SUNFLAG IRON & STEEL 2022-23 Annual Report Analysis

Fri, 31 Mar

SUNFLAG IRON & STEEL 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.

SUNFLAG IRON & STEEL Income Statement Analysis

• Operating income during the year rose 29.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 312.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 47.0% in FY23 as against 14.7% in FY22.
• Depreciation charges increased by 5.7% and finance costs increased by 92.0% YoY, respectively.
• Other income grew by 16.3% YoY.
• Net profit for the year grew by 413.9% YoY.
• Net profit margins during the year grew from 8.0% in FY22 to 32.0% in FY23.

SUNFLAG IRON & STEEL Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	26,983	34,884	29.3%
Other income	Rs m	61	71	16.3%
Total Revenues	Rs m	27,043	34,955	29.3%
Gross profit	Rs m	3,974	16,396	312.6%
Depreciation	Rs m	763	806	5.7%
Interest	Rs m	423	811	92.0%
Profit before tax	Rs m	2,849	14,849	421.2%
Tax	Rs m	679	3,696	444.4%
Profit after tax	Rs m	2,170	11,153	413.9%
Gross profit margin	%	14.7	47.0
Effective tax rate	%	23.8	24.9
Net profit margin	%	8.0	32.0

RESPONSE PENDING: Your Meeting with Tanushree Banerjee Tomorrow...

SUNFLAG IRON & STEEL Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 9 billion as compared to Rs 9 billion in FY22, thereby witnessing an increase of 0.6%.
• Long-term debt stood at Rs 4 billion as compared to Rs 2 billion during FY22, a growth of 97.5%.
• Current assets rose 3% and stood at Rs 14 billion, while fixed assets rose 104% and stood at Rs 36 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 49 billion as against Rs 31 billion during FY22, thereby witnessing a growth of 60%.

SUNFLAG IRON & STEEL Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	17,490	33,422	91.1
Current Liabilities	Rs m	8,818	8,872	0.6
Long-term Debt	Rs m	1,932	3,816	97.5
Total Liabilities	Rs m	30,908	49,423	59.9
Current assets	Rs m	13,488	13,874	2.9
Fixed Assets	Rs m	17,419	35,550	104.1
Total Assets	Rs m	30,908	49,423	59.9

SUNFLAG IRON & STEEL Cash Flow Statement Analysis

• SUNFLAG IRON & STEEL's cash flow from operating activities (CFO) during FY23 stood at Rs 3 billion, an improvement of 543.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -2 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -633 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -45 million from the Rs -27 million net cash flows seen during FY22.

SUNFLAG IRON & STEEL 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	432	2,778	543.2%
Cash Flow from Investing Activities	Rs m	-3,353	-2,190	-
Cash Flow from Financing Activities	Rs m	2,895	-633	-
Net Cash Flow	Rs m	-27	-45	-

Current Valuations for SUNFLAG IRON & STEEL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 61.9, an improvement from the EPS of Rs 12.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 147.9, stands at 2.4 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 0.8 times.
• The company's price to cash flow (P/CF) ratio stood at 1.7 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	149.7	193.6
TTM Earnings per share	Rs	12.0	61.9
Diluted earnings per share	Rs	12.0	61.9
Price to Cash Flow	x	3.9	1.7
TTM P/E ratio	x	5.2	2.4
Price / Book Value ratio	x	0.8	0.6
Market Cap	Rs m	13,990	20,270
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for SUNFLAG IRON & STEEL

• 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 improved and stood at 19.3x during FY23, from 7.7x 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 33.4% during FY23, from 12.4% 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 42.1% during FY23, from 16.8% 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 improved and stood at 24.2% during FY23, from 8.4% 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	374	330
Interest coverage	x	7.7	19.3
Debt to equity ratio	x	0.1	0.1
Return on assets	%	8.4	24.2
Return on equity	%	12.4	33.4
Return on capital employed	%	16.8	42.1

To see how SUNFLAG IRON & STEEL has performed over the last 5 years, please visit here.

SUNFLAG IRON & STEEL Share Price Performance

Over the last one year, SUNFLAG IRON & STEEL share price has moved up from Rs 63.1 to Rs 147.9, registering a gain of Rs 84.8 or around 134.5%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 19,184.9 (up 0.6%). Over the last one year it has moved down from 22,368.3 to 19,184.9, a loss of 3,183 points (down 14.2%).

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

(To know more, check out historical annual results for SUNFLAG IRON & STEEL and quarterly results for SUNFLAG IRON & STEEL)