AARTI INDUSTRIES 2023-24 Annual Report Analysis

Fri, 12 Jul

AARTI INDUSTRIES has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during FY23-24.

AARTI INDUSTRIES Income Statement Analysis

• Operating income during the year fell 3.7% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 10.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 17.0% in FY24 as against 18.3% in FY23.
• Depreciation charges increased by 21.8% and finance costs increased by 25.7% YoY, respectively.
• Other income grew by 877.9% YoY.
• Net profit for the year declined by 23.6% YoY.
• Net profit margins during the year declined from 9.2% in FY23 to 7.3% in FY24.

AARTI INDUSTRIES Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	59,545	57,326	-3.7%
Other income	Rs m	9	84	877.9%
Total Revenues	Rs m	59,554	57,410	-3.6%
Gross profit	Rs m	10,890	9,766	-10.3%
Depreciation	Rs m	3,105	3,781	21.8%
Interest	Rs m	1,683	2,115	25.7%
Profit before tax	Rs m	6,111	3,954	-35.3%
Tax	Rs m	659	-211	NA
Profit after tax	Rs m	5,452	4,165	-23.6%
Gross profit margin	%	18.3	17.0
Effective tax rate	%	10.8	-5.3
Net profit margin	%	9.2	7.3

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AARTI INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during FY24 down at Rs 26 billion as compared to Rs 28 billion in FY23, thereby witnessing an decrease of -7.4%.
• Long-term debt stood at Rs 15 billion as compared to Rs 6 billion during FY23, a growth of 140.1%.
• Current assets rose 0% and stood at Rs 25 billion, while fixed assets rose 15% and stood at Rs 70 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 95 billion as against Rs 85 billion during FY23, thereby witnessing a growth of 11%.

AARTI INDUSTRIES Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	49,201	52,874	7.5
Current Liabilities	Rs m	27,833	25,764	-7.4
Long-term Debt	Rs m	6,347	15,239	140.1
Total Liabilities	Rs m	85,281	94,720	11.1
Current assets	Rs m	24,593	24,689	0.4
Fixed Assets	Rs m	60,689	70,031	15.4
Total Assets	Rs m	85,281	94,720	11.1

AARTI INDUSTRIES Cash Flow Statement Analysis

• AARTI INDUSTRIES's cash flow from operating activities (CFO) during FY24 stood at Rs 12 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -13 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs 348 million on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs -710 million from the Rs 272 million net cash flows seen during FY23.

AARTI INDUSTRIES Cash Flow Statement 2023-24

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-23	Mar-24
Cash Flow from Operating Activities	Rs m	13,187	12,039	-8.7%
Cash Flow from Investing Activities	Rs m	-13,298	-13,096	-
Cash Flow from Financing Activities	Rs m	382	348	-9.0%
Net Cash Flow	Rs m	272	-710	-

Current Valuations for AARTI INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 11.5, an decline from the EPS of Rs 15.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 698.0, stands at 60.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.8 times, while the price to sales ratio stands at 4.4 times.
• The company's price to cash flow (P/CF) ratio stood at 26.2 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Sales per share (Unadj.)	Rs	164.3	158.1
TTM Earnings per share	Rs	15.0	11.5
Diluted earnings per share	Rs	15.0	11.5
Price to Cash Flow	x	22.0	26.2
TTM P/E ratio	x	34.4	60.7
Price / Book Value ratio	x	5.4	3.9
Market Cap	Rs m	266,866	208,503
Dividends per share (Unadj.)	Rs	2.5	1.0

Ratio Analysis for AARTI INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.0x during FY24, from 0.9x during FY23. 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 2.9x during FY24, from 4.6x during FY23. 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 7.9% during FY24, from 11.1% during FY24. 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 8.9% during FY24, from 14.0% during FY23. 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 6.6% during FY24, from 8.4% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Current ratio	x	0.9	1.0
Debtors’ Days	Days	6	5
Interest coverage	x	4.6	2.9
Debt to equity ratio	x	0.1	0.3
Return on assets	%	8.4	6.6
Return on equity	%	11.1	7.9
Return on capital employed	%	14.0	8.9

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

AARTI INDUSTRIES Share Price Performance

Over the last one year, AARTI INDUSTRIES share price has moved up from Rs 455.6 to Rs 698.0, registering a gain of Rs 242.4 or around 53.2%.

Overall, the S&P BSE SENSEX is up 22.5% over the year.

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