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ENKEI WHEELS 2022-23 Annual Report Analysis

Mon, 29 Apr

ENKEI WHEELS has announced its results for the year ended December 2023. Let us have a look at the detailed performance review of the company during FY22-23.

ENKEI WHEELS Income Statement Analysis

• Operating income during the year rose 7.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 33.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 8.5% in CY23 as against 6.9% in CY22.
• Depreciation charges increased by 46.3% and finance costs decreased by 29.6% YoY, respectively.
• Other income declined by 4.2% YoY.
• Net profit for the year grew by 215.1% YoY.
• Net profit margins during the year grew from 0.6% in CY22 to 1.6% in CY23.

ENKEI WHEELS Income Statement 2022-23

No. of Mths Year Ending		12 Dec-22*	12 Dec-23*	% Change
Net Sales	Rs m	6,635	7,161	7.9%
Other income	Rs m	84	81	-4.2%
Total Revenues	Rs m	6,719	7,242	7.8%
Gross profit	Rs m	457	609	33.3%
Depreciation	Rs m	284	415	46.3%
Interest	Rs m	162	114	-29.6%
Profit before tax	Rs m	96	161	67.7%
Tax	Rs m	59	44	-25.7%
Profit after tax	Rs m	37	117	215.1%
Gross profit margin	%	6.9	8.5
Effective tax rate	%	61.2	27.1
Net profit margin	%	0.6	1.6

Economic Trend Alert: India's Next Small Cap Wave

ENKEI WHEELS Balance Sheet Analysis

• The company's current liabilities during CY23 stood at Rs 2 billion as compared to Rs 1 billion in CY22, thereby witnessing an increase of 9.4%.
• Long-term debt stood at Rs 1 billion as compared to Rs 1 billion during CY22, a growth of 7.5%.
• Current assets rose 13% and stood at Rs 2 billion, while fixed assets rose 6% and stood at Rs 4 billion in CY23.
• Overall, the total assets and liabilities for CY23 stood at Rs 5 billion as against Rs 5 billion during CY22, thereby witnessing a growth of 8%.

ENKEI WHEELS Balance Sheet as on December 2023

No. of Mths Year Ending		12 Dec-22*	12 Dec-23*	% Change
Networth	Rs m	2,212	2,332	5.4
Current Liabilities	Rs m	1,444	1,580	9.4
Long-term Debt	Rs m	1,051	1,129	7.5
Total Liabilities	Rs m	4,938	5,336	8.1
Current assets	Rs m	1,467	1,662	13.3
Fixed Assets	Rs m	3,471	3,673	5.8
Total Assets	Rs m	4,938	5,336	8.1

ENKEI WHEELS Cash Flow Statement Analysis

• ENKEI WHEELS's cash flow from operating activities (CFO) during CY23 stood at Rs 585 million, an improvement of 19.8% on a YoY basis.
• Cash flow from investing activities (CFI) during CY23 stood at Rs -558 million, an improvement of 33.0% on a YoY basis.
• Cash flow from financial activities (CFF) during CY23 stood at Rs 15 million, an improvement of 105% on a YoY basis.
• Overall, net cash flows for the company during CY23 stood at Rs 42 million from the Rs -260 million net cash flows seen during CY22.

ENKEI WHEELS Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Dec-22	Dec-23
Cash Flow from Operating Activities	Rs m	488	585	19.8%
Cash Flow from Investing Activities	Rs m	-420	-558	-
Cash Flow from Financing Activities	Rs m	-329	15	-
Net Cash Flow	Rs m	-260	42	-

Current Valuations for ENKEI WHEELS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 6.5, an improvement from the EPS of Rs 2.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 582.5, stands at 89.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.5 times, while the price to sales ratio stands at 1.5 times.
• The company's price to cash flow (P/CF) ratio stood at 17.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Dec-22*	12 Dec-23*
Sales per share (Unadj.)	Rs	369.2	398.5
TTM Earnings per share	Rs	2.1	6.5
Diluted earnings per share	Rs	2.1	6.5
Price to Cash Flow	x	32.4	17.8
TTM P/E ratio	x	280.6	89.5
Price / Book Value ratio	x	3.9	4.1
Market Cap	Rs m	8,547	9,493
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for ENKEI WHEELS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.1x during CY23, from 1.0x during CY22. 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 2.4x during CY23, from 1.6x during CY22. 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 5.0% during CY23, from 1.7% during CY23. 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 7.9% during CY23, from 7.9% during CY22. 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 4.3% during CY23, from 4.0% during CY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Dec-22*	12 Dec-23*
Current ratio	x	1.0	1.1
Debtors’ Days	Days	31	43
Interest coverage	x	1.6	2.4
Debt to equity ratio	x	0.5	0.5
Return on assets	%	4.0	4.3
Return on equity	%	1.7	5.0
Return on capital employed	%	7.9	7.9

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

ENKEI WHEELS Share Price Performance

Over the last one year, ENKEI WHEELS share price has moved up from Rs 368.0 to Rs 434.1, registering a gain of Rs 66.1 or around 18.0%.

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

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