UNITED DRILLING TOOLS 2022-23 Annual Report Analysis

Wed, 28 Feb

UNITED DRILLING TOOLS 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.

UNITED DRILLING TOOLS Income Statement Analysis

• Operating income during the year fell 31.5% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 74.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 16.0% in FY23 as against 42.5% in FY22.
• Depreciation charges increased by 35.7% and finance costs decreased by 1.3% YoY, respectively.
• Other income declined by 45.8% YoY.
• Net profit for the year declined by 79.5% YoY.
• Net profit margins during the year declined from 28.6% in FY22 to 8.6% in FY23.

UNITED DRILLING TOOLS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	1,749	1,198	-31.5%
Other income	Rs m	11	6	-45.8%
Total Revenues	Rs m	1,760	1,204	-31.6%
Gross profit	Rs m	743	192	-74.2%
Depreciation	Rs m	30	41	35.7%
Interest	Rs m	8	8	-1.3%
Profit before tax	Rs m	715	148	-79.3%
Tax	Rs m	214	45	-78.9%
Profit after tax	Rs m	500	103	-79.5%
Gross profit margin	%	42.5	16.0
Effective tax rate	%	30.0	30.6
Net profit margin	%	28.6	8.6

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UNITED DRILLING TOOLS Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 330 million as compared to Rs 569 million in FY22, thereby witnessing an decrease of -42.0%.
• Long-term debt down at Rs 0 million as compared to Rs 1 million during FY22, a fall of 51.4%.
• Current assets fell 4% and stood at Rs 2 billion, while fixed assets fell 9% and stood at Rs 881 million in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 3 billion as against Rs 3 billion during FY22, thereby witnessing a fall of 5%.

UNITED DRILLING TOOLS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	2,395	2,471	3.1
Current Liabilities	Rs m	569	330	-42.0
Long-term Debt	Rs m	1	0	-51.4
Total Liabilities	Rs m	3,024	2,861	-5.4
Current assets	Rs m	2,056	1,980	-3.7
Fixed Assets	Rs m	967	881	-9.0
Total Assets	Rs m	3,024	2,861	-5.4

UNITED DRILLING TOOLS Cash Flow Statement Analysis

• UNITED DRILLING TOOLS's cash flow from operating activities (CFO) during FY23 stood at Rs 257 million, an improvement of 301.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -94 million, an improvement of 52.6% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -164 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -1 million from the Rs -35 million net cash flows seen during FY22.

UNITED DRILLING TOOLS 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	64	257	301.1%
Cash Flow from Investing Activities	Rs m	-62	-94	-
Cash Flow from Financing Activities	Rs m	-37	-164	-
Net Cash Flow	Rs m	-35	-1	-

Current Valuations for UNITED DRILLING TOOLS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 5.1, an decline from the EPS of Rs 24.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 193.0, stands at 38.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.6 times, while the price to sales ratio stands at 3.3 times.
• The company's price to cash flow (P/CF) ratio stood at 54.0 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	86.2	59.0
TTM Earnings per share	Rs	24.6	5.1
Diluted earnings per share	Rs	24.6	5.1
Price to Cash Flow	x	18.9	54.0
TTM P/E ratio	x	20.0	38.0
Price / Book Value ratio	x	3.7	3.1
Market Cap	Rs m	8,825	7,778
Dividends per share (Unadj.)	Rs	2.1	1.8

Ratio Analysis for UNITED DRILLING TOOLS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 6.0x during FY23, from 3.6x 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 18.9x during FY23, from 86.3x 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 declined and down at 4.2% during FY23, from 20.9% 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 6.3% during FY23, from 30.2% 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 declined and down at 3.9% during FY23, from 16.8% 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	3.6	6.0
Debtors’ Days	Days	877	1,038
Interest coverage	x	86.3	18.9
Debt to equity ratio	x	0.0	0.0
Return on assets	%	16.8	3.9
Return on equity	%	20.9	4.2
Return on capital employed	%	30.2	6.3

To see how UNITED DRILLING TOOLS has performed over the last 5 years, please visit here.

UNITED DRILLING TOOLS Share Price Performance

Over the last one year, UNITED DRILLING TOOLS share price has moved down from Rs 493.3 to Rs 193.0, registering a loss of Rs 300.3 or around 60.9%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 34,369.7 (up 1.2%). Over the last one year it has moved up from 27,506.0 to 34,369.7, a gain of 6,864 points (up 25.0%).

Overall, the S&P BSE SENSEX is up 1.8% over the year.

(To know more, check out historical annual results for UNITED DRILLING TOOLS and quarterly results for UNITED DRILLING TOOLS)