TARSONS PRODUCTS 2022-23 Annual Report Analysis

Thu, 22 Jun

TARSONS PRODUCTS 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.

TARSONS PRODUCTS Income Statement Analysis

• Operating income during the year fell 5.8% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 15.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 45.7% in FY23 as against 50.8% in FY22.
• Depreciation charges increased by 29.8% and finance costs increased by 6.0% YoY, respectively.
• Other income grew by 46.1% YoY.
• Net profit for the year declined by 19.8% YoY.
• Net profit margins during the year declined from 33.5% in FY22 to 28.5% in FY23.

TARSONS PRODUCTS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	3,008	2,832	-5.8%
Other income	Rs m	85	124	46.1%
Total Revenues	Rs m	3,093	2,956	-4.4%
Gross profit	Rs m	1,527	1,293	-15.3%
Depreciation	Rs m	220	285	29.8%
Interest	Rs m	42	45	6.0%
Profit before tax	Rs m	1,350	1,087	-19.5%
Tax	Rs m	343	280	-18.4%
Profit after tax	Rs m	1,007	807	-19.8%
Gross profit margin	%	50.8	45.7
Effective tax rate	%	25.4	25.8
Net profit margin	%	33.5	28.5

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TARSONS PRODUCTS Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 875 million as compared to Rs 349 million in FY22, thereby witnessing an increase of 150.7%.
• Long-term debt stood at Rs 807 million as compared to Rs 93 million during FY22, a growth of 763.5%.
• Current assets rose 13% and stood at Rs 3 billion, while fixed assets rose 41% and stood at Rs 6 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 9 billion as against Rs 7 billion during FY22, thereby witnessing a growth of 31%.

TARSONS PRODUCTS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	4,898	5,693	16.2
Current Liabilities	Rs m	349	875	150.7
Long-term Debt	Rs m	93	807	763.5
Total Liabilities	Rs m	6,734	8,794	30.6
Current assets	Rs m	2,445	2,766	13.1
Fixed Assets	Rs m	4,289	6,028	40.6
Total Assets	Rs m	6,734	8,794	30.6

TARSONS PRODUCTS Cash Flow Statement Analysis

• TARSONS PRODUCTS's cash flow from operating activities (CFO) during FY23 stood at Rs 756 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -2 billion, an improvement of 29.4% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 846 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -184 million from the Rs 751 million net cash flows seen during FY22.

TARSONS PRODUCTS 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	835	756	-9.4%
Cash Flow from Investing Activities	Rs m	-1,379	-1,785	-
Cash Flow from Financing Activities	Rs m	1,296	846	-34.7%
Net Cash Flow	Rs m	751	-184	-

Current Valuations for TARSONS PRODUCTS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 15.2, an decline from the EPS of Rs 18.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 598.7, stands at 39.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.6 times, while the price to sales ratio stands at 11.2 times.
• The company's price to cash flow (P/CF) ratio stood at 34.5 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	56.5	53.2
TTM Earnings per share	Rs	18.9	15.2
Diluted earnings per share	Rs	18.9	15.2
Price to Cash Flow	x	30.6	34.5
TTM P/E ratio	x	37.2	39.5
Price / Book Value ratio	x	8.1	6.6
Market Cap	Rs m	39,869	37,666
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for TARSONS PRODUCTS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 3.2x during FY23, from 7.0x 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 25.3x during FY23, from 33.0x 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 14.2% during FY23, from 20.6% 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 17.4% during FY23, from 27.9% 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 9.7% during FY23, from 15.6% 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	7.0	3.2
Debtors’ Days	Days	79	85
Interest coverage	x	33.0	25.3
Debt to equity ratio	x	0.0	0.1
Return on assets	%	15.6	9.7
Return on equity	%	20.6	14.2
Return on capital employed	%	27.9	17.4

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

TARSONS PRODUCTS Share Price Performance

Over the last one year, TARSONS PRODUCTS share price has moved down from Rs 695.7 to Rs 598.7, registering a loss of Rs 97.1 or around 13.9%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 25,036.3 (down 0.3%). Over the last one year it has moved up from 21,241.4 to 25,036.3, a gain of 3,795 points (up 17.9%).

Overall, the S&P BSE SENSEX is up 22.9% over the year.

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