ISGEC HEAVY ENG. 2022-23 Annual Report Analysis

Thu, 15 Feb

ISGEC HEAVY ENG. 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.

ISGEC HEAVY ENG. Income Statement Analysis

• Operating income during the year rose 16.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 41.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 7.4% in FY23 as against 6.1% in FY22.
• Depreciation charges increased by 2.9% and finance costs increased by 3.4% YoY, respectively.
• Other income declined by 4.2% YoY.
• Net profit for the year grew by 78.8% YoY.
• Net profit margins during the year grew from 2.1% in FY22 to 3.2% in FY23.

ISGEC HEAVY ENG. Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	54,993	63,990	16.4%
Other income	Rs m	132	127	-4.2%
Total Revenues	Rs m	55,126	64,117	16.3%
Gross profit	Rs m	3,341	4,724	41.4%
Depreciation	Rs m	1,014	1,043	2.9%
Interest	Rs m	878	908	3.4%
Profit before tax	Rs m	1,581	2,900	83.4%
Tax	Rs m	431	845	96.0%
Profit after tax	Rs m	1,150	2,055	78.8%
Gross profit margin	%	6.1	7.4
Effective tax rate	%	27.3	29.1
Net profit margin	%	2.1	3.2

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ISGEC HEAVY ENG. Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 40 billion as compared to Rs 38 billion in FY22, thereby witnessing an increase of 5.9%.
• Long-term debt down at Rs 4 billion as compared to Rs 5 billion during FY22, a fall of 7.0%.
• Current assets rose 8% and stood at Rs 53 billion, while fixed assets fell 2% and stood at Rs 19 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 72 billion as against Rs 68 billion during FY22, thereby witnessing a growth of 5%.

ISGEC HEAVY ENG. Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	21,209	23,043	8.6
Current Liabilities	Rs m	37,906	40,157	5.9
Long-term Debt	Rs m	4,652	4,329	-7.0
Total Liabilities	Rs m	67,885	71,589	5.5
Current assets	Rs m	48,649	52,684	8.3
Fixed Assets	Rs m	19,236	18,904	-1.7
Total Assets	Rs m	67,885	71,589	5.5

ISGEC HEAVY ENG. Cash Flow Statement Analysis

• ISGEC HEAVY ENG.'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 -584 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -978 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 669 million from the Rs -533 million net cash flows seen during FY22.

ISGEC HEAVY ENG. 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	-703	2,076	-
Cash Flow from Investing Activities	Rs m	-1,414	-584	-
Cash Flow from Financing Activities	Rs m	1,758	-978	-
Net Cash Flow	Rs m	-533	669	-

Current Valuations for ISGEC HEAVY ENG.

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 28.0, an improvement from the EPS of Rs 15.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 435.3, stands at 15.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.4 times, while the price to sales ratio stands at 0.5 times.
• The company's price to cash flow (P/CF) ratio stood at 12.1 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	747.9	870.3
TTM Earnings per share	Rs	15.6	28.0
Diluted earnings per share	Rs	15.6	28.0
Price to Cash Flow	x	17.5	12.1
TTM P/E ratio	x	32.9	15.6
Price / Book Value ratio	x	2.3	1.6
Market Cap	Rs m	49,202	37,480
Dividends per share (Unadj.)	Rs	2.0	3.0

Ratio Analysis for ISGEC HEAVY ENG.

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.3x 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 improved and stood at 4.2x during FY23, from 2.8x 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 8.9% during FY23, from 5.4% 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 13.9% during FY23, from 9.5% 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 4.1% during FY23, from 3.0% 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	1.3	1.3
Debtors’ Days	Days	1,428	1,608
Interest coverage	x	2.8	4.2
Debt to equity ratio	x	0.2	0.2
Return on assets	%	3.0	4.1
Return on equity	%	5.4	8.9
Return on capital employed	%	9.5	13.9

To see how ISGEC HEAVY ENG. has performed over the last 5 years, please visit here.

ISGEC HEAVY ENG. Share Price Performance

Over the last one year, ISGEC HEAVY ENG. share price has moved down from Rs 513.9 to Rs 435.3, registering a loss of Rs 78.7 or around 15.3%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 34,369.7 (up 1.2%). Over the last one year it has moved up from 27,506.0 to 34,369.7, a gain of 6,864 points (up 25.0%).

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

(To know more, check out historical annual results for ISGEC HEAVY ENG. and quarterly results for ISGEC HEAVY ENG.)