTS 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	369	1,573	326.4%
Cash Flow from Investing Activities	Rs m	161	-1,499	-
Cash Flow from Financing Activities	Rs m	-113	-162	-
Net Cash Flow	Rs m	416	-72	-

Current Valuations for HONDA POWER PRODUCTS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 83.9, an improvement from the EPS of Rs 73.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,226.9, stands at 26.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.1 times, while the price to sales ratio stands at 1.8 times.
• The company's price to cash flow (P/CF) ratio stood at 19.8 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	1,140.3	1,229.1
TTM Earnings per share	Rs	73.5	83.9
Diluted earnings per share	Rs	73.5	83.9
Price to Cash Flow	x	13.4	19.8
TTM P/E ratio	x	16.8	26.5
Price / Book Value ratio	x	1.8	2.8
Market Cap	Rs m	12,171	20,922
Dividends per share (Unadj.)	Rs	15.0	16.5

Ratio Analysis for HONDA POWER PRODUCTS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.9x during FY23, from 3.3x 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 178.5x during FY23, from 108.6x 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 improved and stood at 11.5% during FY23, from 11.1% 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 improved and stood at 15.8% during FY23, from 15.1% 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 9.4% during FY23, from 8.8% 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	3.3	3.9
Debtors’ Days	Days	275	207
Interest coverage	x	108.6	178.5
Debt to equity ratio	x	0.0	0.0
Return on assets	%	8.8	9.4
Return on equity	%	11.1	11.5
Return on capital employed	%	15.1	15.8

To see how HONDA POWER PRODUCTS has performed over the last 5 years, please visit here.

HONDA POWER PRODUCTS Share Price Performance

Over the last one year, HONDA POWER PRODUCTS share price has moved up from Rs 1,506.6 to Rs 2,226.9, registering a gain of Rs 720.4 or around 47.8%.

Meanwhile, the S&P BSE CONSUMER DURABLES Index is trading at Rs 42,861.1 (up 0.5%). Over the last one year it has moved up from 34,866.3 to 42,861.1, a gain of 7,995 points (up 22.9%).

Overall, the S&P BSE SENSEX is up 21.7% over the year.

(To know more, check out historical annual results for HONDA POWER PRODUCTS and quarterly results for HONDA POWER PRODUCTS)