ZF COMMERCIAL 2022-23 Annual Report Analysis

Sun, 9 Jul

ZF COMMERCIAL 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.

ZF COMMERCIAL Income Statement Analysis

• Operating income during the year rose 35.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 86.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 13.7% in FY23 as against 9.9% in FY22.
• Depreciation charges increased by 13.4% and finance costs increased by 197.8% YoY, respectively.
• Other income grew by 78.5% YoY.
• Net profit for the year grew by 123.6% YoY.
• Net profit margins during the year grew from 5.6% in FY22 to 9.2% in FY23.

ZF COMMERCIAL Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	25,434	34,442	35.4%
Other income	Rs m	375	670	78.5%
Total Revenues	Rs m	25,809	35,112	36.0%
Gross profit	Rs m	2,525	4,704	86.2%
Depreciation	Rs m	924	1,048	13.4%
Interest	Rs m	19	57	197.8%
Profit before tax	Rs m	1,957	4,269	118.1%
Tax	Rs m	537	1,092	103.5%
Profit after tax	Rs m	1,421	3,177	123.6%
Gross profit margin	%	9.9	13.7
Effective tax rate	%	27.4	25.6
Net profit margin	%	5.6	9.2

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ZF COMMERCIAL Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 5 billion as compared to Rs 5 billion in FY22, thereby witnessing an increase of 7.5%.
• Current assets rose 14% and stood at Rs 22 billion, while fixed assets rose 15% and stood at Rs 8 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 30 billion as against Rs 26 billion during FY22, thereby witnessing a growth of 15%.

ZF COMMERCIAL Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	21,141	24,091	14.0
Current Liabilities	Rs m	4,985	5,358	7.5
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	26,182	30,003	14.6
Current assets	Rs m	19,557	22,389	14.5
Fixed Assets	Rs m	6,625	7,615	14.9
Total Assets	Rs m	26,182	30,003	14.6

ZF COMMERCIAL Cash Flow Statement Analysis

• ZF COMMERCIAL's cash flow from operating activities (CFO) during FY23 stood at Rs 3 billion, an improvement of 116.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -3 billion, an improvement of 52.8% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -311 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -28 million from the Rs -675 million net cash flows seen during FY22.

ZF COMMERCIAL 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	1,381	2,985	116.1%
Cash Flow from Investing Activities	Rs m	-1,773	-2,710	-
Cash Flow from Financing Activities	Rs m	-285	-311	-
Net Cash Flow	Rs m	-675	-28	-

Current Valuations for ZF COMMERCIAL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 167.5, an improvement from the EPS of Rs 74.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 11,950.3, stands at 71.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 9.4 times, while the price to sales ratio stands at 6.6 times.
• The company's price to cash flow (P/CF) ratio stood at 40.0 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	1,340.7	1,815.6
TTM Earnings per share	Rs	74.9	167.5
Diluted earnings per share	Rs	74.9	167.5
Price to Cash Flow	x	61.6	40.0
TTM P/E ratio	x	101.6	71.4
Price / Book Value ratio	x	6.6	7.0
Market Cap	Rs m	139,781	169,011
Dividends per share (Unadj.)	Rs	12.0	13.0

Ratio Analysis for ZF COMMERCIAL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 4.2x during FY23, from 3.9x 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 76.4x during FY23, from 103.9x 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 13.2% during FY23, from 6.7% 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 18.0% during FY23, from 9.3% 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 10.8% during FY23, from 5.5% 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	3.9	4.2
Debtors’ Days	Days	956	803
Interest coverage	x	103.9	76.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	5.5	10.8
Return on equity	%	6.7	13.2
Return on capital employed	%	9.3	18.0

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

ZF COMMERCIAL Share Price Performance

Over the last one year, ZF COMMERCIAL share price has moved up from Rs 7,853.7 to Rs 11,950.3, registering a gain of Rs 4,096.7 or around 52.2%.

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

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