SOBHA 2022-23 Annual Report Analysis

Tue, 18 Jul

SOBHA 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.

SOBHA Income Statement Analysis

• Operating income during the year rose 21.9% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 61.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 10.2% in FY23 as against 32.6% in FY22.
• Depreciation charges decreased by 11.4% and finance costs decreased by 67.7% YoY, respectively.
• Other income grew by 7.8% YoY.
• Net profit for the year declined by 18.5% YoY.
• Net profit margins during the year declined from 4.3% in FY22 to 2.9% in FY23.

SOBHA Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	27,309	33,281	21.9%
Other income	Rs m	907	978	7.8%
Total Revenues	Rs m	28,216	34,259	21.4%
Gross profit	Rs m	8,893	3,402	-61.7%
Depreciation	Rs m	721	639	-11.4%
Interest	Rs m	7,497	2,424	-67.7%
Profit before tax	Rs m	1,582	1,317	-16.7%
Tax	Rs m	413	364	-11.9%
Profit after tax	Rs m	1,169	953	-18.5%
Gross profit margin	%	32.6	10.2
Effective tax rate	%	26.1	27.7
Net profit margin	%	4.3	2.9

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SOBHA Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 92 billion as compared to Rs 81 billion in FY22, thereby witnessing an increase of 13.0%.
• Long-term debt down at Rs 6 billion as compared to Rs 7 billion during FY22, a fall of 23.2%.
• Current assets rose 2% and stood at Rs 101 billion, while fixed assets rose 30% and stood at Rs 21 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 121 billion as against Rs 114 billion during FY22, thereby witnessing a growth of 6%.

SOBHA Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	25,105	23,411	-6.7
Current Liabilities	Rs m	81,353	91,889	13.0
Long-term Debt	Rs m	7,277	5,586	-23.2
Total Liabilities	Rs m	114,081	121,181	6.2
Current assets	Rs m	98,278	100,605	2.4
Fixed Assets	Rs m	15,803	20,576	30.2
Total Assets	Rs m	114,081	121,181	6.2

SOBHA Cash Flow Statement Analysis

• SOBHA's cash flow from operating activities (CFO) during FY23 stood at Rs 12 billion, an improvement of 42.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -3 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -8 billion, an improvement of 14% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 1 billion from the Rs -247 million net cash flows seen during FY22.

SOBHA 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	8,212	11,727	42.8%
Cash Flow from Investing Activities	Rs m	383	-2,764	-
Cash Flow from Financing Activities	Rs m	-8,841	-7,585	-
Net Cash Flow	Rs m	-247	1,377	-

Current Valuations for SOBHA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 10.0, an decline from the EPS of Rs 12.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 557.7, stands at 46.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.3 times, while the price to sales ratio stands at 1.6 times.
• The company's price to cash flow (P/CF) ratio stood at 34.6 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	287.9	350.9
TTM Earnings per share	Rs	12.3	10.0
Diluted earnings per share	Rs	12.3	10.0
Price to Cash Flow	x	35.6	34.6
TTM P/E ratio	x	45.1	46.7
Price / Book Value ratio	x	2.8	2.4
Market Cap	Rs m	69,522	55,124
Dividends per share (Unadj.)	Rs	3.0	3.0

Ratio Analysis for SOBHA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.1x during FY23, from 1.2x 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 1.5x during FY23, from 1.2x 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 declined and down at 4.1% during FY23, from 4.7% 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 28.0% 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 2.8% during FY23, from 7.6% 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	1.2	1.1
Debtors’ Days	Days	47	23
Interest coverage	x	1.2	1.5
Debt to equity ratio	x	0.3	0.2
Return on assets	%	7.6	2.8
Return on equity	%	4.7	4.1
Return on capital employed	%	28.0	12.9

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

SOBHA Share Price Performance

Over the last one year, SOBHA share price has moved down from Rs 628.7 to Rs 557.7, registering a loss of Rs 71.0 or around 11.3%.

Meanwhile, the S&P BSE REALTY Index is trading at Rs 4,281.2 (down 0.9%). Over the last one year it has moved up from 3,386.0 to 4,281.2, a gain of 895 points (up 26.4%).

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

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