SIS 2022-23 Annual Report Analysis

Thu, 8 Jun

SIS 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.

SIS Income Statement Analysis

• Operating income during the year rose 12.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 0.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 4.4% in FY23 as against 5.0% in FY22.
• Depreciation charges increased by 20.7% and finance costs increased by 16.8% YoY, respectively.
• Other income declined by 40.9% YoY.
• Net profit for the year grew by 6.3% YoY.
• Net profit margins during the year declined from 3.2% in FY22 to 3.1% in FY23.

SIS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	100,591	113,458	12.8%
Other income	Rs m	554	327	-40.9%
Total Revenues	Rs m	101,145	113,785	12.5%
Gross profit	Rs m	4,984	5,017	0.7%
Depreciation	Rs m	1,116	1,347	20.7%
Interest	Rs m	984	1,149	16.8%
Profit before tax	Rs m	3,439	2,849	-17.1%
Tax	Rs m	179	-616	NA
Profit after tax	Rs m	3,259	3,465	6.3%
Gross profit margin	%	5.0	4.4
Effective tax rate	%	5.2	-21.6
Net profit margin	%	3.2	3.1

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SIS Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 23 billion as compared to Rs 22 billion in FY22, thereby witnessing an increase of 2.3%.
• Long-term debt stood at Rs 8 billion as compared to Rs 6 billion during FY22, a growth of 32.3%.
• Current assets rose 14% and stood at Rs 33 billion, while fixed assets rose 7% and stood at Rs 22 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 55 billion as against Rs 49 billion during FY22, thereby witnessing a growth of 11%.

SIS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	20,487	22,998	12.3
Current Liabilities	Rs m	22,416	22,925	2.3
Long-term Debt	Rs m	6,069	8,032	32.3
Total Liabilities	Rs m	49,318	54,655	10.8
Current assets	Rs m	28,938	32,861	13.6
Fixed Assets	Rs m	20,379	21,791	6.9
Total Assets	Rs m	49,318	54,655	10.8

SIS Cash Flow Statement Analysis

• SIS's cash flow from operating activities (CFO) during FY23 stood at Rs 2 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -1 billion, an improvement of 20.9% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -2 billion, an improvement of 35% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -2 billion from the Rs -2 billion net cash flows seen during FY22.

SIS 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	2,335	1,709	-26.8%
Cash Flow from Investing Activities	Rs m	-1,224	-1,480	-
Cash Flow from Financing Activities	Rs m	-3,511	-2,285	-
Net Cash Flow	Rs m	-2,366	-1,950	-

Current Valuations for SIS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 23.8, an improvement from the EPS of Rs 22.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 405.0, stands at 17.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.6 times, while the price to sales ratio stands at 0.5 times.
• The company's price to cash flow (P/CF) ratio stood at 12.8 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	684.2	778.5
TTM Earnings per share	Rs	22.2	23.8
Diluted earnings per share	Rs	22.4	23.8
Price to Cash Flow	x	16.2	12.8
TTM P/E ratio	x	21.9	17.6
Price / Book Value ratio	x	3.3	2.7
Market Cap	Rs m	66,914	61,607
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for SIS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x during FY23, from 1.3x 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 deteriorated and stood at 3.5x during FY23, from 4.5x 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 15.1% during FY23, from 15.9% 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 12.9% during FY23, from 16.7% 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 declined and down at 8.4% during FY23, from 8.6% 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	1.3	1.4
Debtors’ Days	Days	50	54
Interest coverage	x	4.5	3.5
Debt to equity ratio	x	0.3	0.3
Return on assets	%	8.6	8.4
Return on equity	%	15.9	15.1
Return on capital employed	%	16.7	12.9

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

SIS Share Price Performance

Over the last one year, SIS share price has moved down from Rs 454.4 to Rs 405.0, registering a loss of Rs 49.4 or around 10.9%.

Overall, the S&P BSE SENSEX is up 13.7% over the year.

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