STAR CEMENT 2022-23 Annual Report Analysis

Thu, 21 Sep

STAR CEMENT 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.

STAR CEMENT Income Statement Analysis

• Operating income during the year rose 21.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 35.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 17.3% in FY23 as against 15.5% in FY22.
• Depreciation charges increased by 7.8% and finance costs decreased by 27.3% YoY, respectively.
• Other income grew by 56.1% YoY.
• Net profit for the year grew by 0.3% YoY.
• Net profit margins during the year declined from 11.1% in FY22 to 9.2% in FY23.

STAR CEMENT Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	22,218	27,048	21.7%
Other income	Rs m	334	521	56.1%
Total Revenues	Rs m	22,552	27,569	22.2%
Gross profit	Rs m	3,453	4,684	35.7%
Depreciation	Rs m	1,216	1,311	7.8%
Interest	Rs m	133	97	-27.3%
Profit before tax	Rs m	2,437	3,797	55.8%
Tax	Rs m	-31	1,321	NA
Profit after tax	Rs m	2,468	2,476	0.3%
Gross profit margin	%	15.5	17.3
Effective tax rate	%	-1.3	34.8
Net profit margin	%	11.1	9.2

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STAR CEMENT Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 7 billion as compared to Rs 4 billion in FY22, thereby witnessing an increase of 56.6%.
• Current assets rose 15% and stood at Rs 11 billion, while fixed assets rose 29% and stood at Rs 19 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 31 billion as against Rs 25 billion during FY22, thereby witnessing a growth of 23%.

STAR CEMENT Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	21,684	24,164	11.4
Current Liabilities	Rs m	4,265	6,677	56.6
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	25,061	30,844	23.1
Current assets	Rs m	9,916	11,366	14.6
Fixed Assets	Rs m	15,144	19,478	28.6
Total Assets	Rs m	25,061	30,844	23.1

STAR CEMENT Cash Flow Statement Analysis

• STAR CEMENT's cash flow from operating activities (CFO) during FY23 stood at Rs 4 billion 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 100 million, an improvement of 106% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 1 billion from the Rs -474 million net cash flows seen during FY22.

STAR CEMENT 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	4,171	3,752	-10.0%
Cash Flow from Investing Activities	Rs m	-2,888	-2,717	-
Cash Flow from Financing Activities	Rs m	-1,756	100	-
Net Cash Flow	Rs m	-474	1,135	-

Current Valuations for STAR CEMENT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 6.1, an improvement from the EPS of Rs 6.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 152.5, stands at 22.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.6 times, while the price to sales ratio stands at 2.3 times.
• The company's price to cash flow (P/CF) ratio stood at 11.0 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	55.0	66.9
TTM Earnings per share	Rs	6.1	6.1
Diluted earnings per share	Rs	6.1	6.1
Price to Cash Flow	x	9.8	11.0
TTM P/E ratio	x	14.7	22.6
Price / Book Value ratio	x	1.9	1.7
Market Cap	Rs m	40,883	41,550
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for STAR CEMENT

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.7x during FY23, from 2.3x 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 40.2x during FY23, from 19.3x 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 10.2% during FY23, from 11.4% 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 16.1% during FY23, from 11.9% 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 8.3% during FY23, from 10.4% 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	2.3	1.7
Debtors’ Days	Days	212	141
Interest coverage	x	19.3	40.2
Debt to equity ratio	x	0.0	0.0
Return on assets	%	10.4	8.3
Return on equity	%	11.4	10.2
Return on capital employed	%	11.9	16.1

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

STAR CEMENT Share Price Performance

Over the last one year, STAR CEMENT share price has moved up from Rs 104.6 to Rs 152.5, registering a gain of Rs 48.0 or around 45.9%.

Overall, the S&P BSE SENSEX is up 10.9% over the year.

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