TRENT 2022-23 Annual Report Analysis

Tue, 16 May

TRENT 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.

TRENT Income Statement Analysis

• Operating income during the year rose 84.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 108.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 15.8% in FY23 as against 13.9% in FY22.
• Depreciation charges increased by 58.8% and finance costs increased by 25.9% YoY, respectively.
• Other income grew by 48.9% YoY.
• Net profit for the year grew by 1037.8% YoY.
• Net profit margins during the year grew from 0.8% in FY22 to 5.2% in FY23.

TRENT Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	41,036	75,552	84.1%
Other income	Rs m	1,752	2,609	48.9%
Total Revenues	Rs m	42,789	78,161	82.7%
Gross profit	Rs m	5,717	11,939	108.8%
Depreciation	Rs m	3,108	4,937	58.8%
Interest	Rs m	3,248	4,090	25.9%
Profit before tax	Rs m	1,112	5,521	396.4%
Tax	Rs m	766	1,584	106.8%
Profit after tax	Rs m	346	3,937	1,037.8%
Gross profit margin	%	13.9	15.8
Effective tax rate	%	68.9	28.7
Net profit margin	%	0.8	5.2

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TRENT Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 11 billion as compared to Rs 7 billion in FY22, thereby witnessing an increase of 67.4%.
• Long-term debt stood at Rs 5 billion as compared to Rs 5 billion during FY22, a growth of 0.1%.
• Current assets rose 33% and stood at Rs 24 billion, while fixed assets fell 5% and stood at Rs 55 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 79 billion as against Rs 76 billion during FY22, thereby witnessing a growth of 4%.

TRENT Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	23,640	25,955	9.8
Current Liabilities	Rs m	6,535	10,940	67.4
Long-term Debt	Rs m	4,974	4,980	0.1
Total Liabilities	Rs m	75,997	79,255	4.3
Current assets	Rs m	17,771	23,691	33.3
Fixed Assets	Rs m	58,162	55,477	-4.6
Total Assets	Rs m	75,997	79,255	4.3

TRENT Cash Flow Statement Analysis

• TRENT's cash flow from operating activities (CFO) during FY23 stood at Rs 6 billion, an improvement of 924.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -1 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -5 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 8 million from the Rs 61 million net cash flows seen during FY22.

TRENT 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	581	5,949	924.2%
Cash Flow from Investing Activities	Rs m	560	-1,026	-
Cash Flow from Financing Activities	Rs m	-1,080	-4,914	-
Net Cash Flow	Rs m	61	8	-86.3%

Current Valuations for TRENT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 11.1, an improvement from the EPS of Rs 1.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,516.4, stands at 173.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 20.8 times, while the price to sales ratio stands at 7.1 times.
• The company's price to cash flow (P/CF) ratio stood at 51.2 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	115.4	212.5
TTM Earnings per share	Rs	1.0	11.1
Diluted earnings per share	Rs	1.0	11.1
Price to Cash Flow	x	131.4	51.2
TTM P/E ratio	x	1,539.7	173.8
Price / Book Value ratio	x	15.1	17.5
Market Cap	Rs m	356,243	454,082
Dividends per share (Unadj.)	Rs	1.7	2.2

Ratio Analysis for TRENT

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.2x during FY23, from 2.7x 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 2.3x during FY23, from 1.3x 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 improved and stood at 15.2% during FY23, from 1.5% 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 31.1% during FY23, from 15.2% 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 10.1% during FY23, from 4.7% 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	2.7	2.2
Debtors’ Days	Days	0	0
Interest coverage	x	1.3	2.3
Debt to equity ratio	x	0.2	0.2
Return on assets	%	4.7	10.1
Return on equity	%	1.5	15.2
Return on capital employed	%	15.2	31.1

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

TRENT Share Price Performance

Over the last one year, TRENT share price has moved up from Rs 1,039.4 to Rs 1,516.4, registering a gain of Rs 477.0 or around 45.9%.

Overall, the S&P BSE SENSEX is up 17.7% over the year.

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