WELSPUN CORP 2022-23 Annual Report Analysis

Fri, 31 Mar

WELSPUN CORP 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.

WELSPUN CORP Income Statement Analysis

• Operating income during the year rose 50.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 14.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 5.4% in FY23 as against 7.0% in FY22.
• Depreciation charges increased by 18.9% and finance costs increased by 138.6% YoY, respectively.
• Other income declined by 36.3% YoY.
• Net profit for the year declined by 55.2% YoY.
• Net profit margins during the year declined from 6.8% in FY22 to 2.0% in FY23.

WELSPUN CORP Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	65,051	97,581	50.0%
Other income	Rs m	5,609	3,573	-36.3%
Total Revenues	Rs m	70,660	101,154	43.2%
Gross profit	Rs m	4,563	5,225	14.5%
Depreciation	Rs m	2,548	3,030	18.9%
Interest	Rs m	1,019	2,432	138.6%
Profit before tax	Rs m	6,606	3,336	-49.5%
Tax	Rs m	2,164	1,345	-37.9%
Profit after tax	Rs m	4,442	1,992	-55.2%
Gross profit margin	%	7.0	5.4
Effective tax rate	%	32.8	40.3
Net profit margin	%	6.8	2.0

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WELSPUN CORP Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 83 billion as compared to Rs 31 billion in FY22, thereby witnessing an increase of 167.2%.
• Long-term debt stood at Rs 19 billion as compared to Rs 14 billion during FY22, a growth of 34.8%.
• Current assets rose 119% and stood at Rs 98 billion, while fixed assets rose 16% and stood at Rs 56 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 154 billion as against Rs 93 billion during FY22, thereby witnessing a growth of 65%.

WELSPUN CORP Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	44,182	47,189	6.8
Current Liabilities	Rs m	31,072	83,014	167.2
Long-term Debt	Rs m	14,294	19,262	34.8
Total Liabilities	Rs m	93,202	154,099	65.3
Current assets	Rs m	44,660	97,849	119.1
Fixed Assets	Rs m	48,526	56,233	15.9
Total Assets	Rs m	93,202	154,099	65.3

WELSPUN CORP Cash Flow Statement Analysis

• WELSPUN CORP's cash flow from operating activities (CFO) during FY23 stood at Rs -2 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -4 billion, an improvement of 99.3% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 9 billion, an improvement of 101% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 4 billion from the Rs 5 billion net cash flows seen during FY22.

WELSPUN CORP 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	2,185	-1,851	-
Cash Flow from Investing Activities	Rs m	-2,091	-4,167	-
Cash Flow from Financing Activities	Rs m	4,527	9,088	100.7%
Net Cash Flow	Rs m	4,704	3,761	-20.0%

Current Valuations for WELSPUN CORP

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 7.6, an decline from the EPS of Rs 17.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 201.0, stands at 42.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.1 times, while the price to sales ratio stands at 0.5 times.
• The company's price to cash flow (P/CF) ratio stood at 11.9 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	249.3	373.1
TTM Earnings per share	Rs	17.0	7.6
Diluted earnings per share	Rs	17.0	7.6
Price to Cash Flow	x	6.3	11.9
TTM P/E ratio	x	9.7	42.4
Price / Book Value ratio	x	0.9	1.3
Market Cap	Rs m	39,534	59,936
Dividends per share (Unadj.)	Rs	5.0	5.0

Ratio Analysis for WELSPUN CORP

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.2x during FY23, from 1.4x 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 2.4x during FY23, from 7.5x 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 declined and down at 4.2% during FY23, from 10.1% 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 8.7% during FY23, from 13.0% 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 2.9% during FY23, from 5.9% 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	1.4	1.2
Debtors’ Days	Days	5	4
Interest coverage	x	7.5	2.4
Debt to equity ratio	x	0.3	0.4
Return on assets	%	5.9	2.9
Return on equity	%	10.1	4.2
Return on capital employed	%	13.0	8.7

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

WELSPUN CORP Share Price Performance

Over the last one year, WELSPUN CORP share price has moved up from Rs 167.5 to Rs 201.0, registering a gain of Rs 33.5 or around 20.0%.

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 WELSPUN CORP and quarterly results for WELSPUN CORP)