TRF 2022-23 Annual Report Analysis

Mon, 14 Aug

TRF 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.

TRF Income Statement Analysis

• Operating income during the year rose 39.3% on a year-on-year (YoY) basis.
• The company's operating profit was by NA YoY during the fiscal. Operating profit margins witnessed a fall and down at 32.9% in FY23 as against 3.0% in FY22.
• Depreciation charges decreased by 16.6% and finance costs decreased by 19.2% YoY, respectively.
• Other income grew by 137.1% YoY.
• Net profit for the year declined by NA YoY.
• Net profit margins during the year grew from 12.7% in FY22 to 49.4% in FY23.

TRF Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	1,271	1,771	39.3%
Other income	Rs m	208	493	137.1%
Total Revenues	Rs m	1,479	2,264	53.0%
Gross profit	Rs m	-39	583	NA
Depreciation	Rs m	24	20	-16.6%
Interest	Rs m	306	248	-19.2%
Profit before tax	Rs m	-161	808	NA
Tax	Rs m	0	-67	NA
Profit after tax	Rs m	-161	875	NA
Gross profit margin	%	-3.0	32.9
Effective tax rate	%	0.1	-8.3
Net profit margin	%	-12.7	49.4

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TRF Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 2 billion as compared to Rs 6 billion in FY22, thereby witnessing an decrease of -64.7%.
• Long-term debt stood at Rs 839 million as compared to Rs 802 million during FY22, a growth of 4.6%.
• Current assets fell 6% and stood at Rs 3 billion, while fixed assets fell 29% and stood at Rs 565 million in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 3 billion as against Rs 4 billion during FY22, thereby witnessing a fall of 11%.

TRF Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	-2,939	220	NA
Current Liabilities	Rs m	5,593	1,976	-64.7
Long-term Debt	Rs m	802	839	4.6
Total Liabilities	Rs m	3,675	3,262	-11.2
Current assets	Rs m	2,875	2,697	-6.2
Fixed Assets	Rs m	800	565	-29.4
Total Assets	Rs m	3,675	3,262	-11.2

TRF Cash Flow Statement Analysis

• TRF's cash flow from operating activities (CFO) during FY23 stood at Rs 831 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -522 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -303 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 27 million from the Rs -224 million net cash flows seen during FY22.

TRF 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	-377	831	-
Cash Flow from Investing Activities	Rs m	58	-522	-
Cash Flow from Financing Activities	Rs m	89	-303	-
Net Cash Flow	Rs m	-224	27	-

Current Valuations for TRF

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 79.6, an improvement from the EPS of Rs -14.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 191.9, stands at 2.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 9.6 times, while the price to sales ratio stands at 1.2 times.
• The company's price to cash flow (P/CF) ratio stood at 3.0 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	115.6	161.0
TTM Earnings per share	Rs	-14.6	79.6
Diluted earnings per share	Rs	-14.6	79.5
Price to Cash Flow	x	-10.9	3.0
TTM P/E ratio	x	-9.3	2.8
Price / Book Value ratio	x	-0.5	12.2
Market Cap	Rs m	1,402	2,681
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for TRF

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x during FY23, from 0.5x 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 4.3x during FY23, from 0.5x 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 398.1% during FY23, from 5.5% 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 99.7% during FY23, from -6.8% 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 34.4% during FY23, from 4.0% 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	0.5	1.4
Debtors’ Days	Days	4,614	2,345
Interest coverage	x	0.5	4.3
Debt to equity ratio	x	-0.3	3.8
Return on assets	%	4.0	34.4
Return on equity	%	5.5	398.1
Return on capital employed	%	-6.8	99.7

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

TRF Share Price Performance

Over the last one year, TRF share price has moved up from Rs 158.6 to Rs 191.9, registering a gain of Rs 33.3 or around 21.0%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 43,039.3 (down 0.9%). Over the last one year it has moved up from 30,944.1 to 43,039.3, a gain of 12,095 points (up 39.1%).

Overall, the S&P BSE SENSEX is up 10.5% over the year.

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