HONEYWELL AUTOMATION 2022-23 Annual Report Analysis

Fri, 21 Jul

HONEYWELL AUTOMATION 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.

HONEYWELL AUTOMATION Income Statement Analysis

• Operating income during the year rose 16.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 19.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 15.1% in FY23 as against 14.8% in FY22.
• Depreciation charges decreased by 1.1% and finance costs decreased by 25.4% YoY, respectively.
• Other income grew by 58.4% YoY.
• Net profit for the year grew by 29.2% YoY.
• Net profit margins during the year grew from 11.5% in FY22 to 12.7% in FY23.

HONEYWELL AUTOMATION Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	29,483	34,476	16.9%
Other income	Rs m	823	1,305	58.4%
Total Revenues	Rs m	30,307	35,781	18.1%
Gross profit	Rs m	4,365	5,192	19.0%
Depreciation	Rs m	525	519	-1.1%
Interest	Rs m	87	65	-25.4%
Profit before tax	Rs m	4,576	5,913	29.2%
Tax	Rs m	1,185	1,533	29.3%
Profit after tax	Rs m	3,391	4,380	29.2%
Gross profit margin	%	14.8	15.1
Effective tax rate	%	25.9	25.9
Net profit margin	%	11.5	12.7

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HONEYWELL AUTOMATION Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 18 billion as compared to Rs 11 billion in FY22, thereby witnessing an increase of 65.3%.
• Current assets rose 31% and stood at Rs 47 billion, while fixed assets rose 213% and stood at Rs 12 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 59 billion as against Rs 40 billion during FY22, thereby witnessing a growth of 49%.

HONEYWELL AUTOMATION Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	28,275	31,755	12.3
Current Liabilities	Rs m	11,095	18,337	65.3
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	39,571	58,804	48.6
Current assets	Rs m	35,811	47,035	31.3
Fixed Assets	Rs m	3,760	11,769	213.0
Total Assets	Rs m	39,571	58,804	48.6

HONEYWELL AUTOMATION Cash Flow Statement Analysis

• HONEYWELL AUTOMATION's cash flow from operating activities (CFO) during FY23 stood at Rs 4 billion, an improvement of 55.5% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -1 billion, an improvement of 18.2% 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 2 billion from the Rs 593 million net cash flows seen during FY22.

HONEYWELL AUTOMATION 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	2,636	4,099	55.5%
Cash Flow from Investing Activities	Rs m	-1,094	-1,293	-
Cash Flow from Financing Activities	Rs m	-985	-1,020	-
Net Cash Flow	Rs m	593	1,903	220.8%

Current Valuations for HONEYWELL AUTOMATION

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 495.5, an improvement from the EPS of Rs 383.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 42,662.1, stands at 86.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 11.9 times, while the price to sales ratio stands at 10.9 times.
• The company's price to cash flow (P/CF) ratio stood at 67.2 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	3,335.2	3,900.0
TTM Earnings per share	Rs	383.6	495.5
Diluted earnings per share	Rs	383.6	495.4
Price to Cash Flow	x	89.4	67.2
TTM P/E ratio	x	103.3	86.1
Price / Book Value ratio	x	13.4	10.4
Market Cap	Rs m	379,787	329,278
Dividends per share (Unadj.)	Rs	90.0	95.0

Ratio Analysis for HONEYWELL AUTOMATION

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.6x during FY23, from 3.2x 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 92.0x during FY23, from 53.5x 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 13.8% during FY23, from 12.0% 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 18.8% during FY23, from 16.5% 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 7.6% during FY23, from 8.8% 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	3.2	2.6
Debtors’ Days	Days	836	993
Interest coverage	x	53.5	92.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	8.8	7.6
Return on equity	%	12.0	13.8
Return on capital employed	%	16.5	18.8

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

HONEYWELL AUTOMATION Share Price Performance

Over the last one year, HONEYWELL AUTOMATION share price has moved up from Rs 38,311.9 to Rs 42,662.1, registering a gain of Rs 4,350.2 or around 11.4%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 42,401.9 (up 1.7%). Over the last one year it has moved up from 29,013.8 to 42,401.9, a gain of 13,388 points (up 46.1%).

Overall, the S&P BSE SENSEX is up 20.4% over the year.

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