SMC GLOBAL 2022-23 Annual Report Analysis

Sun, 11 Jun

SMC GLOBAL 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.

SMC GLOBAL Income Statement Analysis

• Operating income during the year rose 10.0% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 3.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 22.2% in FY23 as against 25.4% in FY22.
• Depreciation charges increased by 12.8% and finance costs increased by 55.4% YoY, respectively.
• Other income declined by 77.9% YoY.
• Net profit for the year declined by 31.0% YoY.
• Net profit margins during the year declined from 15.8% in FY22 to 9.9% in FY23.

SMC GLOBAL Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	11,063	12,167	10.0%
Other income	Rs m	185	41	-77.9%
Total Revenues	Rs m	11,248	12,208	8.5%
Gross profit	Rs m	2,809	2,706	-3.7%
Depreciation	Rs m	201	227	12.8%
Interest	Rs m	579	900	55.4%
Profit before tax	Rs m	2,214	1,620	-26.8%
Tax	Rs m	468	416	-11.2%
Profit after tax	Rs m	1,746	1,204	-31.0%
Gross profit margin	%	25.4	22.2
Effective tax rate	%	21.1	25.7
Net profit margin	%	15.8	9.9

Download Now: 7 Unstoppable Growth Engines of India's $10 Trillion Bull Run...

SMC GLOBAL Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 18 billion as compared to Rs 17 billion in FY22, thereby witnessing an increase of 7.1%.
• Long-term debt stood at Rs 5 billion as compared to Rs 3 billion during FY22, a growth of 82.5%.
• Current assets rose 19% and stood at Rs 30 billion, while fixed assets fell 28% and stood at Rs 3 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 33 billion as against Rs 30 billion during FY22, thereby witnessing a growth of 13%.

SMC GLOBAL Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	9,261	9,327	0.7
Current Liabilities	Rs m	17,265	18,485	7.1
Long-term Debt	Rs m	2,985	5,448	82.5
Total Liabilities	Rs m	29,572	33,274	12.5
Current assets	Rs m	25,378	30,254	19.2
Fixed Assets	Rs m	4,153	2,979	-28.3
Total Assets	Rs m	29,572	33,274	12.5

SMC GLOBAL Cash Flow Statement Analysis

• SMC GLOBAL's cash flow from operating activities (CFO) during FY23 stood at Rs -3 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -308 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 2 billion, an improvement of 332% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -598 million from the Rs 481 million net cash flows seen during FY22.

SMC GLOBAL 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	2,089	-2,652	-
Cash Flow from Investing Activities	Rs m	-625	-308	-
Cash Flow from Financing Activities	Rs m	-999	2,321	-
Net Cash Flow	Rs m	481	-598	-

Current Valuations for SMC GLOBAL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 11.5, an decline from the EPS of Rs 15.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 74.5, stands at 5.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.8 times, while the price to sales ratio stands at 0.6 times.
• The company's price to cash flow (P/CF) ratio stood at 6.0 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	97.8	116.2
TTM Earnings per share	Rs	15.4	11.5
Diluted earnings per share	Rs	16.7	11.5
Price to Cash Flow	x	4.2	6.0
TTM P/E ratio	x	4.7	5.6
Price / Book Value ratio	x	1.0	0.9
Market Cap	Rs m	9,605	8,559
Dividends per share (Unadj.)	Rs	2.4	2.4

Ratio Analysis for SMC GLOBAL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.6x during FY23, from 1.5x 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 2.8x during FY23, from 4.8x 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 declined and down at 12.9% during FY23, from 18.8% 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 17.1% during FY23, from 22.8% 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 6.3% during FY23, from 7.9% 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	1.5	1.6
Debtors’ Days	Days	1,142	1,171
Interest coverage	x	4.8	2.8
Debt to equity ratio	x	0.3	0.6
Return on assets	%	7.9	6.3
Return on equity	%	18.8	12.9
Return on capital employed	%	22.8	17.1

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

SMC GLOBAL Share Price Performance

Over the last one year, SMC GLOBAL share price has moved down from Rs 93.4 to Rs 74.5, registering a loss of Rs 18.9 or around 20.2%.

Overall, the S&P BSE SENSEX is up 14.1% over the year.

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