SOLAR INDUSTRIES 2022-23 Annual Report Analysis

Wed, 31 May

SOLAR INDUSTRIES 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.

SOLAR INDUSTRIES Income Statement Analysis

• Operating income during the year rose 75.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 75.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 18.6% in FY23 as against 18.6% in FY22.
• Depreciation charges increased by 17.4% and finance costs increased by 79.9% YoY, respectively.
• Other income declined by 2.6% YoY.
• Net profit for the year grew by 78.1% YoY.
• Net profit margins during the year grew from 11.5% in FY22 to 11.7% in FY23.

SOLAR INDUSTRIES Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	39,476	69,225	75.4%
Other income	Rs m	324	315	-2.6%
Total Revenues	Rs m	39,800	69,541	74.7%
Gross profit	Rs m	7,346	12,887	75.4%
Depreciation	Rs m	1,093	1,282	17.4%
Interest	Rs m	503	904	79.9%
Profit before tax	Rs m	6,074	11,016	81.4%
Tax	Rs m	1,520	2,904	91.1%
Profit after tax	Rs m	4,555	8,112	78.1%
Gross profit margin	%	18.6	18.6
Effective tax rate	%	25.0	26.4
Net profit margin	%	11.5	11.7

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SOLAR INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 16 billion as compared to Rs 11 billion in FY22, thereby witnessing an increase of 46.0%.
• Long-term debt stood at Rs 5 billion as compared to Rs 4 billion during FY22, a growth of 8.5%.
• Current assets rose 51% and stood at Rs 25 billion, while fixed assets rose 22% and stood at Rs 24 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 49 billion as against Rs 36 billion during FY22, thereby witnessing a growth of 35%.

SOLAR INDUSTRIES Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	19,143	26,103	36.4
Current Liabilities	Rs m	11,179	16,323	46.0
Long-term Debt	Rs m	4,359	4,727	8.5
Total Liabilities	Rs m	36,294	49,087	35.2
Current assets	Rs m	16,610	25,014	50.6
Fixed Assets	Rs m	19,656	24,074	22.5
Total Assets	Rs m	36,294	49,087	35.2

SOLAR INDUSTRIES Cash Flow Statement Analysis

• SOLAR INDUSTRIES's cash flow from operating activities (CFO) during FY23 stood at Rs 7 billion, an improvement of 120.4% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -5 billion, an improvement of 71.3% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 1 billion, an improvement of 360% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 2 billion from the Rs -853 million net cash flows seen during FY22.

SOLAR INDUSTRIES 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	2,978	6,565	120.4%
Cash Flow from Investing Activities	Rs m	-3,031	-5,190	-
Cash Flow from Financing Activities	Rs m	-454	1,182	-
Net Cash Flow	Rs m	-853	1,604	-

Current Valuations for SOLAR INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 89.6, an improvement from the EPS of Rs 50.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 3,777.7, stands at 42.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 13.1 times, while the price to sales ratio stands at 4.9 times.
• The company's price to cash flow (P/CF) ratio stood at 33.7 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	436.2	765.0
TTM Earnings per share	Rs	50.3	89.6
Diluted earnings per share	Rs	50.3	89.6
Price to Cash Flow	x	44.9	33.7
TTM P/E ratio	x	55.7	42.1
Price / Book Value ratio	x	9.8	12.1
Market Cap	Rs m	186,925	316,985
Dividends per share (Unadj.)	Rs	7.5	8.0

Ratio Analysis for SOLAR INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.5x 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 13.2x during FY23, from 13.1x 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 31.1% during FY23, from 23.8% 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 improved and stood at 38.7% 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 improved and stood at 18.4% during FY23, from 13.9% 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	1.5
Debtors’ Days	Days	5	4
Interest coverage	x	13.1	13.2
Debt to equity ratio	x	0.2	0.2
Return on assets	%	13.9	18.4
Return on equity	%	23.8	31.1
Return on capital employed	%	28.0	38.7

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

SOLAR INDUSTRIES Share Price Performance

Over the last one year, SOLAR INDUSTRIES share price has moved up from Rs 2,616.6 to Rs 3,777.7, registering a gain of Rs 1,161.1 or around 44.4%.

Overall, the S&P BSE SENSEX is up 15.6% over the year.

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