SKF INDIA 2022-23 Annual Report Analysis

Tue, 18 Jul

SKF INDIA 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.

SKF INDIA Income Statement Analysis

• Operating income during the year rose 17.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 35.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 17.4% in FY23 as against 15.1% in FY22.
• Depreciation charges increased by 17.1% and finance costs decreased by 27.4% YoY, respectively.
• Other income grew by 49.8% YoY.
• Net profit for the year grew by 32.9% YoY.
• Net profit margins during the year grew from 10.8% in FY22 to 12.2% in FY23.

SKF INDIA Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	36,659	43,049	17.4%
Other income	Rs m	346	519	49.8%
Total Revenues	Rs m	37,005	43,568	17.7%
Gross profit	Rs m	5,554	7,495	35.0%
Depreciation	Rs m	571	668	17.1%
Interest	Rs m	21	15	-27.4%
Profit before tax	Rs m	5,308	7,330	38.1%
Tax	Rs m	1,358	2,081	53.2%
Profit after tax	Rs m	3,950	5,249	32.9%
Gross profit margin	%	15.1	17.4
Effective tax rate	%	25.6	28.4
Net profit margin	%	10.8	12.2

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SKF INDIA Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 8 billion as compared to Rs 7 billion in FY22, thereby witnessing an increase of 16.9%.
• Current assets rose 25% and stood at Rs 24 billion, while fixed assets rose 12% and stood at Rs 28 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 52 billion as against Rs 44 billion during FY22, thereby witnessing a growth of 18%.

SKF INDIA Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	18,857	23,414	24.2
Current Liabilities	Rs m	6,808	7,961	16.9
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	44,195	52,026	17.7
Current assets	Rs m	19,547	24,486	25.3
Fixed Assets	Rs m	24,648	27,540	11.7
Total Assets	Rs m	44,195	52,026	17.7

SKF INDIA Cash Flow Statement Analysis

• SKF INDIA's cash flow from operating activities (CFO) during FY23 stood at Rs 7 billion, an improvement of 1,109.0% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -449 million, an improvement of 37.8% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -786 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 6 billion from the Rs -535 million net cash flows seen during FY22.

SKF INDIA 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	571	6,902	1,109.0%
Cash Flow from Investing Activities	Rs m	-326	-449	-
Cash Flow from Financing Activities	Rs m	-780	-786	-
Net Cash Flow	Rs m	-535	5,668	-

Current Valuations for SKF INDIA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 106.3, an improvement from the EPS of Rs 80.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 5,316.9, stands at 50.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 11.2 times, while the price to sales ratio stands at 6.1 times.
• The company's price to cash flow (P/CF) ratio stood at 34.0 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	742.1	871.4
TTM Earnings per share	Rs	80.0	106.3
Diluted earnings per share	Rs	79.9	106.2
Price to Cash Flow	x	38.7	34.0
TTM P/E ratio	x	44.3	50.1
Price / Book Value ratio	x	8.3	8.6
Market Cap	Rs m	156,172	201,435
Dividends per share (Unadj.)	Rs	14.5	40.0

Ratio Analysis for SKF INDIA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.1x during FY23, from 2.9x 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 486.4x during FY23, from 256.2x 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 22.4% during FY23, from 20.9% 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 improved and stood at 31.4% during FY23, from 28.3% 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 10.1% during FY23, from 9.0% 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	2.9	3.1
Debtors’ Days	Days	68	58
Interest coverage	x	256.2	486.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	9.0	10.1
Return on equity	%	20.9	22.4
Return on capital employed	%	28.3	31.4

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

SKF INDIA Share Price Performance

Over the last one year, SKF INDIA share price has moved up from Rs 3,724.8 to Rs 5,316.9, registering a gain of Rs 1,592.1 or around 42.7%.

Overall, the S&P BSE SENSEX is up 25.0% over the year.

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