STEEL EXCHANGE 2022-23 Annual Report Analysis

Fri, 31 Mar

STEEL EXCHANGE 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.

STEEL EXCHANGE Income Statement Analysis

• Operating income during the year rose 25.1% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 9.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 6.9% in FY23 as against 9.5% in FY22.
• Depreciation charges increased by 2.6% and finance costs increased by 19.9% YoY, respectively.
• Other income declined by 67.5% YoY.
• Net profit for the year declined by NA YoY.
• Net profit margins during the year declined from 10.6% in FY22 to 4.3% in FY23.

STEEL EXCHANGE Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	10,995	13,754	25.1%
Other income	Rs m	222	72	-67.5%
Total Revenues	Rs m	11,217	13,826	23.3%
Gross profit	Rs m	1,041	945	-9.3%
Depreciation	Rs m	238	244	2.6%
Interest	Rs m	881	1,056	19.9%
Profit before tax	Rs m	145	-283	NA
Tax	Rs m	-1,020	305	NA
Profit after tax	Rs m	1,165	-589	NA
Gross profit margin	%	9.5	6.9
Effective tax rate	%	-704.3	-107.8
Net profit margin	%	10.6	-4.3

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STEEL EXCHANGE Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 4 billion as compared to Rs 3 billion in FY22, thereby witnessing an increase of 36.8%.
• Long-term debt down at Rs 2 billion as compared to Rs 3 billion during FY22, a fall of 33.4%.
• Current assets rose 15% and stood at Rs 5 billion, while fixed assets fell 2% and stood at Rs 6 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 11 billion as against Rs 10 billion during FY22, thereby witnessing a growth of 4%.

STEEL EXCHANGE Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	4,805	5,066	5.4
Current Liabilities	Rs m	2,805	3,837	36.8
Long-term Debt	Rs m	3,437	2,288	-33.4
Total Liabilities	Rs m	10,467	10,919	4.3
Current assets	Rs m	4,007	4,591	14.6
Fixed Assets	Rs m	6,314	6,210	-1.6
Total Assets	Rs m	10,467	10,919	4.3

STEEL EXCHANGE Cash Flow Statement Analysis

• STEEL EXCHANGE's cash flow from operating activities (CFO) during FY23 stood at Rs 1 billion, an improvement of 2,520.5% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -136 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -1 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 40 million from the Rs 133 million net cash flows seen during FY22.

STEEL EXCHANGE 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	53	1,377	2,520.5%
Cash Flow from Investing Activities	Rs m	93	-136	-
Cash Flow from Financing Activities	Rs m	-13	-1,200	-
Net Cash Flow	Rs m	133	40	-69.5%

Current Valuations for STEEL EXCHANGE

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -0.6, an decline from the EPS of Rs 13.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 13.6, stands at -27.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.2 times, while the price to sales ratio stands at 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at -55.3 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	124.8	13.2
TTM Earnings per share	Rs	13.2	-0.6
Diluted earnings per share	Rs	1.0	-0.5
Price to Cash Flow	x	20.3	-55.3
TTM P/E ratio	x	24.4	-27.4
Price / Book Value ratio	x	2.9	3.8
Market Cap	Rs m	13,939	19,072
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for STEEL EXCHANGE

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.2x during FY23, from 1.4x 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 0.7x 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 -11.6% during FY23, from 24.2% 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 10.5% during FY23, from 12.4% 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 4.3% during FY23, from 19.5% 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	1.4	1.2
Debtors’ Days	Days	305	298
Interest coverage	x	1.2	0.7
Debt to equity ratio	x	0.7	0.5
Return on assets	%	19.5	4.3
Return on equity	%	24.2	-11.6
Return on capital employed	%	12.4	10.5

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

STEEL EXCHANGE Share Price Performance

Over the last one year, STEEL EXCHANGE share price has moved down from Rs 24.0 to Rs 13.6, registering a loss of Rs 10.4 or around 43.4%.

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 STEEL EXCHANGE and quarterly results for STEEL EXCHANGE)