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VENKYS 2022-23 Annual Report Analysis

Wed, 13 Dec

VENKYS 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.

VENKYS Income Statement Analysis

• Operating income during the year fell 3.8% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 54.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 2.6% in FY23 as against 5.6% in FY22.
• Depreciation charges decreased by 3.0% and finance costs increased by 5.1% YoY, respectively.
• Other income grew by 3.8% YoY.
• Net profit for the year declined by 57.2% YoY.
• Net profit margins during the year declined from 3.7% in FY22 to 1.7% in FY23.

VENKYS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	44,003	42,337	-3.8%
Other income	Rs m	363	377	3.8%
Total Revenues	Rs m	44,366	42,714	-3.7%
Gross profit	Rs m	2,444	1,116	-54.3%
Depreciation	Rs m	366	355	-3.0%
Interest	Rs m	176	185	5.1%
Profit before tax	Rs m	2,265	953	-57.9%
Tax	Rs m	617	248	-59.8%
Profit after tax	Rs m	1,648	705	-57.2%
Gross profit margin	%	5.6	2.6
Effective tax rate	%	27.2	26.0
Net profit margin	%	3.7	1.7

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VENKYS Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 7 billion as compared to Rs 6 billion in FY22, thereby witnessing an increase of 3.6%.
• Current assets rose 5% and stood at Rs 13 billion, while fixed assets rose 0% and stood at Rs 7 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 20 billion as against Rs 19 billion during FY22, thereby witnessing a growth of 4%.

VENKYS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	12,488	12,986	4.0
Current Liabilities	Rs m	6,414	6,646	3.6
Long-term Debt	Rs m	47	0	-100.0
Total Liabilities	Rs m	19,466	20,149	3.5
Current assets	Rs m	12,757	13,421	5.2
Fixed Assets	Rs m	6,709	6,727	0.3
Total Assets	Rs m	19,466	20,149	3.5

VENKYS Cash Flow Statement Analysis

• VENKYS's cash flow from operating activities (CFO) during FY23 stood at Rs 861 million, an improvement of 1,612.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -266 million, an improvement of 42.4% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -450 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 145 million from the Rs -475 million net cash flows seen during FY22.

VENKYS 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	50	861	1,612.3%
Cash Flow from Investing Activities	Rs m	-187	-266	-
Cash Flow from Financing Activities	Rs m	-339	-450	-
Net Cash Flow	Rs m	-475	145	-

Current Valuations for VENKYS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 50.0, an decline from the EPS of Rs 117.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,941.5, stands at 28.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.1 times, while the price to sales ratio stands at 0.6 times.
• The company's price to cash flow (P/CF) ratio stood at 25.6 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	3,123.0	3,004.7
TTM Earnings per share	Rs	117.0	50.0
Diluted earnings per share	Rs	117.0	50.0
Price to Cash Flow	x	15.0	25.6
TTM P/E ratio	x	18.3	28.7
Price / Book Value ratio	x	3.1	2.1
Market Cap	Rs m	38,402	27,156
Dividends per share (Unadj.)	Rs	13.0	6.0

Ratio Analysis for VENKYS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.0x during FY23, from 2.0x 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 6.2x during FY23, from 13.9x 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 declined and down at 5.4% during FY23, from 13.2% 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 8.8% during FY23, from 19.5% 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 4.4% during FY23, from 9.4% 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	2.0	2.0
Debtors’ Days	Days	530	566
Interest coverage	x	13.9	6.2
Debt to equity ratio	x	0.0	0.0
Return on assets	%	9.4	4.4
Return on equity	%	13.2	5.4
Return on capital employed	%	19.5	8.8

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

VENKYS Share Price Performance

Over the last one year, VENKYS share price has moved down from Rs 2,058.9 to Rs 1,941.5, registering a loss of Rs 117.4 or around 5.7%.

Overall, the S&P BSE SENSEX is up 12.0% over the year.

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